Insurance agents obstructed justice by coaching investor to lie to regulators, BCSC panel finds

A British Columbia Securities Commission (BCSC) panel has found that a Burnaby insurance agent and his marketing director obstructed justice when they coached an investor to lie to regulators in order to get his money back.

The panel has made the ruling against FS Financial Strategies Inc. (FS) marketing director Jing “Janet” Zhang and her colleague Hunter Wei-Shun Wang (aka Hunter Wei Shun Wang)[1]

In 2014, Zhang introduced a BC man to an investment at FS and Wang assisted Zhang in the process of documenting the investment. The investor initially put in $25,000 on the premise that he would be guaranteed a 10% return for three years, risk free.

However, he asked for his money back a few days later, saying he regretted making the investment. While waiting for a response, the investor’s mother complained to the BCSC about the investment.

Zhang said that the “the refund would depend on how the investor and his mother handled the matter with the [BCSC].”

Wang and Zhang then coached the investor to lie to a BCSC investigator by telling the investigator that the concerns that prompted the complaint had been resolved. The coaching included role-playing where Wang pretended to be the investigator taking the investor’s call.

After rehearsing the call repeatedly, Wang and Zhang listened in while the investor called the investigator and read the script with the false story.

The panel found that “this fabrication was clearly an attempt to cause the investigator to stop pursuing investigation of the complaint.”

After the call, the investor and his mother went with Zhang to her personal bank, where she withdrew $25,000 and gave it to the investor. A few weeks later, FS reimbursed Zhang for that payment.

As a result of their conduct, the panel found that both Wang and Zhang concealed or withheld, or attempted to conceal or withhold, information reasonably required for an investigation under the Securities Act.

The panel will impose sanctions after considering submissions from BCSC staff and the respondents.

A BCSC panel earlier this year ordered FS Financial Strategies and six other companies in B.C., Alberta and Ontario to pay a total of $32.8 million for making misrepresentations to hundreds of investors, illegally selling securities and unregistered trading[2]

The panel ordered the companies’ founders – Aik Guan “Frankie” Lim and Scott Thomas Low – to pay $2 million each, and forever banned them from BC’s investment markets. In addition, the panel ordered the companies’ former general manager, Darrell Wayne Wiebe, to pay $75,000 and banned him from BC’s investment markets for at least 10 years.

Photo credit: Chris Potter

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