U S Securities and Exchange Commission (TSX:*SEC) Wednesday July 25 2018 - Street Wire

by Mike Caswell

Vancouver's Douglas Roe has reached a deal to settle civil charges he faces from the U.S. Securities and Exchange Commission for a purported eco-tourism listing. The SEC claimed that he tried to register a company in the U.S. while hiding his role with that company. The company had a Jamaican man as a figurehead officer and director, according to the SEC.

The details of Mr. Roe's settlement are not yet public, as the SEC's commissioners still must approve it. The judge entered an order on Monday, July 23, to stay the case while that happens. When it filed the charges, the SEC sought a permanent penny stock ban and a permanent officer and director ban. The SEC did not accuse Mr. Roe of making any money from the scheme, but it did ask that he pay an appropriate fine. Like most SEC defendants, Mr. Roe is not likely to admit any wrongdoing.

The settlement comes over one year after the SEC first charged Mr. Roe, with the case suffering a substantial delay while the regulator tracked him down to serve him with its complaint. The SEC initially attempted to serve him at an address in Coal Harbour, 1111 Alberni St. (That is the address of the Shangri-la building, a 62-storey tower.) A deputy sheriff was only able to contact Mr. Roe by phone. According to a service affidavit, Mr. Roe was evasive and used abusive language.

The SEC eventually did find Mr. Roe, thanks to his regular attendance at golf tournaments. It tracked him to an event in California, at the Terra Lago Golf Club. (His attendance was no secret. He posted it to his Twitter account.) A process server delivered the charges on the morning of Jan. 6, 2018, after which Mr. Roe hired a lawyer to handle the matter for him.

The SEC set out the details of its case in a civil complaint filed in the District of Maryland on May 11, 2017. The regulator cited Mr. Roe for an attempt to obtain a U.S. listing for a company called Blue Mountain Eco Tours Inc. The scheme, as described by the SEC, began on April 25, 2012, when Blue Mountain filed a Form S-1 registration statement (which is part of the process to obtain a listing in the U.S.). The statement sought to register the offer and sale of 3,041,000 shares at five cents. According to the SEC, the statement did not disclose that Mr. Roe was intimately involved with the company. Among other things, he had enlisted Blue Mountain's lawyer, accountant and auditor, the SEC claimed.

The SEC also named a Jamaican man, Donald Lindo, as a defendant. According to the complaint, Mr. Lindo was to be the figurehead officer and director of Blue Mountain. The SEC said that Mr. Lindo allowed his name and signature to be used in fraudulent and misleading regulatory filings. He often signed corporate documents at Mr. Roe's request without reading them, the SEC claimed. The filings that Mr. Roe prepared, as described by the SEC, portrayed Blue Mountain as a company having Mr. Lindo at the helm of an active business. Those filings also falsely stated that Mr. Lindo had lent the company money and that he had an industry specific certification, the complaint stated.

The SEC has not given any reason that Mr. Roe would have hid his role with Blue Mountain, but he has been associated with at least one U.S. listings in the past that did not work out so well for investors. He was briefly the president of Global Resource Energy Inc., a purported LED street light distributor. He took over from Saskatchewan resident Harry Lappa in 2011, and then resigned a few months later. About a year after that, the stock went to a 53-cent high, before dropping to pennies.

There was also Sunpeaks Ventures Inc., a controversial OTC Bulletin Board listing. In 2009, a private entity controlled by a Douglas Roe was one of nine seed shareholders in Sunpeaks. The stock later went to a $2.82 high amidst a paid touting campaign, before dropping back to pennies.

(The Sunpeaks promotion attracted the attention of the Alberta Securities Commission, which went to some length to secure an interview with the company's former president, Scott Beaudette. He refused to attend the interview, and fought the matter through the courts. He took the case all the way to the Supreme Court of Canada, where he lost. It appears that nothing has happened with the Sunpeaks file since then, as the ASC has not begun any proceedings against Mr. Beaudette or anybody else.)

Whatever Mr. Roe may have had in mind for Blue Mountain, he was unable to do anything with the company. Despite repeatedly filing its S-1, Blue Mountain never obtained a U.S. listing. On Feb. 26, 2016, the SEC suspended the company's registration, citing false statements in its registration materials.

Canjex Publishing Ltd. 2018