June 18

Exempt dealer disputes disclosure deficiencies

Feds launch council on sustainable finance James Langton deficiencies by the British Columbia Securities Commission (BCSC) last week says that it believes its disclosure was compliant, and indicates that it intends to resolve the regulator’s allegations “expeditiously”. Last week, the BCSC published a notice of hearing alleging that League Investment Services Inc. promoted the securities of a real estate investment trust (REIT) without properly disclosing its connection to the REIT. The allegations have not been proven, and the BCSC is to apply to set a hearing date in the case on September 17. (See Investment Executive, BCSC alleges exempt dealer sold REIT securities without proper disclosure, Aug. 14, 2013.) In response to the allegations, the firm indicates that, “League Investments is fully committed to complying with applicable securities laws and dedicates significant resources to doing so.” It also says that it “will work with the BCSC in a co-operative manner to expeditiously resolve the allegations presented within the notice of hearing.” The BCSC specifically alleges that the firm failed to properly disclose that its owners and sole directors, Adam Gant and Emanuel Arruda, are also both trustees of a REIT that it sells (IGW REIT), and that they also control the REIT’s management company, League Assets Corp. The regulator maintains that the firm made recommendations through its website, brochures, and Blue Book without disclosing in those documents that it was a “connected issuer” of IGW REIT. Commenting on those allegations, the firm says it believes that its disclosure was proper. It notes that it is “committed to ensuring that its clients receive clear and transparent disclosure, including information concerning the relationship between different League entities.” And, it says that disclosure of the fact that both League Investments and League Assets are connected issuers of IGW REIT “appeared during the relevant period and continues to appear currently” on the cover page of the REIT’s offering memorandum, and in its subscription agreement, which is signed by each investor. Regarding the alleged absence of similar disclosure by League Investments, the dealer says that it does not believe these materials contained a ‘recommendation’ to buy, sell, or hold securities of the REIT. “As a result, League Investments believes that these mediums complied with applicable securities laws,” it says CSA releases guidance on crypto disclosure Facebook LinkedIn Twitter SCC greenlights class action against fund dealer, manager Keywords Disclosure,  REITs,  Exempt marketCompanies British Columbia Securities Commission Share this article and your comments with peers on social media Related news read more