An Alberta Securities Commission (ASC) panel has found that David Jones, sole director and shareholder of Wealthstreet Inc., breached Alberta securities laws by acting as an advisor without being registered and engaging in an unfair practice by unreasonably pressuring at least one investor to purchase securities through Wealthstreet. The panel also ruled that Jones, Wealthstreet and former Wealthstreet president Rachael Poffenroth illegally traded in and distributed securities of Wealthstreet, and that all the conduct was contrary to the public interest.
During an ASC hearing, the panel heard evidence that Jones attracted a number of investors through exposure to his radio and TV promotional segments and that “Jones well knew that Wealthstreet clients and potential clients placed a considerable degree of trust and confidence in him, again fostered by advertising campaigns.” The panel found that Jones’s “advice has turned out to be disastrous” and that “several of Jones's clients now find themselves in financial hardship, caused by the highly questionable investment strategy recommended by Jones – leveraged investing in high-risk, illiquid securities.”
In its decision, the ASC panel also concluded that Jones engaged in an unfair practice and his conduct was unconscionable. The panel stated that “Jones used scare tactics and falsehoods to unduly pressure at least one Alberta investor (a senior citizen) to purchase securities using excessive leveraging; as a result, she may now lose her home – her main asset – which had previously been mortgage-free.”
The decision on merits having been made, the ASC panel set out a timetable for submissions on appropriate sanctions.
The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted to foster a fair and efficient capital market in Alberta and to protect investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
For further information please contact:
For Media Inquiries: Mark Dickey
Senior Communications Advisor
For Investor Inquiries: ASC Public Inquiries
Toll Free 1.877.355.4488