Canada’s BCSC accuses delisted crypto investor BLOK of misrepresentation

Rick Steves

All the abovementioned executives have all since left the firm and the BCSC’s allegations have not yet been proven as the investigation is ongoing. 

The British Columbia Securities Commission (BCSC) has accused Vancouver-based blockchain technology investment company and three of its officers of making a misrepresentation about the sales of its shares, thus violating the Securities Act as BLOK traded on the Canadian Securities Exchange.

In 2018, BLOK Technologies announced it had raised approximately $5.4 million through a private placement, but did not disclose that it had already spent or owed approximately $4.4 million on consulting fees. As a result, BLOK would only retain approximately $950,000, which is less than 18 per cent of the amount raised.

According to the regulator, Robert Earle Dawson, BLOK’s president and CEO; James Joseph Hyland, its vice-president and director; and David Malcolm Alexander, its chief financial officer, authorized, permitted or acquiesced in the company’s misrepresentation and therefore also violated the Act.

Robert Earle Dawson, aka Rob Dawson, left in January 2019 and is currently Chief Executive Officer at IOVIA, a “consumer participation company”.

All the abovementioned executives have all since left the firm and the BCSC’s allegations have not yet been proven as the investigation is ongoing.

BLOK is “a public company that invests in and develops companies in the blockchain and emerging technology sectors”, according to its own description. The firm was delisted from the CSE in October 2020.

Alleged Misconduct

In a June 8, 2018 news release, BLOK announced that it had raised a total of $5,403,384 through a private placement. BLOK stated that the net proceeds would be used for advancing the company’s current blockchain investment projects, evaluating new blockchain opportunities, and for working capital purposes.

BLOK did not disclose that it would retain only $947,321.50, or less than 18%, of the amount raised because it had already spent or owed $4,456,062.50 on consulting fees.

By announcing the total proceeds from the private placement but failing to disclose that it would retain less than 18%, BLOK made a statement to investors that it knew, or ought reasonably to have known, was a misrepresentation contrary to the Securities Act.

Read this next

Institutional FX

Binance delivers pricing and trading over MT4/5 with oneZero integration

Binance’s VIP & Institutional unit today announced a partnership with oneZero Financial Systems, a global multi-asset class software and infrastructure provider for institutional and retail brokers.

Institutional FX

BNY Mellon to leverage Baton System’s CCP network on its ECPO service

“The union of Baton’s extensive CCP connectivity with the ground-breaking functionality of BNY Mellon’s ECPO service forms a powerful offering to cleared derivatives market participants.”

Institutional FX

NYSE and Tel Aviv Stock Exchange to promote dual listings

“This major step is intended to foster collaborations between the two exchanges and to encourage the dual listing of Israeli companies in their home market and on the NYSE.”

Technology

TT’s KRM22 selected as risk technology partner of Chicago-based RCM

“Broad product coverage and effective risk analytics performance are essential to proper implementation of risk management and risk analysis.”

Industry News

DXtrade FX/ CFD Platform Integrated with Your Bourse for Turnkey Liquidity

DXtrade brokers received access to 30+ major banks and Tier 2 liquidity providers with Your Bourse.

Executive Moves

Wave hires Harumi Urata-Thompson as CFO of SEC-regulated crypto investment company

“With extensive experience leading teams across both the traditional finance and digital asset sectors, Harumi is well-equipped to provide our team with the immediate strategic insights needed to optimize our financial operations. She is a fantastic addition to our team as we continue to strengthen our position as one of the leading digital asset managers and to deliver sophisticated financial services to our clients.”

Retail FX

TRADE.com enters United States as brokerage obtains license from FINRA

“We intend to be fully operational as a brokerage house in the U.S. by the end of H1 2023 and look forward to forging long term relationships with new business partners and clients.”

Technology

Pico launches Corvil Cloud Analytics as trading industry moves into cloud

“Since Corvil Cloud Analytics is software only, this accelerates our deployments and also provides an expedited avenue for proof-of-concept use cases. It’s now easier than ever for clients to access the platform so they can see firsthand what makes Corvil an industry leader in data analytics.”

Executive Moves

Finalto recruits Antony Parsons as head of liquidity

Finalto, the financial trading division of Gopher Investments, is making a broader push into the liquidity provision space, culminating in a new appointment focused on expanding the business into new markets.

<