Court grants leave to appeal BCSC ruling in pump-and-dump case

A British Columbia court has granted leave to appeal enforcement decisions by the British Columbia Securities Commission (BCSC) on the question of whether the regulator has jurisdiction over the respondents in the case.


The Court of Appeal for B.C. ruled that several respondents in a BCSC enforcement action should be allowed to challenge the regulator’s findings against them in court.

Earlier this year, the BCSC ordered $17.4 million in penalties and disgorgement against EHT Corporate Services S.A., a firm based in Switzerland; one of EHT’s former managing directors, David Craven; and two Vancouver residents, Raffi Khorchidian and Garo Aram Deyrmenjian. The BCSC had found  they were involved in a purported pump-and-dump scheme.


The respondents in that case were granted leave to appeal the BCSC’s rulings that they violated B.C. securities law.


The decision doesn’t mean that the appeal will be upheld, just that the court has a question of law to consider.


In particular, the court said the issue of whether the BCSC has jurisdiction over the case needs to be addressed. The court also granted leave to Khorchidian and Deyrmenjian on the question of whether the regulator’s findings against them “were impermissibly based on conjecture or speculation.”


The jurisdiction issue was raised during the BCSC hearing, but the commission rejected the argument.


“[The BCSC] concluded that their conduct had a real and substantial connection to British Columbia and that it had jurisdiction to make orders in the public interest,” the court noted.


The court declined to grant leave to appeal the sanctions handed down by the BCSC, saying that it’s unlikely that a court would interfere unless the respondents are successful in appealing the finding that they violated securities laws.

If the appeal succeeds, the sanctions should be set aside, the court ruled.

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