BC Men Barred From Stock Trading

Two Vancouver-area men have been barred from most stock-market activities after admitting they broke securities laws in a promotion that raised nearly $27 million from about 1,400 people in eight countries.

The central figure in the case is James Nelson McCarney, an entrepreneur whose interests have included computer diagnostic systems for truck engines. He agreed to pay a $100,000 penalty in a settlement announced Friday by the British Columbia Securities Commission.

The second man is Trevor William Park, a former mutual fund salesman who helped McCarney sell unregistered loan agreements in seven Canadian provinces, the United States, Britain, Germany, the Bahamas, Belize, Costa Rica and the Turks and Caicos Islands between 1998 and 2002.

He is to pay $5,000. It would have been $75,000, the BCSC said, except that "Park does not have any reasonable prospects of being able to pay" that amount.

The deal featured unregistered loan agreements intended to finance a California venture involving satellite-linked monitoring systems for transport trucks, but some of the cash went to settle a lawsuit against McCarney and other companies in which he was involved, the commission said.

The California company never went public as planned. It is not clear what, if anything, the investors recovered.

McCarney and Park admitted that they were not registered to sell the loan agreements, did not file a prospectus (a required disclosure document) and did not tell investors about the way the money was used.

McCarney was barred for 20 years from acting as a director or officer of any public company and from dealing in securities except for a single personal investment account. Park faces similar restrictions for 12 years.

As it happens, the Saskatchewan Securities Commission almost succeeded in stopping their promotion, at least in that province. By order of the SSC, more than $1.5 million was refunded to Saskatchewan investors in 2000. But it did not end there.

Park went back to work and about 123 Saskatchewan residents reinvested $1.3 million, using out-of-province addresses on purchase documents to get around the Saskatchewan order, the BCSC said. They did so "with Park's assistance and knowledge," it said.