A panel of the British Columbia Securities Commission (BCSC) found that Toronto law firm partner Shimshon Refoel Posen violated British Columbia’s Securities Act by directing a wash trade to artificially lower Waraba Gold Limited’s share price. Posen knew, or reasonably should have known, that his actions would contribute to a misleading appearance of trading activity and an artificial price. In January 2024, Waraba planned to sell 10 million shares through a private placement at CAD 0.03 per share. Canadian Securities Exchange rules require private placements priced below CAD 0.05 per share to be priced no lower than the company’s volume-weighted adjusted price (VWAP) over the preceding 20 trading days. Waraba’s VWAP at the time was CAD 0.078. Posen placed an order to buy 50,000 shares at CAD 0.005 each through his own account and directed a matching sale from an account belonging to his wife’s holding company, over which he had trading authority. A few days later, his law firm informed the exchange that Waraba’s VWAP had fallen below CAD 0.03. The panel directed Posen and the BCSC’s executive director to make submissions on sanctions.
British Columbia Securities Commission finds lawyer directed wash trade to artificially lower client’s share price
A British Columbia Securities Commission panel found that Toronto lawyer Shimshon Refoel Posen breached securities law by directing a wash trade to depress Waraba Gold Limited’s share price. The transaction sought to lower the pricing benchmark governing a planned private placement at CAD 0.03 per share. The panel requested submissions on sanctions.