In a settlement agreement with the British Columbia Securities Commission, Sean Tan and Berkeley Coffee & Tea have admitted to illegally distributing securities in B.C.
On April 1, 2011, Berkeley distributed shares to 59 investors, raising a total of CAD $484,590. Of the investors, 44 were from B.C., 11 from Alberta, two from Hong Kong and one from the United States.
Investors were provided with a copy of a prospectus Berkeley had previously filed with the U.S. Securities and Exchange Commission. It didn’t meet either the prospectus or offering memorandum requirements of B.C.’s securities legislation, however.
On May 6, 2011, Berkeley filed an exempt distribution report with the BCSC, claiming the securities had been sold under the family, friends and close business associates exemption. Most of the investors didn’t qualify for the exemption.
Tan—CEO, president and sole director of Berkeley at the time of the distributions—agreed he was responsible for Berkeley’s contraventions of the Securities Act. He has agreed to pay $10,000 to the commission.
Tan is also prohibited from acting as a director or officer of any issuer, and from engaging in investor relations’ activities until the later of three years from the date of the order.
He successfully completed a directors and officers course that’s satisfactory to BCSC staff, though. He may remain a director and officer of Berkeley and its wholly owned subsidiary, DTS8 Holdings Co., Ltd., and may engage in investor relations in respect of the same.
Berkeley must carry out any future capital raising activities through an exempt market dealer or registrant.
Berkeley and Tan cooperated fully with commission staff, and neither party has a prior regulatory history with the commission.