Mortgage Lender Misled Investors, BCSC Hearings Find Out

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VANCOUVER – The British Columbia Securities Commission has concluded that the Salmon Arm man and his company have provided investors with false information and false or misleading statements.

The data obtained confirm the statements of the executive director of the commission. made in January 2020 about Donald Bergman and his All Canadian Investment Corporation.

Bergman will now face sanctions from the BCSC, which will be determined following submissions from the CEO and Bergman himself this fall.

According to decision of the commissionBergman was the only director of the All Canadian Investment Corporation, a mortgage lender that provided loans to residential and commercial property owners and developers.

Misstatements and false or misleading statements made by Bergman were included in three Offering Memoranda, which explained to investors how loans would be secured.

Between January 2014 and December 2015, ACIC raised $ 1.6 million from 56 investors through memoranda, according to BCSC.

“The proposal memoranda said that the mortgages would be registered with the appropriate land authority, and were the first or second mortgage of the property; however, ACIC did not register some of the mortgages and canceled some of the registrations, ”the BCSC said. Press release.

“In addition, some of his mortgage loans were secured by mortgages that were lower priority than indicated in the documents.”

Under the commission’s decision, Bergman defended himself against the commission’s allegations of misrepresentation by focusing on what he called the purpose of the memoranda.

He argued that the memorandums only stated that the property would be registered, but not for a period, and told the hearing committee that in some cases it would be beneficial to deregister the mortgage in the interests of a flexible approach to the borrower, in accordance with the decision.

The decision describes Bergman’s arguments as “groundless.”

“While Bergman believed that investors relied to some extent on his judgment that mortgage registrations should be canceled, rather than relying on the registrations themselves to protect investment returns, investments made on this basis would be fundamentally different from others proposed. in (proposal memoranda), “the commission wrote in its decision.

“Bergman’s reading of OM and his interpretation of investor expectations reflects his own subjective beliefs, not a fair, objective reading of the clause.”

According to BCSC, dividends paid to investors in Bergman’s company began to decline in 2015. In 2017, the Supreme Court of British Columbia appointed an observer to help ACIC liquidate its assets, and losses to preferred shareholders are estimated at between 81.9% and 96.1%.



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