All of the aforementioned executives have all since left the firm and the BCSC’s allegations have yet to be proven as the investigation continues.
The British Columbia Securities Commission (BCSC) has accused the Vancouver-based blockchain technology investment firm and three of its executives of making a false statement about the sale of its shares, thereby violating the Securities Act since BLOK traded on the Canadian Securities Exchange.
In 2018, BLOK Technologies announced that it had raised approximately $5.4 million through a private placement, but did not disclose that it had already spent or owed approximately $4.4 million in consulting fees. As a result, BLOK would only retain approximately $950,000, or less than 18% of the amount raised.
According to the regulator, Robert Earle Dawson, president and CEO of BLOK; James Joseph Hyland, its vice-president and director; and David Malcolm Alexander, its chief financial officer, authorized, permitted or acquiesced in the company’s misrepresentation and therefore also broke the law.
Robert Earle Dawson, aka Rob Dawson, left in January 2019 and is currently chief executive of IOVIA, a “consumer participation company”.
All of the aforementioned executives have all since left the firm and the BCSC’s allegations have yet to be proven as the investigation continues.
BLOK is “a public company that invests in and develops businesses in the blockchain and emerging technology sectors,” according to its own description. The company was removed from the CSE in October 2020.
In a June 8, 2018 press release, BLOK announced that it had raised a total of $5,403,384 through a private placement. BLOK said the net proceeds would be used to advance the company’s current blockchain investment projects, evaluate new blockchain opportunities, and for working capital purposes.
BLOK did not disclose that it would only keep $947,321.50, or less than 18%, of the amount raised, as it had already spent or owed $4,456,062.50 in consulting fees.
By announcing the total proceeds of the private placement but failing to disclose that it would retain less than 18%, BLOK made a statement to investors that it knew, or reasonably should have known, that it was a false statement contrary to the Securities Act.