BCSC discovered illegal distribution and unregistered trading of firm’s shares
The former director and CEO of a financial technology firm has been banned from the investment market for 10 years and fined $40,000 by the British Columbia Securities Commission.
Qian (aka Eve) Zhang’s firm represented itself as a developer of software for portfolio managers and raised approximately $1.5 million from 10 investors between 2018 and 2022. However, the securities were sold without a prospectus, contrary to the requirements of securities legislation. Zhang, as CEO and a director, authorized, permitted or acquiesced in those illegal distributions.
Further investments of almost $30 million were raised between 2017 and 2022 by the company distributing its own preferred shares, common shares and bonds. The funds raised were mostly deposited in the company’s trading accounts and used to trade securities, although the firm was not registered to perform this activity. Zhang authorized, permitted or acquiesced in this unregistered trading.
The BCSC says that Zhang expressed remorse for the wrongdoing and has no history of securities misconduct.
As part of her settlement agreement with the BCSC, Zhang must resign from any position as a director or officer of an issuer or registrant, and is prohibited for 10 years from:
- trading in or purchasing securities or exchange contracts (with some limited exceptions)
- becoming or acting as a director or officer of any issuer or registrant
- becoming or acting as a registrant or promoter
- advising or acting in a management or consultative capacity in connection with activities in the securities market, and
- engaging in promotional activities.
BCSC says that Zhang displayed exemplary cooperation with the investigation and has agreed to continue cooperating.
