Vancouver businessman David Sidoo was allegedly part of a business ring that defrauded investors out of millions of dollars, according to a court filing from the U.S. Securities and Exchange Commission (SEC).
The complaint, filed before the district court in the southern district of New York on Thursday, names Sidoo along with seven other defendants as being part of a “pump and dump” scheme.
Regulators say the defendants bought stocks in various companies, artificially inflated their stock prices, and then sold the assets to unsuspecting investors, making millions of dollars in the process.
The scheme started in 2006 and continued until 2020, according to documents, and regulators say the defendants earned more than $145 million US illegally.
The SEC is seeking firm regulatory action against all eight defendants, including injunctions forbidding them from further trading.
Sidoo is not being criminally charged and the allegations have not been proven in court.
Sidoo, 62, is also a philanthropist, the former CEO of mining firm Advantage Lithium Corp., and a founding shareholder of American Oil & Gas Inc., which was sold in 2010 for more than $600 million.
According to the complaint, the “global” scheme to defraud investors involved four of Sidoo’s co-defendants, as well as six other people who have been criminally charged as part of a separate FBI investigation.
“These pernicious ‘pump and dump’ schemes made the defendants rich while causing real harm to ordinary, retail investors who were left swallowing the losses,” said U.S. federal attorney Damian Williams in a statement announcing the FBI’s criminal charges.
None of the allegations have been proven in court.
17 companies allegedly ‘dumped’
The principal defendant in the SEC complaint is Ronald Bauer, a Canadian-British dual citizen who investigators say currently lives in the U.K.
Bauer allegedly oversaw numerous acts of fraud using the “pump and dump” method, according to the complaint. Investigators say he and his co-defendants used 17 companies in total as part of the scheme.
Regulators say the eight men bought controlling stakes in companies using offshore companies to conceal their involvement.
They then allegedly used media campaigns to convince other investors to buy their companies’ stocks without disclosing their ownership.
The investors did so by setting up “front companies” — shell companies owned by them — and distributing their stock among these companies. To other investors, it appeared that no one company held all the stock, despite that being the case.
Sidoo was allegedly involved in orchestrating the scheme using two companies, North American Oil & Gas Corp., and American Helium Inc.
According to the complaint, Sidoo and other investors allegedly made over $16 million US by defrauding investors using the companies.
Though Sidoo has not been criminally charged, four of his co-defendants, including Bauer, face up to 20 years in prison for each of the crimes they have been charged with.
The FBI says numerous authorities around the world were involved in the investigation, including the RCMP, Alberta Securities Commission, and the Toronto Police Service.
Sidoo played professional football for six years for the Saskatchewan Roughriders and B.C. Lions.
He was sentenced to three months in prison in 2020 after he was found to have paid $200,000 US to have a professional test-writer impersonate his two sons and write their SATs.
The conviction led to him losing his Order of B.C. — which had been awarded for his philanthropy — and the University of British Columbia renaming a football field that had originally been named after him.