THE British Columbia Securities Commission (BCSC) announced on Tuesday that it has paid three investors $120,000 that they lost as a result of misconduct by Ayaz Dhanani.
In May 2016, a BCSC panel found that Dhanani fraudulently raised a total of $188,800 from three investors. In December 2016, the panel issued sanctions against Dhanani, including an order to pay to the commission the $188,800 he obtained as a result of his misconduct. In February 2017, the BCSC received $120,000 as partial satisfaction of the order.
Under the Securities Act, the BCSC must make money that it receives under a section 161(1)(g) order available to investors. Four claimants submitted their claims to the BCSC, and the BCSC has ordered payments of the full $120,000 on a prorated basis to three of the claimants.
DHANANI (a.k.a. Alex Dhanani, Azim Virani, Michael Lee, Alex Nebris, Paul Dhanani, Samuel Ramos and Rahim Jiwa), 37, of Vancouver was arrested on October 2 following an investigation by the Criminal Investigations Branch of the BCSC.
He was arrested for multiple charges under the Criminal Code and the Securities Act. It was alleged that, contrary to the Criminal Code, Dhanani:
- committed fraud and theft in excess of $5,000, and
- failed to comply with a term of his release on other outstanding prosecutions resulting from prior investigations by the BCSC and other investigative agencies.
It was also alleged that, contrary to the Securities Act, Dhanani:
- traded in securities in breach of a BCSC order issued December 16, 2016,
- distributed securities without a prospectus,
- gave undertakings related to the future value or price of a security,
- made misrepresentations, and
- acted as an advisor without being registered.
The BCSC issued the December 16, 2016 order after it found Dhanani defrauded three B.C. investors of $188,800. The BCSC issued several permanent prohibitions against Dhanani, including prohibitions from purchasing and trading in any securities, from engaging in investor relations activities, or from becoming or acting as a director or officer of any issuer or registrant.
The BCSC also ordered Dhanani to pay $188,800 in disgorgement and an administrative penalty of $225,000.