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