ASC issues warning on accredited investor exemption

Date: Thursday, November 4, 2004

Oxford Investments slapped with cease trade order for alleged misuse of exemption-By James Langton: IE- The Alberta Securities Commission is warning investors about the proper use of the accredited investor exemption and unsolicited investments. The warning comes as the ASC reports it has issued a cease trading order against Oxford Investments Holdings Inc., an Ontario-based tanning-booth and bottled water distributor, and several of its employees. The interim order is in effect for 15 days unless it’s extended by the commission. A hearing to consider an extension is scheduled for November 12. The ASC reports that there’s evidence indicating that common shares of Oxford were offered to at least three individuals through the “Accredited Investor Exemption”. However, it alleges that none of the three individuals qualified for this exemption. These allegations have not yet been proven. To qualify as an accredited investor, an individual must have more than $1 million in financial assets, after liabilities, the ASC explains. This can include cash and securities, but not the value of a residence. Alternatively, the investor must have personal annual income over $200,000 or total annual income (combined with a spouse’s) of over $300,000 for at least two years. It also warns investors to: be wary of unsolicited offers received over the internet or telephone; check the registration and background of the person or company offering any investment; and, to never sign documents without reading them, or that do not accurately reflect their financial situation.