B.C. Investment Regulator Uncovers Major Pump-and-Dump Stock Fraud Scheme
British Columbia's investment markets regulator has made a significant finding against a Vancouver-based company and four businessmen from the province, determining they committed a sophisticated pump-and-dump stock fraud operation. The B.C. Securities Commission panel concluded that Core Capital Partners Inc. and the individuals involved violated securities laws by artificially manipulating stock prices.
Details of the Securities Violation
A B.C. Securities Commission panel determined that Core Capital Partners Inc., along with Kamaldeep Thindal of Langley, his brother Amandeep Thindal of Surrey, Yazan Al Homsi of Vancouver, and Aarun Kumar of Vancouver, directly or indirectly participated in actions they knew or should have known would create false impressions of trading activity or artificially affect share prices. The panel further found that the Thindal brothers and Al Homsi approved or allowed Core Capital's misconduct, constituting additional violations of the Securities Act.
Understanding Pump-and-Dump Schemes
In pump-and-dump fraud operations, stocks are artificially hyped through various means to raise their market price, after which the perpetrators sell their holdings to unsuspecting investors who believe they're buying into legitimate opportunities. These schemes typically target so-called penny stocks, which are priced at under $5 per share and often traded on smaller exchanges with less regulatory scrutiny.
In their comprehensive 134-page written findings, the three-member securities commission panel emphasized that pump-and-dump schemes represent particularly insidious threats to British Columbia's investment markets. "While efficient markets are premised on transparency and accurate timely disclosure by stock issuers, a pump-and-dump scheme is exactly the opposite: inaccurate or artificial impressions are created by unknown parties to inflate share prices," wrote the panel. "These adverse effects impact the market in real time, and unwitting investors gain knowledge of the ruse only after the fact."
Company Background and Financial Impact
The securities commission noted that Core Capital Partners Inc. described itself as providing merchant banking services to emerging companies and claimed to have raised, invested, and co-invested $540 million since 2005. Despite these professional claims, the panel found the company engaged in fraudulent market manipulation.
According to the findings, shares were sold for a profit of $46 million during the alleged scheme, though the exact calculation of illicit gains has not been finalized. The panel dismissed some allegations involving one stock and against certain participants, but the core findings of securities violations remain substantiated.
Timeline and Targeted Companies
The investigation revealed that between 2017 and 2019, the pump-and-dump scheme artificially inflated the share prices of two specific companies:
- Block One Capital Inc. (formerly Essex Angel Capital Inc., now known as AI Artificial Intelligence Ventures Inc.)
- Integrated Cannabis Company Inc. (formerly known as CNRP Mining Inc., now known as Leef Brands Inc.)
The panel determined that Kamaldeep Thindal, serving as managing partner and sole director of Core Capital, along with his brother Amandeep (the company's CFO), and Al Homsi (formerly Core Capital's vice-president of investments), knowingly engaged in conduct that resulted in artificial pricing of Block One and Integrated/CNRP stocks.
Next Steps in Regulatory Process
The calculation of precise illicit profits will occur during the next phase of proceedings, when a separate securities commission panel will determine appropriate sanctions. These may include substantial monetary penalties, with the panel scheduled to hear from all involved parties before making final determinations about consequences for the securities violations.
This case highlights ongoing regulatory efforts in British Columbia to maintain market integrity and protect investors from sophisticated financial fraud schemes that undermine confidence in provincial investment markets.
