Man Behind C-FAX Infomercial Guilty of Massive Fraud

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By Rumina Daya and Yuliya Talmazan  Global News(BC)

  • David Michael Michaels
David Michael Michaels

A Vancouver Island man has been found guilty by the British Columbia Securities Commission of perpetrating a massive fraud, affecting hundreds of British Columbians, many of them seniors.

The Commission panel has found that David Michael Michaels advised 484 clients to purchase over $65 million of exempt market securities.

Exempt market securities are securities sold under exemptions from prospectus requirements.

Michaels was allegedly paid $5.8 million in fees and commissions for his sales.

The panel also found that Michaels advised his clients to sell their stocks, bonds and mutual funds and purchase high-risk exempt market securities instead.

He also advised his clients to borrow against their homes.

The panel found that in giving this advice, Michaels made misrepresentations to his clients, deceived them and betrayed their trust.

The Commission panel says Michaels acted as an adviser without being registered.

He is a former mutual fund salesperson.

It is alleged that Michaels illegally advised his clients between June 2007 and December 2010.

Teresa Mitchell-Banks, the Director of Enforcement with BC Securities Commission, calls it a significant case and says what Michaels did was ‘despicable’ because he knew the risk.

“Mr. Michaels deliberately targeted senior clients. He said that the average age of his clients was 72,” says Mitchell-Banks. “This is a retired population. We consider them to be vulnerable. He put them in high-risk securities after persuading them that their traditional investments were unsafe.”

Michaels also held weekly infomercials on CFAX 1070 radio in Victoria.

The panel says Michaels testified that he used the C-FAX program to draw the public to investment seminars that he hosted in Victoria and Vancouver.

It is alleged the C-FAX programs drew 20,000 listeners a week.

Michaels claimed in the hearings that his clients were fully aware of what they were getting themselves into.

READ THE REST OF THE STORY  HERE  AT THE GLOBAL NEWS WEBSITE.

Vancouver Island man found guilty of committing $65 million fraud

 

4 COMMENTS

  1. In the ever-growing world of radio infomercials, have we seen this many times before? Only other example I can think of is Kevin Trudeau and his “Mega-Memory” program, although that was a whole other story.

  2. What’s really disgusting about this is that the average age of the fraud victims is 72. This guy was scamming elderly people out of their retirement money.

  3. I see a hot sandy location with four stakes driven into the ground, a container of honey and a terrarium full of fire ants.

  4. Isn’t this the second time a CFAX informercial host has been sanctioned by regulators for allegedly ripping off listeners who responded to the shill? And then there was Kamloops newsletter writer Al Budai who remained a regular with Terry Spence even after authorities started investigating his dealings. CFAX and Budai ultimately parted ways, but the station should really forego making coin off of financial infomercials. And, to prevent future Budai fiascoes, they should rigorously check open-line guests for conflicts of interest etc.

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