An Indo-Canadian couple thought that by declaring bankruptcy they will be scot-free from the $19 million in penalties they faced as a result of a pump and dump stock scheme but they were wrong. The B.C. Court of Appeal has upheld a lower court decision that ruled bankruptcy will not erase $19 million in penalties owed by stock manipulators Thalbinder (Thal) Singh Poonian and his wife, Shailu (Sharon) Poonian.
VANCOUVER – An Indo-Canadian couple thought that by declaring bankruptcy they will be scot-free from the $19 million in penalties they faced as a result of a pump and dump stock scheme but they were wrong.
The B.C. Court of Appeal has upheld a lower court decision that ruled bankruptcy will not erase $19 million in penalties owed by stock manipulators Thalbinder (Thal) Singh Poonian and his wife, Shailu (Sharon) Poonian.
The Poonians owe the penalties to the B.C. Securities Commission as a result of a tribunal decision in 2015 that found they were involved in a pump-and-dump stock scheme where investors lost millions, reported Province newspaper.
They have not paid any portion of the penalties.
The B.C. Securities Commission (BCSC) applied to the courts for an order that the amounts owed by the Poonians would not be released by any filing or discharge granted to them in bankruptcy. The legal action is part of a stepped-up effort in the past several years to increase penalty collection.
The B.C. Supreme Court ruled in 2021 in the BCSC’s favour, and the Poonians appealed that decision, arguing the lower court judge erred in his decision that the penalties issued by the tribunal fell under exemptions in the federal Bankruptcy and Insolvency Act that allow some debts such as judgments arising from fiduciary misappropriations to continue even after bankruptcy.
In a 28-page unanimous decision this month, the B.C. Court of Appeal dismissed the Poonians’ appeal, finding the exemptions do include the Poonians’ securities penalties because they resulted from the couple’s fraudulent conduct.
“I see no error in the chambers judge’s characterization of the acts giving rise to the underlying judgment, and I would not accede to the appellant’s characterization of this as behaviour ‘adjacent to fraud,’ wrote Court of Appeal Justice Peter M. Willcock.
Cody Reedman, the Poonians’ Vancouver lawyer, said in an email Monday that they are currently reviewing the decision and their next options.
The Poonians had earlier sought bankruptcy as a way to clear their debts by having a trustee take control of their assets and sell them. The Poonians’ assets amounted to just $3,189.16, reported the Province Newspaper.
Courtesy The Province
