Keeping up with the Joneses
In 2018 a group of Vancouver lawyers penny stock enthusiasts joined up under The Bridge Mark group to provide unique financing options for weed and crypto companies. Their methodology was extremely controversial, spawning multiple class-action lawsuits and investigations. Ultimately they were handed out some minor penalties, but it was nothing compared to the kickbacks they got from their deals.
This story wasn’t a surprise to anyone paying attention to the sector, I mean all of this happened under on the CSE – and these were the weird and wild cannabis/crypto days.
Groups, funds, or investment banks always get some kind of consideration for facilitating a capital raise. This can be participation in the capital raise through stocks and warrants, options agreements, or potentially service agreements. And that’s where Bridge Mark applied Prato’s law and put their chips in.
One of the main reasons the folks in the Bridge Mark Group do what they do, aside from being driven by the overreaching, often life-sucking constraints of capitalism i.e. keeping up with the Joneses is – they will never really face any consequences. These people are not robbing a 711 or drinking open liquor at a city park, this is white-collar stuff that has always been cool. One of the common penalties for fraud is having a trading account frozen. That seems all well and good, the person can’t trade anymore, however, people involved in stock fraud schemes often have more than one trading account, they may have five or six, or more.
Freezing one of those accounts really isn’t going to do anything. People also skirt around this by putting their stock in a family member’s name to get around regulators in case it comes back to bite them in court, or if they don’t want their investors knowing they are dumping shares. They will still keep their sunglasses on inside the Cactus Club, and they will still hit on your girlfriend.
Companies were also not entirely in the clear with many suspected to be in on the whole thing. These same CEOs would then go to their shareholders saying ‘we just raised X amount of dollars, therefore we will now be able to execute better on A,B,C.’They were either in on it, or were at least, guilty of poor due diligence.
The regulators’ live and let live policies allowed for Bridge Mark not only to make a killing doing these controversial weed and crypto deals, but it also allowed them to continue operating publicly traded companies to this day, mostly in leadership roles like CEO. For example, Anthony Jackson is currently running Vanex Resources
But while 2018, 2019, and 2020 were basically pretty chill years for the Bridge Mark outfit, the tide began to turn earlier this year.
2021/2022 Updates
In January a pair of investors leading a class action lawsuit against Bridge Mark reached a $2.4 million CAD settlement with Beleave (OTCMKTS: BLEVF).
While the settlement, reached with the company’s insurer, does not represent all the money that investors lost in Beleave Inc. after the scheme took place, B.C. Supreme Court Madam Justice Sandra Wilkinson ruled on January 8 that it “is fair and reasonable and in the best interests of those affected by it.”
Beleave returned $7.5 million CAD through pre-paid fees to the Bridge Mark Group, even though they did not provide any services, noted a June 2019 BCSC statement.
The consultants then “immediately resold most of their shares at prices below what they had paid,” resulting in significant profits.The devalued shares then ended up in the hands of the retail investors- diluting the company’s stock.
I remember watching a Hamilton City town hall with Beleave and The Green Organic Dutchman (TGOD.T) about building greenhouses in the protected agricultural area known as the Green Belt. The CEO of Beleave claimed Beleave was a real mom-and-pop shop type of company, they even started their first grow operation in an old used car lot instead of ruining farmland by building cement bottomed greenhouses. They even did the coffee shop/tech company gentrification trick of taking a well known word Believe, and spelling it incorrectly like Beleave. They even spelled cannabis with a K!
Really cool stuff.
The BCSC announced in April that it had dropped serious allegations against dozens of purported consultants and their respective companies. Originally, several family members and spouses of the accused were once included in the case. The investigation is focusing its efforts on the kingpins behind the scheme. According to the BCSC these are: Justin Edgar Liu (Lukor Capital and Asiatic Management Consultants Ltd.), Anthony Kevin Jackson (BridgeMark Financial Corp. and Jackson and Company Professional Corp.), Cameron Robert Paddock (Rockshore Advisors Ltd.) and Robert John Lawrence (Tavistock Capital Corp.)
The commission has amended its Nov. 26, 2018, notice of hearing to include only four of these purported consultants and their six respective companies, who are now alleged to have performed insider trading and/or conducted themselves contrary to the public interest as directors.
The case is still going on, 3 years strong with no end in sight. iI July a judge in BC’s Supreme Court of British Columbia has upheld the constitutionality of asset freeze orders that the B.C. Securities Commission imposed in its case against Bridgemark. The asset freeze went outside the bounds of the Bridge Mark case and included multiple real estate deals. The assets totaled $11 million CAD in cash and securities as well as property valued at roughly $35.7 million CAD, and are now back in the hands of the Bridge Mark operators.
The BCSC’s hearing is not planned to start until November 2022, four years after the regulator first published the allegations. By that time people involved in this case may have completely different investment portfolios and have used the cash they made from the scheme to fund those ventures. The reason regulators end up chasing these people around so much is, they are all either lawyers or know enough lawyers to be in their social circle. They know the laws inside and out, and the opaque laws allow all of this to happen. The CSE has been a hotbed of this in recent years, which has lead many companies to look for other exchanges like Canada’s NEO exchange that have stricter listing guidelines.