Investors lost a combined $1.7 million after being duped into ‘no risk’ scheme
The British Columbia Securities Commission has fined a Vancouver woman $2.5 million and ordered almost $800K in disgorgements for operating a fraudulent investment scheme that lost investors $1.7 million.
The regulator found that Meiyun Zhang had raised funds from three investors between 2014 and 2016 by promising returns of 6-10% and “no risk” through investments that would exchange foreign currency for Chinese students and visitors to Canada, provide loans to Chinese students to obtain visas, or help them immigrate to Canada.
But rather than use the funds raised for these purposes, the BCSC found that Zhang used the money for personal expenses such as retail purchases, utility bills, and even gambling in casinos.
The BCSC panel determined that the tactics used by Zhang were “predatory” and were adapted to each victim. She persisted even when investors were reluctant to make initial investments or to continue providing funds.
Although they got some of their money back, the panel found that the large losses incurred led to deferred retirements, severe health problems, the need to sell properties, as well as depression, anxiety or suicidal thoughts.
“Zhang’s high-pressure tactics and predatory conduct demonstrate a character lacking in integrity,” the panel wrote. “Zhang showed a complete disregard for compliance with applicable laws and for markets that are honest and fair.”
The panel also concluded that Zhang must have known that her actions were putting the invested funds at risk.
Zhang was banned temporarily from participating in the investment market in 2023 but the panel determined that a permanent ban was appropriate with the exception of being allowed to trade securities or derivatives for her own account.
