B.C.-based call centre allegedly involved in illegal scheme

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The New Brunswick securities regulator joined its counterpart in British Columbia in issuing a cease-trade order yesterday against two investment firms and their top executive that are allegedly operating an illegal telemarketing scheme.

The collaboration is part of the passport securities regulation system that allows regulators to share notes and harmonize their enforcement efforts across the country.

Vancouver-based Adcapital Industries Inc., AD Capital U.S. Inc., based in Nevada, and president Adis Golic have allegedly approached individuals to invest in a muffler technology that reduces automobile emissions.

The parties allegedly operated a telemarketing call centre in Burnaby, B.C., without a licence and made false representations to prospective investors, said Rock Hancox, executive director of the New Brunswick Securities Commission.

"They are alleged to be involved with an illegal distribution of securities," said Hancox. "The nature of how it's being promoted is highly suspicious and they are making improper representations," he said, adding the companies have allegedly told people they can accept investments from investors who were not properly credited.

A New Brunswick resident received a suspicious phone call from an Adcapital Industries Inc. and reported it to the commission. Regulator officials later confirmed the company was the subject of a cease trade order from the British Columbia Securities Commission.

Under the so-called passport system, adopted by all Canadian regulators except Ontario, securities commissions may replicate cease trade orders issued by their counterparts without investigation.

The order issued Wednesday was the New Brunswick regulator's second under the passport system.