I haven’t published anything lately about Concrete Equities or Wealthstreet, but things are continuing to evolve with those companies and the people who ran them. Late last year, a notice of hearing (or possibly two?) was held for Dave Jones (A.K.A. Colin David Jones), Rachael Poffenroth, Varun “Vinny” Aurora, David (Dave) Humeniuk, and Vincenzo De Palma. When we were clients of Wealthstreet, Ms. Poffenroth was the president of the company.
To any lawyer reading this: no statement made in this post can be considered libel; I am simply re-publishing publicly available information. I make no allegations myself, and all data provided is from public sources.
The two PDF documents below have the details, but allow me to quote two sections from the second PDF:
Allegations: Summary of Breaches (Page 3)
“1. Staff of the Commission (Staff) allege that Varun Vinny Aurora (Aurora), David Humeniuk (Humeniuk), David Jones (Jones) and Vincenzo De Palma (De Palma) breached the Act by acting as dealers without being registered in accordance with Alberta securities laws, and without an applicable exemption to the registration requirement, or by authorizing, permitting or acquiescing in such conduct by one or more corporate entities of which they were a director or officer.
The Impact of the Respondents’ Actions (Page 10)
“76. The Offending Partnerships and CE Fund collectively raised approximately $110,000,000, with $96,735,000 raised using the impugned Offering Memoranda referred to above. In total the Concrete Group raised over $118,000,000 through the issuance of securities to 3,723 investors.
77. On May 26, 2009 Partnerships 1 through 5 sought and obtained protection from their creditors through the filing of a Notice of Intention to Make a Proposal under section 50.4(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended. On June 9, 2009 Ernst & Young Inc. was appointed as Interim Receiver of Partnerships 1-5.
78. On July 29, 2009 Concrete, the Offending Partnerships and each of their general partners were made subject to a Receivership Order (the Receivership Order). Ernst & Young Inc. was appointed Receiver for each entity.
79. Prior to the Receivership Order, the shareholders of the Concrete Group received distributions of slightly under $5,000,000. This represents a payment of only roughly 4% of their investment principal.
80. In contrast, prior to the Receivership Order, Concrete was paid over $15,000,000 in commissions as a result of the various Concrete Agreements. However, under the terms of those Concrete Agreements, Concrete was only entitled to commission payments of $10,107,750. Concrete was overpaid approximately $4.9 million.
81. In addition to the commission payments to Concrete, Aurora, De Palma, Humeniuk and Jones were also collectively paid over $8.0 million as directors of the various Concrete Group entities.
82. In its Third Report of the Receiver, dated December 2, 2009, Ernst & Young Inc, as Receiver, concluded that “based on the information presented in this report it is clear that the directors of Concrete mismanaged the affairs on Concrete in material respects.”
83. It is uncertain what recovery, if any, will be made by the 3,723 investors in the Concrete Group of their collective $118,000,000 investment, and significant further recovery of their investments is questionable.”
The two PDFs are below and can be downloaded, printed, or shared.
Dave Jones and Rachel Poffenroth, ALBERTA SECURITIES COMMISSION Notice of Hearing, Oct 26, 2010
Hi Jason, I really don’t understand what is happening and what to do with the investment that I have with Concrete. I have specifically invested on Glenway Registered Capital and it was under my LSRP and RRSP at Olympia Trust. But since all this started, i really don’t know who to ask and what i need to do? Is there still hope to get the money back?
Any reply is really appreciated. Thanks!
I’m not familiar with that investment – I’m only aware of what has been going on with the five Calgary properties and the Mexico investments. My suggestion is for you to call Ernst & Young and ask to speak to someone that was involved with the Concrete Equities case and see if they can give you any direction. I suspect you’re in for some bad news, however. Sorry. 🙁
Jason, I was another unfortunate sucker, thanks to my blind faith in Dave Jones et al. What ever was the outcome of the 5 Calgary properties? Last I heard there was a proxy vote in May 2010, but I have never seen the outcome. Can you provide some insight?
Thanks
The five Calgary properties were rescued and are now being managed by Avenue Commercial (www.avenuecommercial.com). You’ll want to contact them to get a status update. I emailed them a week ago to get a status update and haven’t heard back yet – I’ve just emailed them again tonight.
I never claim to be the smartest person in the room, but I was first struck by the radio ads for Concrete Equities which seemed to all but guarantee massive returns on investment, saying “you do the math.” Well, I couldn’t do the math, but I was reminded of the disclaimer attached to American adverts for investments, which state: “past performance is not an indicator of future success.” In fact, to my way of thinking, past success is often an indicator of a lucky streak, which is usually due to reverse itself to conform to the law of averages. I would have probably bet against such an investment paying off, especially when the claims of success were largely due to a lucky spike in real estate, which had long since past its peak.