The company admitted selling 29 shares between February, 2005, and September, 2008, to residents of Nova Scotia and Alberta. Sixteen of those investors did not qualify to make the purchase.
A settlement agreement announced last week by the Nova Scotia Securities Commission said the company received $536,250 through sold shares, of which $181,000 came from investors who did not qualify for the provincial exemption.
Scallop Shell Pollution Solution was also required to file a report of exempt distribution, which is required within 10 days of the purchase.
Farrell Munroe, listed as president of Scallop Shell Pollution Solutions, could not be reached for comment.
The distribution sale of securities is supposed to be a closed system. In order to sell shares, promoters must file with the securities regulator and the sale needs to be reviewed to make sure it is in compliance with all the requirements, said securities commission spokesperson Scott Peacock.
“What happens is when we’re satisfied there has been a violation we prepare a statement and file a notice of hearing,” said Peacock. “Quite often, as it happened in this case we’re always in touch with the parities if they decide they want to settle the matter, we enter a settlement agreement.”
The settlement agreement stated the company admitted to the violations and on top of the $5,000 fine paid to the security commission it will pay $750 covering the cost of the investigation and conduct of the proceedings.
