Concrete Equities and Wealthstreet Alberta Securities Commission Documents

I’ve had these documents for several years and had been meaning to put them up for public access – all text below is taken verbatim from the documents in question.

Alberta Securities Commission: Notice of Hearing (Oct 2010) [Download PDF]
To: Wealthstreet Inc, Colin Davis Jones (aka David Colin Jones, aka Dave Jones), Rachael Poffenroth
Allegations & Summary of Breaches:

  1. “Staff (Staff) of the Alberta Securities Commission (Commission) alleges that Wealthstreet Inc. (Wealthstreet), Colin David Jones also known as David Colin Jones (Jones) and Rachael Poffenroth (Poffenroth) (collectively, the Respondents) engaged in illegal trading and distributions of securities in Alberta to Alberta investors.”
  2. “Staff also alleges that Jones acted as an advisor in Alberta without being registered as an advisor, made prohibited and misleading or untrue representations to Alberta investors and engaged in unfair practices in transactions with Alberta investors.”

Alberta Securities Commission: Amended Notice of Hearing (Oct 2010) [Download PDF]
To: VARUN VINNY AURORA, DAVID HUMENIUK, DAVID JONES, VINCENZO DE PALMA
Allegations & Summary of Breaches:

  1. “Staff of the Commission (Staff) allege that Varun Vinny Aurora (Aurora), David Humeniuk (Humeniuk), David Jones (Jones) and Vincenzo De Palma (De Palma) breached the Act by acting as dealers without being registered in accordance with Alberta securities laws, and without an applicable exemption to the registration requirement, or by authorizing, permitting or acquiescing in such conduct by one or more corporate entities of which they were a director or officer.”
  2. “Staff allege that Aurora, Humeniuk and Jones breached the Act by making, or by authorizing, permitting or acquiescing in the making of, statements each knew, or ought reasonably to have known, were misleading or untrue in a material respect, or that did not state a fact that was required to be stated or that was necessary to make the statement not misleading, and that would reasonably have been expected to have a significant effect on the market price or value of the security in question.”
  3. “Staff allege that Aurora, Humeniuk, Jones and De Palma each breached the Act by trading in securities on his own account, or authorized, permitted or acquiesced in the trade of securities on one or more companies’ own account, in circumstances where such
    trades were distributions, without having filed a prospectus or preliminary prospectus for which a receipt had been issued by the Executive Director of the Commission (the Executive Director), and for which no valid exemption applied.”
  4. “Staff allege that Aurora, Humeniuk, Jones and De Palma each acted contrary to the public interest.”

Alberta Securities Commission: Notice of Decision (Dec 2011) [Download PDF]
To: Wealthstreet Inc, Colin Davis Jones (aka David Colin Jones, aka Dave Jones), Rachael Poffenroth
Recognition of Seriousness:

  1. “Jones, in our view, still does not recognize the seriousness of his misconduct. Communications to investors that are in evidence and his statements before us (on the few occasions that we saw or heard from him) demonstrate Jones’s persistence in contending that any issues with the Promissory Notes and the other securities sold through Wealthstreet were caused by global economic conditions and not his actions. He continues to accept no blame or responsibility for his illegal actions. When cross-examining investor witness KC, he implied that she was in a more balanced position with her current investments (through Wealthstreet) than she had been before meeting Jones. In fact, KC had gone from having retirement savings of over $200 000 and real estate equity of several hundred thousand dollars to apparently losing all of her savings and owing $540 000 on home equity lines of credit. In addition to not accepting responsibility for the financial harm he caused his clients, Jones seems unwilling or unable to appreciate the fact that his actions contravened Alberta securities laws and were contrary to the public interest.”
  2. “We believe that Poffenroth recognizes the seriousness of her misconduct and sincerely regrets both her involvement in Wealthstreet and the harm caused to Wealthstreet investors. She candidly admitted that she was not qualified to act as Wealthstreet’s president. She also testified during the Merits Hearing that she experienced “shock and hurt” at learning some of what Jones had done and how the investors had been affected. She appeared to accept the majority of the sanctions suggested by Staff as appropriate and expressed her intention not to be involved with public companies in the future. However, the evidence also indicates that Poffenroth had concerns about being under-qualified and being upset over some of Jones’s activities while still employed at Wealthstreet. Despite her concerns and reservations, Poffenroth continued for a time to act as Wealthstreet’s president and collect her generous remuneration. She later filed a claim with the Trustee for money owing to her from her wrongful dismissal claim. At no time did she report Jones or Wealthstreet to any regulators. We conclude that while some of her remorse and recognition of seriousness is genuine, some of that contrition stems from her desire to minimize the sanctions she might receive.”

Concrete Equities PDF Documents

Clearing out some old Evernote folders, I wanted to publish these Concrete Equities-related documents for search engines to index.

SEARCHABLE-PDF-Dave Humeniuk Statement of Defence Aug 28

PDF-Dave Humeniuk Statement of Defence Aug 28

SEARCHABLE-PDF-Aug 21 Statement of Claim and Affidavit

PDF-Aug 21 Statement of Claim and Affidavit

Letter to El Golfo Investor, dated November 2, 2010

E & Y Feb 16, 2011 Letter to Mexico Investors

Basi Affidavit v5 (Filed May 26, 2010)

Alberta Securities Commission Notice of Hearing for Dave Jones, Rachael Poffenroth, Varun “Vinny” Aurora, David Humeniuk, and Vincenzo De Palma

I haven’t published anything lately about Concrete Equities or Wealthstreet, but things are continuing to evolve with those companies and the people who ran them. Late last year, a notice of hearing (or possibly two?) was held for Dave Jones (A.K.A. Colin David Jones), Rachael Poffenroth, Varun “Vinny” Aurora, David (Dave) Humeniuk, and Vincenzo De Palma. When we were clients of Wealthstreet, Ms. Poffenroth was the president of the company.

To any lawyer reading this: no statement made in this post can be considered libel; I am simply re-publishing publicly available information. I make no allegations myself, and all data provided is from public sources.

The two PDF documents below have the details, but allow me to quote two sections from the second PDF:

Allegations: Summary of Breaches (Page 3)

“1. Staff of the Commission (Staff) allege that Varun Vinny Aurora (Aurora), David Humeniuk (Humeniuk), David Jones (Jones) and Vincenzo De Palma (De Palma) breached the Act by acting as dealers without being registered in accordance with Alberta securities laws, and without an applicable exemption to the registration requirement, or by authorizing, permitting or acquiescing in such conduct by one or more corporate entities of which they were a director or officer.

2. Staff allege that Aurora, Humeniuk and Jones breached the Act by making, or by authorizing, permitting or acquiescing in the making of, statements each knew, or ought reasonably to have known, were misleading or untrue in a material respect, or that did not state a fact that was required to be stated or that was necessary to make the statement not misleading, and that would reasonably have been expected to have a significant effect on the market price or value of the security in question.

3. Staff allege that Aurora, Humeniuk, Jones and De Palma each breached the Act by trading in securities on his own account, or authorized, permitted or acquiesced in the trade of securities on one or more companies’ own account, in circumstances where such trades were distributions, without having filed a prospectus or preliminary prospectus for which a receipt had been issued by the Executive Director of the Commission (the Executive Director), and for which no valid exemption applied.

4. Staff allege that Aurora, Humeniuk, Jones and De Palma each acted contrary to the public interest.”

The Impact of the Respondents’ Actions (Page 10)

“76. The Offending Partnerships and CE Fund collectively raised approximately $110,000,000, with $96,735,000 raised using the impugned Offering Memoranda referred to above. In total the Concrete Group raised over $118,000,000 through the issuance of securities to 3,723 investors.

77. On May 26, 2009 Partnerships 1 through 5 sought and obtained protection from their creditors through the filing of a Notice of Intention to Make a Proposal under section 50.4(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended. On June 9, 2009 Ernst & Young Inc. was appointed as Interim Receiver of Partnerships 1-5.

78. On July 29, 2009 Concrete, the Offending Partnerships and each of their general partners were made subject to a Receivership Order (the Receivership Order). Ernst & Young Inc. was appointed Receiver for each entity.

79. Prior to the Receivership Order, the shareholders of the Concrete Group received distributions of slightly under $5,000,000. This represents a payment of only roughly 4% of their investment principal.

80. In contrast, prior to the Receivership Order, Concrete was paid over $15,000,000 in commissions as a result of the various Concrete Agreements. However, under the terms of those Concrete Agreements, Concrete was only entitled to commission payments of $10,107,750. Concrete was overpaid approximately $4.9 million.

81. In addition to the commission payments to Concrete, Aurora, De Palma, Humeniuk and Jones were also collectively paid over $8.0 million as directors of the various Concrete Group entities.

82. In its Third Report of the Receiver, dated December 2, 2009, Ernst & Young Inc, as Receiver, concluded that “based on the information presented in this report it is clear that the directors of Concrete mismanaged the affairs on Concrete in material respects.”

83. It is uncertain what recovery, if any, will be made by the 3,723 investors in the Concrete Group of their collective $118,000,000 investment, and significant further recovery of their investments is questionable.”

The two PDFs are below and can be downloaded, printed, or shared. Continue reading Alberta Securities Commission Notice of Hearing for Dave Jones, Rachael Poffenroth, Varun “Vinny” Aurora, David Humeniuk, and Vincenzo De Palma

Alberta Securities Commission Notice of Hearing for Varun “Vinny” Aurora, David Humeniuk, and Dave Jones

Wondering what happened to Varun “Vinny” Aurora, David Humeniuk, and Dave Jones? The Alberta Securities Commission has something to say. I quote:

“The Alberta Securities Commission (ASC) has issued a Notice of Hearing alleging Calgary residents Varun Vinny Aurora, David Humeniuk and David Jones breached Alberta securities laws by acting as dealers without being properly registered, making serious omissions and misrepresentations to investors and distributing various Concrete Equities Group entities’ securities using offering documents not in compliance with Alberta securities laws.

In the Notice of Hearing, ASC staff allege that Aurora, Humeniuk and Jones, as directors and officers of Concrete Equities and multiple related companies and limited partnerships, made several serious omissions and misrepresentations by failing to fully disclose material, non-arms length contracts connected to the securities being sold and failing to disclose Humeniuk’s lifetime withdrawal from the Real Estate Council of Alberta to investors.”

The appeatence to set a date for the hearing will be held on October 13th, 2010, at 1 p.m. in the ASC Hearing Room on the 6th Floor, 300 – 5th Avenue S.W., Calgary, Alberta. I’m pondering going myself – I wonder if it’s open to the public? The full notice of hearing document can be found on the ASC Web site, but I’ve also mirrored a copy of it here. Continue reading Alberta Securities Commission Notice of Hearing for Varun “Vinny” Aurora, David Humeniuk, and Dave Jones

David Humeniuk’s Teluric International Investments Ltd.

Look what I found on the Alberta Securities Commission Web site:

“Calgary-based Teluric International Investments Ltd., the Teluric Diversified Fund, David Humeniuk and Elizabeth Humeniuk have provided an Undertaking to the Executive Director of the Alberta Securities Commission (ASC).  The Undertaking comes after ASC staff identified that the parties failed to disclose in a Teluric Diversified Fund offering memorandum information required by Alberta securities laws.  No sales occurred pursuant to the offering memorandum, nor are any sales contemplated in the future. The Undertaking states that Teluric International Investments, the Teluric Diversified Fund, David and Elizabeth Humeniuk agree they will cease all trading and refrain from any further trading of Teluric Diversified Fund securities until such time as the Executive Director releases them from this Undertaking.”

Who’s Dave Humeniuk you might be wondering? Why, he was a Director at Concrete Equities of course! Some truly interesting things have been said about the Santa Clara Mexico investment in court documents involving Dave Humeniuk and Vincenzo De Palma (sort of a “he said, he said” thing), and I’m planning on publishing those in the next week or two. Court documents aren’t libel because they fall under Absolute Privilege. Any lawyer reading this knows that. The document relating to the above ASC action can be found here – in short, it says that Dave Humeniuk needed to “Disclose any penalty or sanction (including the reason for it and whether it is currently in effect) that has been in effect during the last 10 years against (i) a director, executive officer or control person of the issuer, or (ii) an issuer of which a person referred to in (i) above was a director, executive officer or control person at the time.”

It seems he didn’t do that, and that’s against the rules.