A retired Vancouver-area lawyer has been charged after an investigation into a multi-million dollar stock market–related scheme.
In late 2013, Life Stem Genetics Inc., a purported operator of stem cell therapy clinics based in Beverly Hills, California, began trading as LIFS on the OTC Bulletin Board market.
After Life Stem Genetics made claims in a series of press releases, trading volume and LIFS stock price jumped.
The U.S. Securities and Exchange Commission temporarily suspended trading in Life Stem Genetics’ shares on November 25, 2013, due to concerns about the accuracy and adequacy of its disclosures.
By the close of 2014, Life Stem Genetics’s total stock market value was almost zero.
With assistance from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the U.S. Securities and Exchange Commission, RCMP launched an investigation into statements made to potential investors and partners that were alleged to be false.
Investigators found that although the company claimed to be a breakthrough company with a chain of clinics that offered innovative stem cell medical treatments to thousands of patients, the company did not have any clinics, patients, or revenue.
Investigators found that a Delta resident, 73-year-old Peter John Merry (who was a practising lawyer at the time) was a central figure at Life Stem Genetics and was involved in the publication or distribution of the claims.
Three counts of false prospectus to attract shareholders were laid against Merry on March 5.
RCMP Supt. Brent Taylor, who is in charge of the Federal Serious and Organized Crime Financial Integrity Program, explained in a news release that the impact went beyond financial loss.
“As an example, one victim reached out to Life Stem Genetics, Inc., seeking to treat a family member’s seizures; instead, they were lured to invest in the company,” Supt. Taylor stated. “No treatment was received and the victim lost $5000 and precious time not spent in actual treatment.”
Merry will appear in Surrey provincial court on March 26.
