B.C. man, company misled investors, obstructed justice, says $30K settlement agreement

The B.C. Securities Commission logo in an undated file photo.

A Mission, B.C., man and his company have agreed to pay $30,000 to a provincial regulator and be banned from financial markets for an extended period of time.

Colin Frederick Eggen and Novum AI agreed to the sanctions in a settlement with the B.C. Securities Commission this week. The settlement agreement was published online Thursday.

According to the document, Eggen was the sole director of Novum, which claimed on its website that it used “algorithmic trading” to invest in currency exchange, gold and cryptocurrency markets, generating annual returns of up to 150 per cent.

The company’s website also claimed that its technology was developed by more than 60 “scientists, researchers and financial analysts with a proven track record of growing wealth” and had a fund size of $50 million.

In fact, the technology was not developed in the manner described, according to the settlement. The company’s fund was worth approximately $500,000, not $50 million, and it had never generated returns in the 60 to 150 per cent range, as claimed.

Between September 2022 and June 2023, Novum entered investment contracts with 12 people, who invested a total of roughly $480,000. The settlement agreement notes that these contracts were “securities,” and the company was not registered to trade securities.

“The investors lost all of their money,” the settlement reads.

In the agreement, Eggen admits that Novum’s statements about its technology, assets and returns were “false or misleading,” and that as the company’s director he “authorized, permitted or acquiesced” to the company’s statements and its unregistered trading.

Eggen also admits that he obstructed justice by deleting text messages from his phone after BCSC investigators contacted him about the allegations against Novum.

The settlement agreement indicates Eggen initially told investigators he had recently replaced his phone and no longer had access to his old text messages. However, he later admitted under oath that he had deleted the texts.

As discipline for these violations of securities law, Eggen agreed to pay the regulator $30,000 and be banned from most investment market activities for a period of 25 years.

Novum agreed to be banned from the market permanently.

According to the settlement agreement, the BCSC would have sought a larger financial award if it thought Eggen could afford to pay.

“Eggen has demonstrated he is unable to pay more than $30,000 to settle this matter,” the document reads.

“Otherwise, the executive director would require an undertaking from Eggen to pay $100,000.”