VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 7, 2012) - The British Columbia Securities Commission has settled with a British Columbia corporation and two of its directors who admitted to illegally distributing securities of Aviawest Resorts Inc, a B.C. company that sold timeshare interests in vacation properties.
In a settlement agreement with commission staff, Nanaimo residents Melvin Zulak and Karla Ann Davis both admitted to selling Aviawest's promissory notes from February 2010 to April 2011 without the company having filed a prospectus, and without having an exemption from prospectus requirements.
Acting as agents of Aviawest, Zulak and Davis sold the promissory notes through Zulak Financial Group Ltd, a Nanaimo-based company primarily in the business of selling life insurance. Zulak and Davis are directors of Zulak Financial.
In the settlement, Zulak and Davis admitted that 14 of Zulak Financial's insurance clients purchased Aviawest promissory notes totaling $770,044 during the relevant period. Zulak and Davis met with their clients, provided them with the promissory notes, assisted them in signing the promissory notes and then provided the promissory notes and the clients' money directly to Aviawest. Zulak Financial received a commission of 1% for all but one such investment, amounting to approximately $7,700.
For their misconduct, Zulak and Davis have each agreed to pay $6,000 to the commission.
The settlement agreement notes that Zulak and Davis cooperated fully with commission staff, and that they have no prior regulatory or disciplinary history. Both remain registered as exempt market dealers.
Aviawest is the subject of a notice of hearing issued by commission staff in August 2012 (see 2012 BC SECCOM 316).
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the settlement agreement on our website, www.bcsc.bc.ca, by typing Melvin Zulak, Karla Ann Davis, Zulak Financial Group Ltd. or 2012 BC SECCOM 452 in the search box. You may view the Aviawest notice of hearing by typing Aviawest Resorts Inc. or 2012 BC SECCOM 316 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
For media inquiries, contact Richard Gilhooley, media relations, 604-899-6713. For public inquiries, call 604 899 6854 or 1 800 373 6393 (toll free).
Learn how to protect yourself and become a more informed investor at www.investright.org.