June 15, 2024

In a fraudulent scheme, investors suffered a loss of roughly CAD 150,000 each.

Investors experienced a significant loss averaging CAD 150,000 each, due to a deceptive venture.

Craig Michael Thompson, a resident of Calgary, along with two organisations he operated – Black Box Management and Invader Management, stand accused by the Alberta Securities Commission (ASC) of executing a colossal investment scam. The accusations outlined in a Notice of Hearings issued on 5th April, assert that Thompson fraudulently acquired approximately CAD 150 million from around 1,000 investors between March 2020 and September 2023, subsequently deceiving investors and misusing funds. As a consequence, Thompson and the implicated companies seemingly violated sections 198, 199 and 202 of the Securities Act (2000) of Alberta (The Act).

As per the ASC, Thompson portrayed himself as a thriving investment manager, promising investors lucrative returns. The Notice of Hearing underlines that Thompson sidestepped required registration under Alberta securities laws and did not disclose the apparent fraudulent nature of his investment plot. The Notice of Hearing articulates that Thompson regularly dispensed written reports displaying consistent positive returns. However, the claimed returns and account balances in these reports were in fact fraudulent.

It is further inferred that Thompson’s operation mirrored a Ponzi-like structure, where new investor money was used to payout promised returns to original investors. Ponzi schemes, first unmasked nearly a century ago by Charles Ponzi, are both highly illegal and unsustainable. Nevertheless, such scheming continues opprobriously. The Notice of Hearing suggests that Thompson “ran out of sufficient funds” to upkeep his Ponzi-like scheme and subsequently informed his customers of a massive financial loss. The Notice clearly states that Thompson knowingly risked investors’ money and jeopardised their financial interests.

Acknowledging that Thompson orchestrated a Ponzi-like fraud, the Notice also alleges a breach of the clause “section 75(1)(a) and/or (c) of the Act by acting as a dealer and/or investment fund manager without being registered in accordance with Alberta securities laws.”

AFTERMATH AND SUBSEQUENT ACTIONS

These allegations have led to a significant number of investors facing economic difficulties. The ASC calculates that approximately 1,000 people have invested in Thompson’s scam, with an average sum of CAD 150,000.

In October 2023, foreseeing the formal charges, the ASC imposed an Interim Order against Thompson, Black Box Management and Invader Management. This order prohibits engagement in any security or derivative trades, exemptions within Alberta securities laws, investor-relations activities, securities or derivative advice, or acting as an investment fund manager. Although no date for a hearing to establish Thompson’s and the companies’ guilt has been confirmed, a preliminary hearing is set for the following month when the formal proceedings will be scheduled.