Tag: Dave Jones

Concrete Equities and Wealthstreet Alberta Securities Commission Documents

I’ve had these documents for several years and had been meaning to put them up for public access – all text below is taken verbatim from the documents in question.

Alberta Securities Commission: Notice of Hearing (Oct 2010) [Download PDF]
To: Wealthstreet Inc, Colin Davis Jones (aka David Colin Jones, aka Dave Jones), Rachael Poffenroth
Allegations & Summary of Breaches:

  1. “Staff (Staff) of the Alberta Securities Commission (Commission) alleges that Wealthstreet Inc. (Wealthstreet), Colin David Jones also known as David Colin Jones (Jones) and Rachael Poffenroth (Poffenroth) (collectively, the Respondents) engaged in illegal trading and distributions of securities in Alberta to Alberta investors.”
  2. “Staff also alleges that Jones acted as an advisor in Alberta without being registered as an advisor, made prohibited and misleading or untrue representations to Alberta investors and engaged in unfair practices in transactions with Alberta investors.”

Alberta Securities Commission: Amended Notice of Hearing (Oct 2010) [Download PDF]
To: VARUN VINNY AURORA, DAVID HUMENIUK, DAVID JONES, VINCENZO DE PALMA
Allegations & Summary of Breaches:

  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.”
  2. “Staff allege that Aurora, Humeniuk and Jones breached the Act by making, or by authorizing, permitting or acquiescing in the making of, statements each knew, or ought reasonably to have known, were misleading or untrue in a material respect, or that did not state a fact that was required to be stated or that was necessary to make the statement not misleading, and that would reasonably have been expected to have a significant effect on the market price or value of the security in question.”
  3. “Staff allege that Aurora, Humeniuk, Jones and De Palma each breached the Act by trading in securities on his own account, or authorized, permitted or acquiesced in the trade of securities on one or more companies’ own account, in circumstances where such
    trades were distributions, without having filed a prospectus or preliminary prospectus for which a receipt had been issued by the Executive Director of the Commission (the Executive Director), and for which no valid exemption applied.”
  4. “Staff allege that Aurora, Humeniuk, Jones and De Palma each acted contrary to the public interest.”

Alberta Securities Commission: Notice of Decision (Dec 2011) [Download PDF]
To: Wealthstreet Inc, Colin Davis Jones (aka David Colin Jones, aka Dave Jones), Rachael Poffenroth
Recognition of Seriousness:

  1. “Jones, in our view, still does not recognize the seriousness of his misconduct. Communications to investors that are in evidence and his statements before us (on the few occasions that we saw or heard from him) demonstrate Jones’s persistence in contending that any issues with the Promissory Notes and the other securities sold through Wealthstreet were caused by global economic conditions and not his actions. He continues to accept no blame or responsibility for his illegal actions. When cross-examining investor witness KC, he implied that she was in a more balanced position with her current investments (through Wealthstreet) than she had been before meeting Jones. In fact, KC had gone from having retirement savings of over $200 000 and real estate equity of several hundred thousand dollars to apparently losing all of her savings and owing $540 000 on home equity lines of credit. In addition to not accepting responsibility for the financial harm he caused his clients, Jones seems unwilling or unable to appreciate the fact that his actions contravened Alberta securities laws and were contrary to the public interest.”
  2. “We believe that Poffenroth recognizes the seriousness of her misconduct and sincerely regrets both her involvement in Wealthstreet and the harm caused to Wealthstreet investors. She candidly admitted that she was not qualified to act as Wealthstreet’s president. She also testified during the Merits Hearing that she experienced “shock and hurt” at learning some of what Jones had done and how the investors had been affected. She appeared to accept the majority of the sanctions suggested by Staff as appropriate and expressed her intention not to be involved with public companies in the future. However, the evidence also indicates that Poffenroth had concerns about being under-qualified and being upset over some of Jones’s activities while still employed at Wealthstreet. Despite her concerns and reservations, Poffenroth continued for a time to act as Wealthstreet’s president and collect her generous remuneration. She later filed a claim with the Trustee for money owing to her from her wrongful dismissal claim. At no time did she report Jones or Wealthstreet to any regulators. We conclude that while some of her remorse and recognition of seriousness is genuine, some of that contrition stems from her desire to minimize the sanctions she might receive.”

Concrete Equities PDF Documents

Clearing out some old Evernote folders, I wanted to publish these Concrete Equities-related documents for search engines to index.

SEARCHABLE-PDF-Dave Humeniuk Statement of Defence Aug 28

PDF-Dave Humeniuk Statement of Defence Aug 28

SEARCHABLE-PDF-Aug 21 Statement of Claim and Affidavit

PDF-Aug 21 Statement of Claim and Affidavit

Letter to El Golfo Investor, dated November 2, 2010

E & Y Feb 16, 2011 Letter to Mexico Investors

Basi Affidavit v5 (Filed May 26, 2010)

Dave Jones’ Wealthstreet Dragon Fund Now Worthless

Since a few people email me every month asking if I know anything about the status of the Dragon Fund, I thought it would be helpful if I published this letter I received from Olympia Trust Company last month. It officially declares that the Dragon Fund is defunct and worthless. If you need the documents required to remove this investment from your account, please contact Olympia Trust Company at 1-877-565-0001.

Dragon-Fund-Defunct-Dave-Jones-Wealthstreet

ASC Rules David Jones and Wealthstreet Breached Alberta Securities Laws

“An Alberta Securities Commission (ASC) panel has found that David Jones, sole director and shareholder of Wealthstreet Inc., breached Alberta securities laws by acting as an advisor without being registered and engaging in an unfair practice by unreasonably pressuring at least one investor to purchase securities through Wealthstreet.   The panel also ruled that Jones, Wealthstreet and former Wealthstreet president Rachael Poffenroth illegally traded in and distributed securities of Wealthstreet, and that all the conduct was contrary to the public interest.” – Alberta Securities Commission Web site

“A Calgary financial advisor well-known for his market reports on local radio and TV stations provided “disastrous” and “unconscionable” advice to some investing with him, the Alberta Securities Commission ruled Monday, adding David Jones used “scare tactics and falsehoods” with at least one client.” – The Calgary Herald

Not much to say is there? Dave Jones worked very hard to sell a lot of financial products to a lot of different people, and now he’s seeing the impact of his actions. Let’s not forget former Wealthstreet President Rachel Poffenroth – she was right there alongside Dave Jones. Now that the trial is done, sanctions will be determined at a later date.

Dragon Fund Update, July 25th, 2011

I received this via email today. If you’re an investor with money in the Dragon Fund, here’s what’s going on (which is to say, still not much):

July 25, 2011

Dragon Fund Update

Recently Dragon Fund and the trustees of the fund have been served with an Amended Statement of Claim which has included MacLeod Dixon. This amendment has created a conflict of interest between our legal counsel (MacLeod Dixon), ourselves and the fund.  MacLeod Dixon is no longer able to represent the fund as this is a conflict of interest.

New legal representation for Mike Arnold and Tina Zowtuk has recommend we resign as trustees . Due to the Amended Statement of Claim the new legal counsel can represent us personally but not the fund.

We are currently asking for individuals to put their name forward to take on the trustee role of the Dragon Fund LP.  If we are unable to replace the trustees internally the fund will have to appoint an external trustee.

If you are interested in becoming a trustee please forward your contact information.

Regards

Mike Arnold
Tina Zowtuk

Avenue Commercial Castleridge LP Investment Corp. Annual General Meeting Notes

Today I attended the Avenue Commercial Castleridge LP Investment Corp. Annual General Meeting and finally learned about the status of our troubled Concrete Equities investment. There’s some bad news, and some good news. Overall though, it was net-positive: the bottom line is that there’s some debt to deal with (the vultures want their pound of flesh), but we have full ownership of our property, are cash-flow positive, and things are looking up in terms of us eventually getting back on track for the cash disbursements we all signed up for. I took as many notes as I could; here they are in point form:

  • Presented by Steven Butt, General Partner, Avenue Commercial
  • Very positive on this particular building
  • They were given millions of pages of documents by Ernst & Young; hard drives. Five months of work to process, several hundreds of thousands of pages scanned
  • They’re not going to go back and look at all the documents – they’re moving forward
  • We now have financial statements (hooray!)
  • T-5013 tax forms are available
  • Castleridge: 8.25 acres of property, 74,000 square feet of leasable space
  • Building constructed in 19991 and in good condition, but the overall property needs some work. Suffers from a few years of neglect
  • Nov 2007 we paid 24.2 million for the Castleridge location. Concrete took $3.2 million as their fee.
  • The June 2008 appraisal was $18.5 million; the June 2010 appraisal $18.2 million
  • Loss in value of $5.7 million. Why? Large promotion fee, receivership costs, spike in retail vacancy, 30% vacancy
  • Exit of CCAA after 1.5 years in July 21st, 2010

Continue reading Avenue Commercial Castleridge LP Investment Corp. Annual General Meeting Notes

Alberta Securities Commission Notice of Hearing for Dave Jones, Rachael Poffenroth, Varun “Vinny” Aurora, David Humeniuk, and Vincenzo De Palma

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.

2. Staff allege that Aurora, Humeniuk and Jones breached the Act by making, or by authorizing, permitting or acquiescing in the making of, statements each knew, or ought reasonably to have known, were misleading or untrue in a material respect, or that did not state a fact that was required to be stated or that was necessary to make the statement not misleading, and that would reasonably have been expected to have a significant effect on the market price or value of the security in question.

3. Staff allege that Aurora, Humeniuk, Jones and De Palma each breached the Act by trading in securities on his own account, or authorized, permitted or acquiesced in the trade of securities on one or more companies’ own account, in circumstances where such trades were distributions, without having filed a prospectus or preliminary prospectus for which a receipt had been issued by the Executive Director of the Commission (the Executive Director), and for which no valid exemption applied.

4. Staff allege that Aurora, Humeniuk, Jones and De Palma each acted contrary to the public interest.”

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. Continue reading Alberta Securities Commission Notice of Hearing for Dave Jones, Rachael Poffenroth, Varun “Vinny” Aurora, David Humeniuk, and Vincenzo De Palma

Alberta Securities Commission Notice of Hearing for Varun “Vinny” Aurora, David Humeniuk, and Dave Jones

Wondering what happened to Varun “Vinny” Aurora, David Humeniuk, and Dave Jones? The Alberta Securities Commission has something to say. I quote:

“The Alberta Securities Commission (ASC) has issued a Notice of Hearing alleging Calgary residents Varun Vinny Aurora, David Humeniuk and David Jones breached Alberta securities laws by acting as dealers without being properly registered, making serious omissions and misrepresentations to investors and distributing various Concrete Equities Group entities’ securities using offering documents not in compliance with Alberta securities laws.

In the Notice of Hearing, ASC staff allege that Aurora, Humeniuk and Jones, as directors and officers of Concrete Equities and multiple related companies and limited partnerships, made several serious omissions and misrepresentations by failing to fully disclose material, non-arms length contracts connected to the securities being sold and failing to disclose Humeniuk’s lifetime withdrawal from the Real Estate Council of Alberta to investors.”

The appeatence to set a date for the hearing will be held on October 13th, 2010, at 1 p.m. in the ASC Hearing Room on the 6th Floor, 300 – 5th Avenue S.W., Calgary, Alberta. I’m pondering going myself – I wonder if it’s open to the public? The full notice of hearing document can be found on the ASC Web site, but I’ve also mirrored a copy of it here. Continue reading Alberta Securities Commission Notice of Hearing for Varun “Vinny” Aurora, David Humeniuk, and Dave Jones

Dragon Fund Meeting Scheduled for June 16th

If you’re an investor that has money in the Dragon Fund, the fund originally started by Dave Jones of Wealthstreet, you’ll be interested in knowing that the trustees of the Dragon Fund (of which Dave Jones is no longer one) have called a meeting. I phoned Michael Arnold (one of the trustees) today to ask what the latest updates were on the land in Airdrie, and he said they had been contacting investors via email – and that the email they sent me bounced. The meeting is being held on June 16th, 7pm, at Southside Victory Church (6402 1A Street SW) in Calgary. I’ll be there and will report back what the trustees tell the investors.

Wondering What Happened to Wealthstreet?

If you’re in the Calgary area and have had any dealings with Wealthstreet or Dave Jones, the President and CEO of Wealthstreet, the above notice of bankruptcy of Wealthstreet Inc. tells you where the company is at now. I get a few emails a month asking me what’s happening with Wealthstreet, and now it’s official. I’m not an accountant, but according to page two of this document, there are $3.2 million in unsecured creditors, $942K in preferred creditors, for total liabilities of $4.2 million dollars. The asset side of the equation shows $40K in accounts receivable, $4.4K in cash, and $1K in furniture. Somehow this company that dealt with millions of dollars in investment money only has assets totaling $45K. Interesting how that worked out, isn’t it?

The sad part of this document is the list of unsecured creditors; there are 136 individuals and companies on that list – most of them individuals – who are owed large sums of money. $50,000…$100,000…one couple is owed $228,167! Entire life savings were wiped out, which I find disheartening. I feel very fortunate that we were able to escape losing virtually nothing directly with Wealthstreet, instead having the bulk of our money locked up in the battle with the now-defunct Concrete Equities – a battle that seems to be nearly won last I heard. I received a copy of this document because apparently we have an unsecured claim with Wealthstreet of $1…despite what the cover letter says about a minimum $25 claim. I certainly never filed any claim with Wealthstreet.

Worth noting is that the single largest unsecured creditor is by Rachel Poffenroth in the amount of $658,874. Why is that worth noting? She was the one-time President of Wealthstreet – she held the position when Ashley and I started dealing with Wealthstreet. Also noteworthy is that the second biggest creditor, this time a preferred creditor, is one Dave Jones, claiming $650,000. Given the corporate assets of $45K, I think they’re both out of luck. It’s a strange world we live in…