B.C. man banned from financial markets over role in US$215 million securities fraud conspiracy

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

A former B.C. resident currently serving prison time in the U.S. for his role in a US$215 million securities fraud conspiracy has been banned from the province’s financial markets for life.

The B.C. Securities Commission issued the ban against Colin Jeffrey Heatherington last week and shared details about the case in a news release Wednesday.

According to the BCSC discipline panel’s decision imposing the ban, Heatherington pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud in California in February 2024.

The charge stemmed from a market manipulation scheme involving billions of shares of U.S.-based penny stocks, the BCSC said in its news release.

The commission said Heatherington “oversaw” the purchases of the shares, which were then “traded using various practices designed to fraudulently inflate their value.” The scheme was active from 2004 to 2008, according to the BCSC.

The U.S. court sentenced Heatherington to 42 months (three and a half years) in prison, to be followed by two years of probation. It also ordered him and a co-conspirator to pay restitution to investors for the more than US$215 million they lost in the scheme.

The panel’s decision notes that Heatherington made “at least $15 million” from his crime, but concludes investors are “unlikely” to ever recover their losses.

Heatherington’s misconduct was “extremely serious,” according to the panel.

“His participation in the market manipulation shows that Heatherington is dishonest and lacks integrity,” the decision reads. “The extent and the calculated nature of his misconduct make it clear that only a permanent sanction will be sufficient to protect the public.”

The panel issued an order permanently prohibiting Heatherington from “trading in or purchasing and securities or derivatives,” from working as a director or officer of any company that issues such products, and from working as a registrant or promoter in the financial markets.

There is an exception to the ban that allows him to trade in securities for his personal accounts, but only through a registered dealer, and only if he first provides that dealer with a copy of the panel’s decision.