A British Columbia Securities Commission (BCSC) panel has issued orders under section 161(1)(g) of the Securities Act, commonly referred to as disgorgement orders, against three individuals.
(Disgorgement is defined by Black’s Law Dictionary as “the act of giving up something (such as profits illegally obtained) on demand or by legal compulsion.”)
In August 2014, the panel found that between September 2007 and March 2009, Thalbinder Singh Poonian, Shailu Sharon Poonian, Robert Joseph Leyk, Manjit Singh Sihota and Perminder Sihota engaged in a market manipulation.
In March 2015, the panel ordered permanent market bans against all five respondents and ordered that they pay $7,332,936 in disgorgement to the BCSC, jointly and severally, in addition to various administrative penalties.
The Poonians and the Sihotas were granted leave to appeal the disgorgement order. Leyk did not seek leave to appeal. The B.C. Court of Appeal confirmed that the net aggregate trading gains resulting from the market manipulation amounted to $7,332,936. However, the Court of Appeal set aside the disgorgement orders against the Poonians and Sihotas and sent the matter back to the BCSC to determine what proportion of the $7,332,936 was directly or indirectly obtained by each person.
Following the Court of Appeal’s instructions, the panel found that each respondent directly obtained the net trading gains in his or her brokerage account. In particular, Shailu Sharon Poonian directly obtained $3,149,935, Thalbinder Singh Poonian directly obtained $746,676, and Perminder Sihota directly obtained $1,126,260.
The panel also found that Thalbinder Singh Poonian indirectly obtained amounts from the brokerage accounts that he controlled in the names of nominees. The panel found that he indirectly obtained $572,491 from the accounts of secondary participants in the manipulation and $1,126,260 from Perminder Sihota’s accounts.
Considering the amount each respondent directly and indirectly obtained, the panel made the following disgorgement orders against the respondents:
- Shailu Sharon Poonian pay to the BCSC $3,149,935;
- Thalbinder Singh Poonian pay to the BCSC $1,319,167; and
- Thalbinder Singh Poonian and Perminder Sihota pay to the BCSC $1,126,260 on a joint and several basis.
The panel did not make any disgorgement orders against Manjit Singh Sihota.