A group of individuals and firms known collectively as the BridgeMark Group has been temporarily banned from buying securities from 11 CSE-traded companies this week by the British Columbia Securities Commission (BCSC).
The temporary ban resulted from an ongoing investigation into an alleged scheme to abuse the market for personal gain.
According to a statement from the BCSC Executive Director, the group of consultants purchased millions in shares from the 11 companies but were then directly reimbursed by those same companies.
After being paid back for the shares, the consultants allegedly then sold the shares well below their actual value.
At the core of the complaint is that the transactions may have been illegal, since the involved parties bypassed the need to file a prospectus by using the consultant exemption.
The BCSC commented: “The Executive Director is concerned that the BridgeMark Group’s members are not consultants, that they provided little or no consulting services to the issuing companies, and engaged in the scheme for their own profit.”
The 11 stock issuers named in the complaint feature companies in the alternative energy, mining, cryptocurrency, and cannabis markets, including Cryptobloc Technologies Corp. (CSE: CRYP) and Liht Cannabis Corp. (CSE: LIHT).
Until last month, Liht was previously known as Marapharm Industries. The company changed names to Liht Cannabis Corp in late October in the wake of an upper management shakeup.
In conjunction with the name change, Liht appointed new CEO Rahim Mohamed and COO Linda Sampson.
Liht today released a press release about the allegations from the BCSC, issuing these comments to shareholders:
“The company had engaged consulting services which were to be provided by certain members of ‘The BridgeMark Group’ listed in the BCSC news release. Prior to the announcement, the company had undertaken its own internal investigation and fact-finding, to reconcile the contracts and services rendered to the company.“
The statement further added: “The company’s internal investigation has not yet been completed. The company welcomes the BCSC’s examination of these matters, we will attend the hearing on December 7, 2018 and cooperate with their investigation.”
That hearing scheduled for early December will determine whether the temporary ban is to be extended for additional time while the investigation continues.