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Cullen Commission won’t be reopened to hear about penny stock scams

Probe into money laundering won’t return to look into related to alleged pump-and-dump stock fraud schemes, B.C.’s attorney general says.
B.C. Attorney General David Eby | Dan Toulgoet/file photo

The Cullen Commission on Money Laundering in B.C. won’t return to look at dirty money in capital markets, according to the attorney general.

Since last summer, U.S. authorities have charged several British Columbians in criminal and civil matters related to alleged pump-and-dump stock fraud schemes. The biggest names include Panama Papers-exposed lawyer Frederick Sharp, stock promoter David Sidoo and Hells Angel Courtney Vasseur.

During an appearance in Surrey at the opening of a social housing project near B.C. RCMP headquarters, Attorney General David Eby did not comment on the Securities and Exchange Commission and Federal Bureau of Investigation operations targeting B.C. residents. 

“The [Cullen] commission has concluded the evidentiary stage and I understand Commissioner Cullen and his team are working hard to pull together the report for June,” Eby said. “We’ve not had a request from the Commission to expand hearings to include additional evidence related to capital market fraud. And frankly, I don't anticipate one.”

Last November, the BC NDP cabinet extended the commission’s final report deadline to May 20. Eby said later that he should have said “by June.”

The commission was struck in May 2019 by the cabinet to hear evidence and make findings about money laundering in gambling, real estate, financial institutions and money service, luxury goods, professional services and the use of shell companies, trusts, securities and financial instruments.

In the interim report in December 2020, Justice Austin Cullen said the commission would examine money laundering in capital markets.

“While securities dealers are reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, an April 2013 report from the securities sector shows that these dealers filed only 20 large cash transaction reports and 1,235 suspicious transaction reports between 2007 and 2011, and that only 14% of those reports came from British Columbia,” Cullen wrote. “Moreover, it appears there are few provincial efforts to combat money laundering in the capital markets.”

The commission heard testimony from 198 witnesses over 138 days. Closing submissions from participants’ lawyers concluded last Oct. 19. The commission focused most of its attention on money laundering related to casinos. Organizations that regulate lawyers, accountants and notaries public participated. Lawyers for the BC Securities Commission and Investment Industry Regulatory Organization of Canada did not participate.

“It's quite possible that the findings of the Commission may have implications for other types of activity without commenting on the specific allegations, and we'll see when the report comes out,” Eby said. “[I’m] not familiar with the specific set of allegations you're talking about, but even if I were, I'd be very reluctant to comment on them.”