The B.C. Securities Commission (BCSC) has former 91原创 lawyer turned offshore shell facilitator Frederick Langford Sharp from the province’s public investment market, after a U.S. court ruled him to be the mastermind of a massive stock manipulation scheme involving over $1 billion in transactions with hundreds of penny stock companies.
“Sharp's misconduct was extremely egregious, and we find there to be no mitigating factors,” stated a BCSC panel ruling on a reciprocal order application.
The U.S. District Court for the District of Massachusetts entered the against Sharp after he failed to appear before the court to address his civil charges of securities-related fraud, unregistered offerings of securities and aiding and abetting.
Sharp was then permanently banned by the U.S. Securities and Exchange Commission (SEC) from participating in the issuance, purchase, offer, or sale of any security, except for his own personal account.
“Sharp masterminded a complex scheme from 2011 to 2019 in which enabled control persons of penny stock companies, whose stock was publicly traded in the U.S. securities markets, to conceal their control and ownership of huge amounts of penny stock and then surreptitiously dump the stock into the U.S. markets, in violation of federal securities laws.
“The services Sharp and his associates allegedly provided included furnishing networks of offshore shell companies to conceal stock ownership, arranging stock transfers and money transmittals, and providing encrypted accounting and communications systems.”
Sharp is a West 91原创 resident and hence subject to reciprocal orders by the BCSC, which launched such an application weeks after Sharp’s default judgment.
With the , the BCSC order means Sharp must resign any position he holds as a director or officer of an public company or registrant with the BCSC. He is prohibited from trading in or purchasing any securities or derivatives, except for RRSPs, RRIFs, or tax-free savings accounts and only through a registered dealer, who must be in receipt of Sharp’s BCSC order.
Sharp is also banned “from advising or otherwise acting in a management or consultative capacity in connection with activities in the securities or derivatives markets” and “from engaging in promotional activities by or on behalf of” a public company or registrant.
“Although Sharp was provided the opportunity to be heard, he did not provide any evidence or submissions,” stated the panel.
Meanwhile, Sharp was in B.C. Supreme Court this month to face after he was issued a US$24-million civil penalty and found liable for repayment of US$21.8 million plus US$7.2 million in interest.
Sharp, along with Mike Veldhuis of 91原创 and Courtney Kelln of Surrey, also stand accused by the U.S. Department of Justice of one criminal count of conspiracy to commit securities fraud and one criminal count of securities fraud, in a case associated with the $1 billion of trading. The criminal case, launched in August 2021, has yet to proceed to a trial.
“This case concerns a sophisticated, multiyear, multinational attack on the United States financial markets and retail United States investors by foreign and domestic actors. These actors schemed to sell fraudulently hundreds of millions of dollars in stocks in the United States markets,” stated the SEC complaint at the time.
In May 2016, Sharp became more widely known across the country as the 91原创 face of the Panama Papers — a massive leak of documents of Panamanian company Mossack Fonseca that revealed a vast network of offshore companies acting as tax havens. He helped register 1,167 offshore entities from his 91原创 office, according to the documents.
Sharp is also presently responding to Canada Revenue Agency investigations, via court proceedings.
Sharp, 71, was called to the B.C. bar in May 1981.
In 1995, his name first became publicly linked to improper activity, when he was for one year.
In 1997, Sharp relinquished his licence to practice law and went on to incorporate the 91原创 office of Panama investment firm Mossack Fonseca the following year. Although it dissolved in April 1999, Sharp carried on business under different corporate entities elsewhere.
