West Vancouver resident and chartered professional accountant Anthony Kevin Jackson has reached a settlement with the B.C. Securities Commission, more than five years after he and dozens of purported consultants were issued a hearing notice for alleged misconduct in the capital markets.
Jackson and his firms BridgeMark Financial Corp. and Jackson & Company Professional Corp. are to pay the commission $100,000 total after admitting to participating in “a scheme that was abusive to the capital market,” the commission stated in a news release Monday.
Under the settlement’s “agreed statement of facts,” Jackson and his companies were also issued various, limited market participation prohibitions after admitting to participating in the scheme involving penny stock companies listed on the Canadian Securities Exchange that entered into $43 million worth of consulting agreements in 2018.
The consultants “performed little or no consulting work” while also using consultant exemptions to collectively buy $50.9 million of newly issued free-trading shares from the public companies, which only kept $7.9 million, the commission explained.
Subsequently, “the consultants, in most instances, sold their shares after purchasing them, at prices that were generally below the private placement price,” the commission noted.
The commission’s executive director Peter Brady had previously alleged Jackson to be one of two “primary architects” of the “cash-swap scheme,” which was first disclosed in a November 2018 commission hearing notice against over three dozen “purported consultants” and corporate entities Brady dubbed the "Bridgemark Group" — the largest group of respondents in the commission’s history.
In the original hearing notice from 2018, the commission outlined a portion of trades and contracts that allegedly showed consultants paid four companies $17.9 million for shares, which they re-sold for $8.8 million while receiving $15.3 million returned by the companies as consulting fees. And so, their profit was $6.2 million on roughly one-third of the total transactions of the alleged scheme.
“BridgeMark purchased $2 million worth of units in a private placement by one [public company], and sold the shares before or shortly after receiving them. Jackson’s companies also received $3.4 million in consulting fees,” the settlement states.
The settlement does not indicate how much Jackson may have profited from the transactions.
The other alleged “primary architect” was Justin Liu, who agreed last month to pay $950,000 to the commission, which also did not disclose how much profit may have been earned.
Several public companies have since admitted to misrepresenting their sales of shares, as they never disclosed to the public that most of the funds were returned as pre-paid consulting fees. And at least three stockbrokers have been fined and sanctioned for facilitating trades with those companies.
The settlement also makes no mention of insider trading allegations levied against Jackson from a 2021 amended hearing notice that removed most of the respondents.
The settlement explains some of Jackson’s actions during the time in question.
“Jackson met with some of the issuers to explain the consultant exemption that the issuers relied on to make the private placement shares freely tradable, and he facilitated the delivery of paperwork, including subscription agreements, consulting contracts and private placement cheques for some of the issuers,” the commission stated in its news release.
In addition to the $100,000 fine, Jackson faces various time-limited participation bans in the investment market.
For the next eight years, Jackson is prohibited from “becoming or acting as a director or officer of an issuer or registrant other than an issuer in which he owns all of the issued and outstanding shares.”
For the next five years, Jackson is prohibited from “advising or otherwise acting in a management or consultative capacity in connection with activities in the securities or derivatives markets” and “engaging in promotional activities by or on behalf of any reporting issuer, security holder of a reporting issuer or party to a derivative or another person that is reasonably expected to benefit from the promotional activity in respect of a reporting issuer.”
The commission made some exceptions for Jackson, however: “Jackson may advise or otherwise act in a consultative capacity for non-reporting issuers (i) in the area of accounting and (ii) in the areas of takeover bids, issuer bids, reverse takeovers, amalgamations, mergers, arrangements, reorganizations, share exchanges, business combinations or other similar transactions, and may engage in promotional activities incidental to his consulting in those areas. For the final three years of these prohibitions, the exceptions set out in (i) and (ii) will also apply to reporting issuers.”
And, for two years Jackson is prohibited from “becoming or acting as a registrant or promoter.”
Jackson’s companies face similar prohibitions.
It was noted by Brady that Jackson and his companies “made the admissions set out in this agreement prior to the commencement of the hearing of this matter” and “they have no prior securities disciplinary history.”
A hearing for Jackson was scheduled to commence last month with dates extending to April 2025, following years of delays, including constitutional legal challenges.
Jackson had also challenged freeze orders placed by the commission against his assets, including the waterfront home he purchased in November 2018 for $15.9 million.
