Cease traded company target of class action suit
By Bruce Johnstone, Leader-Post July 8, 2009
REGINA — A Calgary investment company, which has been ordered to cease trading in Saskatchewan and Alberta, is now the target of a $75-million class action lawsuit.
A cease trading order issued June 23 against Shire International Real Estate Investments Ltd., Jeanette Cleone Couch and a number of related companies and individuals, was extended Tuesday by the Saskatchewan Financial Services Commission.
The Alberta Securities Commission, which extended its interim cease trading order last month, is investigating Shire for alleged fraud and misuse of investor funds.
And earlier this week in Court of Queen's Bench in Calgary, a class-action lawsuit against Shire was launched by two Alberta investors, Lucia de Wet and Jennifer Lofgren.
The lawsuit alleges that the Shire, Couch and related companies and individuals raised millions of dollars from investors in Canada from 2005 to 2009 for 10 "purported real estate development projects, none of which was genuine or as represented.''
"In total, the defendants raised approximately $75 million in connection with the projects, none of which ever came to fruition or produced any meaningful returns to investors,'' according to the statement of claim.
The lawsuit claims that the defendants were "using funds from one investor to make interest, dividend or other interim payments to earlier investors in the nature of a Ponzi or pyramid scheme.''
Lofgren said in an interview Wednesday she hopes that more investors will join the class-action lawsuit. "There are reports that there's upwards of 3,000 investors. So far I've managed to reach 238 (investors), representing $10.7 million in investments.''
Lofgren said the 154 investors who have joined the class action have invested $8.1 million in Shire International and related companies, including three Saskatchewan investors owed a total of $155,000.
Lofgren said she and her husband invested more than $75,000 in Shire International in 2006, including $25,000 in a Fort McMurray land development project and $50,000 US into a Hawaii development project.
But, over the three years, Lofgren said she never received anything from Shire, except excuses, promises and requests for more money.
Mark Dickey of the ASC said the commission is continuing to investigate Shire. "We've extended the cease trade order while the investigation continues. Then the hearing (date) will be set.''
When contacted Wednesday, Shire International replied with a prepared statement in response to the cease trade order extension by the SFSC.
"Shire International Real Estate Investments Ltd., its entities and company president Cleone Couch are deeply concerned about the Saskatchewan Financial Services Commission actions and the impact on our company, staff, investors and business partners.
"We respect the commission's process and are co-operating fully with commission staff. We will be provided the opportunity to respond to the allegations and present our defence.''
REGINA — A Calgary investment company, which has been ordered to cease trading in Saskatchewan and Alberta, is now the target of a $75-million class action lawsuit.
A cease trading order issued June 23 against Shire International Real Estate Investments Ltd., Jeanette Cleone Couch and a number of related companies and individuals, was extended Tuesday by the Saskatchewan Financial Services Commission.
The Alberta Securities Commission, which extended its interim cease trading order last month, is investigating Shire for alleged fraud and misuse of investor funds.
And earlier this week in Court of Queen's Bench in Calgary, a class-action lawsuit against Shire was launched by two Alberta investors, Lucia de Wet and Jennifer Lofgren.
The lawsuit alleges that the Shire, Couch and related companies and individuals raised millions of dollars from investors in Canada from 2005 to 2009 for 10 "purported real estate development projects, none of which was genuine or as represented.''
"In total, the defendants raised approximately $75 million in connection with the projects, none of which ever came to fruition or produced any meaningful returns to investors,'' according to the statement of claim.
The lawsuit claims that the defendants were "using funds from one investor to make interest, dividend or other interim payments to earlier investors in the nature of a Ponzi or pyramid scheme.''
Lofgren said in an interview Wednesday she hopes that more investors will join the class-action lawsuit. "There are reports that there's upwards of 3,000 investors. So far I've managed to reach 238 (investors), representing $10.7 million in investments.''
Lofgren said the 154 investors who have joined the class action have invested $8.1 million in Shire International and related companies, including three Saskatchewan investors owed a total of $155,000.
Lofgren said she and her husband invested more than $75,000 in Shire International in 2006, including $25,000 in a Fort McMurray land development project and $50,000 US into a Hawaii development project.
But, over the three years, Lofgren said she never received anything from Shire, except excuses, promises and requests for more money.
Mark Dickey of the ASC said the commission is continuing to investigate Shire. "We've extended the cease trade order while the investigation continues. Then the hearing (date) will be set.''
When contacted Wednesday, Shire International replied with a prepared statement in response to the cease trade order extension by the SFSC.
"Shire International Real Estate Investments Ltd., its entities and company president Cleone Couch are deeply concerned about the Saskatchewan Financial Services Commission actions and the impact on our company, staff, investors and business partners.
"We respect the commission's process and are co-operating fully with commission staff. We will be provided the opportunity to respond to the allegations and present our defence.''
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