Richard Gozdek

White Rock man sentenced for violating B.C. Securities Act

Richard Gozdek charged in 2018 after failing to comply with 2013 order

A former Abbotsford resident now living in White Rock has been ordered to pay a total of $15,000 after breaching an order of the B.C. Securities Commission.

Richard Gozdek, 56, was sentenced Dec. 23 in Abbotsford Provincial Court. The $15,000 penalty includes $10,000 in restitution and a $5,000 fine. He also received one year of probation.

Gozdek previously pleaded guilty to one count of contravening the B.C. Securities Act, while two other counts were stayed.

Gozdek was charged in December 2018 for failing to comply in 2015 with a BC Securities Commission (BCSC) order by trading in securities, acting in a consultative capacity in the securities market and engaging in investor-relations activities.

READ MORE: White Rock man charged with breaching Securities Commission order

In a settlement agreement in 2013, Gozdek agreed to pay approximately $65,000 to the BCSC and was banned for five years from activities such as trading securities, engaging in investor relations and acting as a consultant in the securities market.

At that time, Gozdek admitted that he illegally sold securities in Armadillo – a Nevada corporation that claimed to own an oil lease in Oklahoma, according to a BCSC press release at the time.

The agency said that Gozdek had never been registered to sell securities in B.C., and Armadillo had never filed a prospectus, offering memorandum or exempt distribution report in B.C.

Between December 2010 and April 2011, Armadillo sold partnership agreements to at least 26 investors in B.C. for proceeds of almost $869,000, according to the BCSC.

The agency stated that Gozdek directly solicited people to invest in the partnership agreements, raising almost $551,000 from B.C. residents.

Gozdek, through his company Sterling Financial Group, was paid a fee of just over $40,000 for the sale of the partnership agreements.

Each month, Armadillo would extract and sell the amount of oil an investor purchased to a refinery on the investor’s behalf.

According to the investor’s preference, the net proceeds would either then be used to acquire title to an additional quantity of oil, or would be forwarded to the investor in the form of a production payment.

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