In 2007????? It takes them 5 years to put the squish on these guys?  What the he??
 
great enforcement
 
Clever title Stockhouse, LOL. I'm posting this because it serves to remind you of the realities in venture stocks. There is a fine line between fact and fiction that executives dance on. They are allowed to make forward looking statements and craft releases to imply whatever they like... to massage your imagination. Some step over the line a little too far.
 
Stockhouse Short Report:
B.C. regulator sanctions Bulletin Board junior and two senior executives:
Peter Flueck and Zafer Sungur were fined $100,000 and banned from trading for 5 years for making misrepresentations in company news releases.
December 7, 2012
 
Dear Stockhouse Member,
   
A British Columbia Securities Commission panel this week sanctioned U.S. OTC Bulletin board quoted Brookmont Explorations Inc. (OTO: BMXI, Stock Forum) and two of its senior executives for contravening securities laws.
In July 2102, a commission panel found that Brookmount, its Chairman and President Peter Flueck, and chief operating officer Zafer Sungur made misrepresentations relating to the company’s  flagship Mercedes 100 property in Peru  in news releases issued between February 2005 and June 2007.
In doing so, the company also contravened National Instrument 43-101, the national standard for mining disclosure.
Between December 2004 and June 2007, Brookmount traded on the OTCBB at an average price of US$0.29 with an average daily volume of 41,500 shares.
However, from December 1, 2005 to January 11, 2006, its share price “increased from US$0.19 to an all-time high of US$1.075 with an average daily volume of 174,000 shares”.
This week, the stock was quoted at under $0.01, a level that leaves the company with a market value of $371,950, based on 41.3 million shares outstanding.  OTC Markets in the U.S. has placed a warning on the junior's stock page, stating that the company may not be making material information publicly available.
The news release falsely stated the value of Brookmount’s Mercedes property by claiming that it had mineral reserves when in fact it had none, contrary to both geological reports Brookmount had received, and what Brookmount had reported in its filings with the U.S. Securities and Exchange Commission.
In its decision document, the commission went on to say that Flueck deliberately exaggerated the prospects of that property by cherry-picking favourable statements from the reports available to him.
He also failed to disclose qualifying information that would have shown his statements to be quite simply false. On top of that, he included information that was simply made up.
The commission went on to add that Sungur’s misconduct in this regard was also serious. “He reviewed the news releases and told Flueck when he disagreed with their content. In the case of the false news releases that led to our findings, he knew they were a blatant contradiction of Brookmount’s SEC filings, but approved them anyway,” the panel said.
Additionally, the panel found that Flueck and Sungur breached a BCSC cease trade order when they sold Brookmount securities in July and August of 2007.
In its sanctions decision, the panel stated that Flueck and Sungur “are not people who belong in the public markets until they have had an opportunity to reflect on their misconduct and to educate themselves on the responsibilities of directors and officers of public companies.’’
For his misconduct, Sungur is banned from trading or purchasing securities of any issuer with whom he is in a special relationship, and from acting as a director or officer of any issuer.
He is also prohibited from becoming or acting as a promoter, from engaging in investor relations activities, and from acting in a management or consultative capacity in connection with the securities market.
 
The panel ordered Sungur to pay a $45,000 fine. All prohibitions will remain in place until the later of five years or such time as the fine is paid.
Additionally, Sungur’s ban on becoming or acting as a director or officer will remain in place until the later of five years, the date he successfully completes the Simon Fraser University course Public Companies; Financing, Governance and Compliance, or such time as the fine is paid.
 
Flueck is banned from trading or purchasing securities of any issuer with whom he is a person in a special relationship, and from acting as a director or officer of any issuer (except that he may act as a director an officer of Brookmount until May 29, 2013 for the sole purpose of selling or winding up the company).
He is also prohibited from becoming or acting as a promoter, from engaging in investor relations activities, and from acting in a management or consultative capacity in connection with the securities market.
 
Flueck was ordered to pay a $65,000 fine. All prohibitions will remain in place until the later of eight years or such time as the fine is paid. Additionally, Flueck’s ban on becoming or acting as a director or officer will remain in place until the later of eight years, the date he successfully completes the Simon Fraser University course Public Companies; Financing, Governance and Compliance, or such time as the fine is paid.
 
The panel also made a permanent cease trade order relating to Brookmount, replacing a cease trade order from June 2007.
ABOUT THE AUTHOR
Peter Kennedy is a Stockhouse reporter and web content editor.