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by Mike Caswell
The U.S. Securities and Exchange Commission has won judgments totalling $31.95-million against six private entities named as part of the regulator's case against Vancouver's Steve Bajic and others. (All figures are in U.S. dollars.) The SEC claimed that those entities were part of network of foreign entities that Mr. Bajic used to help others illegally sell shares in at least 45 companies. He and his associates allowed insiders to conceal large share positions, the SEC said.
The judgments were handed down on Friday, May 7, in New York. They are by default, as none of the six entities had responded to the case. In all, the judge ordered the entities to disgorge $28.8-million in gains, plus interest of $3.12-million.
While the judgments are clearly a victory for the SEC, it is less clear how much money the regulator will ultimately recover. A large portion of the money underlying Friday's orders is at RHB Securities Hong Kong Ltd., which recently ceased operations. (RHB did not explain the decision to shut down its business, only citing an "increasingly challenging" operating environment. The firm had, however, received a $6.4-million (Hong Kong) fine for failing to effectively monitor the trading activities of research analysts. The fine does not appear to have any link to the SEC case.) The SEC will also recover money from accounts in Canada, with that cash held at the Bank of Montreal and at Vancouver brokerage Haywood Securities Inc. (The SEC has not accused either entity of any wrongdoing.)
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