4 men and a company found responsible for ‘pump and dump’ scheme: B.C. securities regulator

A sign at the B.C. Securities Commission office in downtown Vancouver is seen on Dec. 28, 2024. (CTV News)

A panel of the B.C. Securities Commission has concluded that one company and four individuals associated with it engaged in a “pump and dump” scheme to artificially raise the share price of another company.

The regulator shared its findings in a 134-page ruling issued Monday and a news release shared Wednesday.

The BCSC panel found that Core Capital Partners Inc., Kamaldeep Thindal, Amandeep Thindal, Yazan Al Homsi and Aarun Kumar all “engaged in conduct that resulted in an artificial price” for a company called Block One Capital Inc. between 2017 and 2019.

Block One was formerly known as Essex Angel Capital Inc. and is now known as AI Artificial Intelligence Ventures Inc., according to the BCSC.

Kamaldeep, Amandeep and Al Homsi were all also found to have knowingly engaged in conduct that artificially inflated the price of another company, Integrated Cannabis Company Inc., the regulator found.

The BCSC said Integrated was known as CNRP Mining Inc. at the time the pump and dump scheme began. It was a mining company that traded on the Canadian Securities Exchange. Today, the company is known as Leef Brands Inc.

Kumar was not found to have engaged in the scheme with regard to Integrated, nor did he knowingly engage in the scheme regarding Block One. Rather, the panel found he “reasonably should have known” that the conduct would contribute to an artificial price, in violation of the Securities Act.

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All four men were affiliated with Core Capital during the relevant period, with Kamaldeep, Amandeep and Al Homsi found liable for the company’s misconduct because of their leadership roles within it.

Kamaldeep was listed on the company’s website as its co-founder and managing partner, and he remains the company’s sole director, according to the ruling. Amandeep, Kamaldeep’s brother, was listed as the company’s chief financial officer, while Al Homsi was listed as “vice president, investments.”

Kumar was not an employee of Core Capital, but was the “dealing representative” for trading accounts belonging to the Thindal brothers and Al Homsi, as well as two other individuals—Pardeep Luddu and Mani Chopra—who were accused of market manipulation but cleared of wrongdoing by the panel.

The panel also dismissed allegations against all six men and Core Capital related to an alleged pump and dump scheme involving yet another company, Reliq Health Technologies Inc., formerly known as Moseda Technologies Inc.

“It is clear that Core Capital and other respondents promoted Reliq during the relevant time and amplified Reliq’s misleading disclosures, including by tweets and by pressing influential analysts to report on Reliq’s apparent but inaccurate revenue growth,” the panel’s decision reads.

“However, the balance of the evidence indicates that none of the Respondents were aware Reliq would not be collecting the revenues which it was recognizing as invoices were issued. As a result, the respondents lacked the mental state which would establish a breach (of the Securities Act)."

In its news release, the BCSC said the parties involved in the pump and dump “used a variety of tactics to conduct the scheme.”

“Some participants concealed their control of the issuers involved, distributed misleading news releases and arranged for the publication of misleading promotional campaigns,” the release reads.

In general, the goal of a pump and dump scheme is to artificially inflate the value of a stock so that those responsible can sell their shares into the increased demand that results, and earn a profit.

The decision does not specify how much money Core Capital, the Thindal brothers, Al Homsi or Kumar made from their participation in the scheme, noting that the panel expects to consider the available evidence on their profits when it makes a decision on sanctions.

The panel directed the BCSC’s executive director and the respondents to make submissions on sanctions over the coming months, setting April 8 as the final deadline of the process.

Company responds

In a news release issued Thursday, Core Capital lambasted the BCSC’s investigation of it and promised to “exhaustively pursue all available avenues to appeal the decision.”

The company claimed the investigation and the allegations it resulted in were “without merit” and alleged that the regulator had formed a conclusion about the respondents’ conduct and then spent eight years trying to find evidence to prove it.

“This matter has spanned over eight years and was riddled with glaring prejudice, blatant disregard for basic investigative procedure and a complete disregard for public interest,” the statement reads.

“Throughout this ordeal, Core, its principals and partners have experienced the commission’s overreaching powers, lack of due process, suppression/ignorance of exculpatory evidence and retaliatory behaviour.”

Core Capital promised to continue to “vigorously challenge” the panel’s findings all the way to B.C.’s highest court, the Court of Appeal.

Asked if it had a response to Core Capital’s complaints about its process, the BCSC sent CTV News the following brief statement:

“A panel of the B.C. Securities Commission (BCSC) has released a comprehensive 131 page liability decision outlining the detailed findings on why it concluded that Core Capital Partners and four associated individuals engaged in misconduct. As the respondents have stated their intention to appeal the decision, the BCSC is unable to comment further.”