The former directors of real estate investment firm, Concrete Equities, have been charged with breaking securities laws.
The Alberta Securities Commission says the directors lied to investors and used faulty documents to raise more than $96-million.
The wheels started coming off last spring. Investors in the commercial real estate projects sold by Concrete Equities picketed when its directors refused to step down after being voted out by investors.
Concrete then admitted to mismanaging its business in papers Concrete filed in bankruptcy court, requesting that a receiver be appointed to take over its business. That request was granted and for the last year, Ernst & Young has been unwinding Concrete's affairs.
Now the Securities Commission is weighing in .
The Commission just filed an action against former Concrete Directors Vinny Aurora, David Humeniuk and David Jones for allegedly breaking securities laws by acting as dealers without being registered to do so, making false statements to investors and failing to state facts that would impact the value of the investments they sold.
For example, the ASC says Concrete failed to disclose that in 2003, the Real Estate Council of Alberta filed an action against Humeniuk for making misrepresentations and failing to act in his clients' best interests.
In its filing, the ASC also alleges that Concrete raised $96.7 million from more than three thousand investors, with investment documents that contained mis-statements and material omissions, and that Concrete and its directors received more than $24-million in commissions and other remuneration from those investment deals.
CTV tried to contact the three former Concrete directors named in the ASC's action, but was only able to find one, Dave Jones. Jones said that he hasn't had the time to review this document with his lawyer, so couldn't comment on any specifics. But he did say that he had little control over what Concrete did since he only owned 1/3 of the company and he was continually out-voted by the other two directors.
Concrete investor Mike Hansen says its been a long, expensive year working through the receiver in bankruptcy court. But the investors have gained control of 4 of the 5 real estate projects purchased through Concrete.
He says the ASC allegations are the first time any government entity has said Concrete's directors broke the law.
Now investors hope the RCMP will consider criminal charges against Concrete's principals as well.
