The former CEO and CFO of Vancouver-based blockchain investment firm Blok Technologies have been suspended from participating in the investment market, according to the British Columbia Securities Commission (BCSC).
Per the BCSC, ex-Blok CEO Robert Earle Dawson and ex-Blok CFO David Malcolm Alexander have separately agreed to suspensions over how a past Blok share sale was communicated to the public.
Per the BCSC, Blok failed to disclose that it would only retain less than 18 percent of the $5.4 million amount it announced because it “had already spent or owed $4.5 million on consulting fees.”
A June 2018 press release from Blok, which traded on the Canadian Securities Exchange at the time, announced that the company had secured an approximately $5.4 million private placement. In that release, Blok said the net proceeds would be used for advancing Blok’s blockchain investment projects.
But according to the BCSC, what Blok failed to disclose was that it would only retain about $950,000—less than 18 percent of that amount. Per the regulator, this was because Blok “had already spent or owed $4.5 million on consulting fees.”
The BCSC has determined that Dawson and Alexander both “authorized, permitted or acquiesced in the issuance” of that June 2018 release. “Alexander knew, and Dawson knew or ought to have known, that [Blok] had already spent or owed the consulting fees at the time of the news release,” stated the BCSC. “As a result, both of them committed the same misrepresentation as the company.”
These settlements require Alexander and Dawson to resign any director or officer positions they hold at a public market issuer or registrant and temporarily bar both from acting in such a role or advising or consulting in connection with the securities or derivatives market. Alexander has been prohibited from doing the above for three years, while Dawson has been barred for 14 years.
Alexander has also been required to pay $25,000 to the BCSC. Meanwhile, the BCSC noted that Dawson “isn’t able to pay a financial sanction that would normally be part of a settlement.”
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Blok has previously described itself as “a public company that invests in and develops companies in the blockchain and emerging technology sectors.” The firm has claimed to provide capital, tech, and management expertise to other early-stage companies in the sector, including Sierra Blockchain.
According to company announcements, Dawson resigned from Blok in January 2019, while Alexander resigned in December 2018. No reasons were given for their departures at the time. Blok was delisted in October 2020 and is now in the process of being dissolved.
Feature image courtesy Blok Technologies.