A panel of the B.C. Securities Commission has extended a temporary order against a B.C. company and a man associated with it, reasoning that doing so is “necessary to protect the public.”
The order was initially granted back in November. It prohibits all trading of securities of Baynsworth and Lloyd Holdings, Inc., and bans both the company and its sole director James Michael Burnett from promoting the company and its securities.
Initially, these prohibitions were scheduled to last only until Dec. 10, 2024, but the extension will keep them in place for another year, through Dec. 9, 2025.
While the panel granted the extension on Dec. 9, 2024, it did not publish its reasons for doing so until this week.
The panel’s decision included additional details about the allegations against Burnett and his company, which have not been proven. The panel extended the order based on what it considered to be a strong “prima facie” (on its face) case suggesting that the allegations are true and the order is necessary.
According to the decision, Baynsworth’s website advertised “high-return, no-risk, 100-per-cent-money-back-guaranteed investments,” offering investors returns ranging from 7.2 to 18.3 per cent per year.
“The respondents do not give any clear explanation of how depositors' funds would be used or how returns would be generated, and what risks are involved,” the decision reads. “A reasonable investor would want to know the answers so they could assess the likelihood that the risk-free return is achievable.”
The decision indicates that Baynsworth and Burnett solicited investors through their website as well as “Google posts and a WhatsApp business account.”
The website claimed that the company “offers government contract procurement solutions” with a “profit-sharing approach,” according to the decision. It also invited interested investors to contact the company for “an information kit.”
When an undercover BCSC investigator did so, the decision notes, he was given a link to the WhatsApp business account, where Burnett told him he would receive returns of 10 to 22 per cent per year.
The investigator later contacted Baynsworth using his true identity and asked them to remove the promotional material from their website, to which Burnett responded and claimed that he doesn’t deal in securities and that the website had been shut down “months ago.”
Despite this claim, investigators found the website was still available and unchanged as of Dec. 5, 2024, according to the decision.
“We agree with the executive director that it is necessary to protect the public from investing in Baynsworth programs,” the panel’s decision reads.
“We are concerned that unsophisticated investors would be attracted by the promise of high returns with no risk. With the continued accessibility of the Current Website and Burnett’s insistence that he is not dealing in securities, there is a risk that an unsuspecting member of the public will invest in the Baynsworth programs. It is also harmful to the integrity of the capital markets and public confidence in them to permit unregistered trading to continue even after the respondents have been notified and given an opportunity to cease trading.”
Neither Baynsworth nor Burnett attended or participated in the Dec. 9, 2024, hearing at which the panel made its decision.
