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.''

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Concrete Equities Executive Club Inc. settlement

ctvcalgary.ca

An investment firm in Calgary, Concrete Equities Executive Club Inc., has agreed to refund some of its customers. The company could pay up to $1.6 million.

This settlement was made Tuesday. It came about as a result of an Alberta Securities Commission investigation.

The Commission was investigating whether Concrete Equities Executive Club Inc. which shares directors and a downtown Calgary office with Concrete Equities broke the law when it sold shares to certain investors.

18 Alberta investors bought $1,620,000 in Concrete Equities Executive Club Inc. shares.

That money was then put into a real estate investment fund and investors were promised a 20 per cent return on that money within one year.

Concrete Equities Executive Club Inc. admitted that it illegally sold 13 of the 18 investors the shares.

What made the sale illegal was that the company did it without a prospectus and without being registered to trade in the shares.

Tuesday the company agreed to refund all the money paid by the 13 investors, to offer refunds to the other five investors to whom it legally sold the shares, and to pay an additional $82-thousand to the Securities Commission.

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