A former Burnaby woman has agreed to pay $40,000 and is banned from trading in B.C.'s investment market for 10 years after her company ran afoul of the province's securities laws.
Qian (Eve) Zhang was a director and the CEO of a company that represented itself as a financial technology, or "fintech," firm focused on developing proprietary trading software for portfolio managers, according to a BC Securities Commission news release this week.
Between 2018 and 2022, the company sold about $1.5 million in securities to 10 investors without a prospectus, a formal document providing details of an investment, according to the commission.
Without a prospectus – or an exemption from the prospectus requirement – the company's distribution of securities was illegal, the commission said.
"Zhang, as CEO and a director, authorized, permitted or acquiesced in those illegal distributions," stated the release.
The company also raised nearly $30 million from investors between 2017 and 2022 by distributing its own preferred shares, common shares and bonds, and deposited most of the funds in its trading accounts and used them to trade securities, according to the release.
But that trading was also illegal since the company was not registered under B.C.'s Securities Act to trade in securities, the commission said.
"As the CEO and a director, Zhang authorized, permitted or acquiesced in this unregistered trading," stated the release.
10-year trading ban, $40,000 payment
Zhang became a director when the company was incorporated in 2017 and CEO in 2020, according to the commission.
Although she continues to hold the title of CEO, she has not performed the duties of that office since resigning as director in 2023, the release said.
Zhang, who has no history of securities misconduct, provided "exemplary" cooperation with the commission's investigation, according to the release.
To settle the case, she has agreed to pay $40,000.
Under the settlement, Zhang has also been ordered to resign from "any position as a director or officer of an issuer or registrant" and is banned for 10 years from engaging in or promoting securities trading in B.C.
Company not named
The commission did not name Zhang's company in the news release, but BCSC filings posted online list her as a director and executive officer of Elixir Financial Inc. (formerly called Elixir Income Inc.).
The company was founded in Burnaby in July 2017, according to the documents.
In 2019, Elixir won a Governance Professionals of Canada (GPC) award for Best Practices in Strategic Planning, Oversight and Value Creation by the Board.
In nomination materials for the award, Zhang described the firm as a fintech company that "creates customizable trading software to automate portfolio managers' trading activities."
In the document, Zhang explained how the company used its own software to trade in the currency, commodity and government bonds markets, saying the trading income supported its debt obligations and operating costs.
"The best way to prove that our software is a worthy investment for traders and institutions is to use it ourselves," Zhang wrote.
The commission would not confirm Elixir was the company involved in the settlement agreement.
Public affairs manager Brian Kladko told the Burnaby NOW the B.C. Securities Act requires the commission to keep information confidential unless its "public duty" requires it to disclose details, such as in a settlement agreement.
Zhang did not respond to calls from the NOW.
Follow Cornelia Naylor on X/Twitter @CorNaylor
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