A Vancouver-based health sciences company and its CEO has been cleared of allegations it made misrepresentations when it raised $6.5 million but didn’t disclose that it already paid or committed to pay approximately $3.2 million to consultants.
At the root of the administrative allegations was how the consultants bought into private placements while simultaneously being paid for consulting contracts while performing little or no work. The alleged scheme involved $52 million of share purchases. Three firms — Beleave Inc., New Point Exploration Corp. and Speakeasy Cannabis Corp. — admitted to such violations, while BLOK Technologies Inc. was found by a panel to have made such misrepresentations.The finding in favour of PreveCeutical is the only one of the seven, to date, to dismiss the allegations, including omitting information and filing misleading or false materials to the commission.
“The panel determined that ‘although the Executive Director has come close…it has not been established according to the required standard of proof that reasonable investors would have changed their behaviour, or expected other investors to change their behaviour, in a manner which would have had a significant effect on the market price of PreveCeutical’s shares.’”