VANCOUVER (miningweekly.com) – The Alberta Securities Commission (ASC) has found that junior Coastal Pacific Mining illegally manipulated the market for its securities and engaged in conduct contrary to the public interest, the securities regulator has found.
The commission has determined that while Coastal's stock traded on the US over-the-counter market, it was implementing a campaign in 2010 comprising near-daily news releases, in conjunction with a concurrent promotional email campaign that artificially stimulated investor interest in, and demand for, Coastal shares.
An ASC panel noted in its decision Wednesday that the previously modest level of trading activity for Coastal shares "reached remarkable levels" during the promotional campaign, with trading volumes and prices crashing "to almost nothing" following the campaign.
The panel found that the capital market, including more than 12 000 unsuspecting investors who bought Coastal shares during the campaign, were misinformed and misled as to the merits of Coastal as a business enterprise. In its decision, the panel stated: "This was a blatant market manipulation… it was obviously incompatible with a fair and efficient capital market, and dangerous for investors."
The ASC will convene an in-person hearing this month to determine what, if any, orders ought to be made because of Coastal's misconduct.
In May 2011, the ASC issued orders freezing certain assets, some of which were related to Coastal's activities. In August 2013, the ASC also issued a ‘cease trade order’ against Coastal, which remains in effect.
According to the latest Coastal public documents, posted in 2013, the company declared no significant source of operating cash flow and no revenues from operations. None of the Coastal’s mineral properties have current reserves.
The company holds the Santa Rita mining concessions, in Peru, and the Hot Stone property, in Ontario.