Alberta’s securities watchdog has ordered a Calgary man to pay more than $3.4 million for breaching the province’s securities laws.
Last year, a panel from the Alberta Securities Commission (ASC) found Ali Ghani and five entities he controlled had perpetrated investment fraud through the development and sale of a south Edmonton strip mall.
About 200 investors had put up money for Summerside Plaza, but lost their entire investments because Ghani had distributed $3.4 million from its sale to other projects, without their knowledge or permission.
The ASC has now ordered Ghani and two of the companies he controlled to pay $3.4 million in disgorgement orders for breaching securities laws. Disgorgement is a legal term that means having to pay back money that was earned wrongfully.
Ghani and the five entities he ran — Summerside Development Trust, Summerside Commercial Trust, Prism Summerside Limited Partnership, Prism Summerside Development Corp. and Prism Real Estate Investment Corp. — must also pay a $350,000 administrative penalty and $173,983 for the costs of the investigation and litigation.
Ghani has been ordered to resign from any position as director or officer of any entity that sells securities. He and the companies are also subject to permanent market-access bans.
“This was very serious misconduct that implies a heightened future risk of similar misconduct by the respondents and any other observers who might decide to emulate it,” the three-person panel said in its March 21 decision on sanctions.
Ghani did not attend or have anyone represent him at the sanction hearing in February.
CBC News has asked Ghani to comment on the ASC’s decisions but has not received a response.
The panel said in its most recent decision that severe sanctions were appropriate because the misconduct was serious and deliberate.
Ghani admitted in 2010 to breaching Alberta securities laws about prohibited representations. He agreed to pay the ASC $35,000 and the allegations were withdrawn as part of a settlement agreement.
The panel said Ghani “did not heed the lessons he should have learned.”
According to affidavit evidence, all of the companies have been part of insolvency proceedings or dissolution and they have no assets.
Ghani also had no assets, the decision said, according to a sworn statement in 2021.
The decision said a personal property registry search report in November 2023 showed Ghani had more than $3.6 million in judgments registered against him.
The panel said in its decision that Ghani and the companies likely have little or no money, and took that into account when determining sanctions.
The panel also weighed Ghani’s age — he is in his late 40s — and prospects of earning money in the future.
“Ghani still has many years ahead of him to work or find other ways to generate income, and he may be tempted to re-enter the capital markets — a risk that we must forestall,” the decision said.
A class-action lawsuit was certified in 2020 against Ghani and other entities, but it was discontinued earlier this year.