lying to investors leads to lifetime ban from asc for fraud perpetrator
funds raised to purchase medical business were redirected for unrelated purposes, alberta securities commission finds
2 minute read
the alberta securities commision logo is seen in this file image.
grant black/postmedia file
the alberta securities commission has slapped a lifetime ban on a businessman who bilked investors in a scam worth more than $150,000. between july 1, 2018, and dec. 31, 2020, paul lackan raised more than $153,500 from eight investors, telling them the funds would be used to buy or invest in a company called act medical centres. some of the investors were clients of lackan’s bookkeeping business.
“however, lackan perpetrated a fraud on those investors by instead spending at least $115,378 of the $153,500 for his own purposes, not for the purchase or attempted purchase of act,” the asc wrote in a decision rendered on dec. 2 and published friday.
“the investors did not receive their principal back or any return on their investments,” the commission noted in a separate written statement.
lackan offered non-credible excuses or avoided providing answers when investors questioned him about the invested funds or sought the money’s return, the commission found. the asc also raised doubts over lackan’s explanations shared with it over the course of its investigation.
“lackan never intended to use investors’ money for act. he knew he was going to spend much of their money for his own purposes, unconnected to act,” the asc decision read. “he did not tell investors his true intentions, including that he considered their money to be his salary — convincing them instead that he would use their money to acquire or invest in act.”
advertisement
lackan informed investors they would receive certificates for act shares but this didn’t happen, handing them falsified certificates instead, the asc also found.
“he deliberately and knowingly purported to sell act shares to investors, lied to them, and put their pecuniary interests at risk,” the commission wrote in its decision against lackan. “it was evident that the investors’ $153,500 was gone, with at least $115,378 spent by lackan for purposes he did not disclose to the investors.”
lackan didn’t testify at a hearing and had minimal participation in the proceedings as a whole, the commission said, but it deemed his treatment to be fair.
in addition to a lifetime ban on market access, lackan was fined $60,000, ordered to pay back $175,378 to investors, and billed $47,009 to cover the costs of the asc investigation.
he was also forced “to resign from all positions he may have as a director or officer of any issuer,” the commission said.
share story
