A Langley man is one of three company directors who is facing an upcoming hearing before the B.C. Securities Commission over alleged misconduct under the Securities Act.
Glenn Albert Little of Langley is a former director of G2 Energy Corp., formerly known as Green 2 Blue Energy. Little, Slawomir Smulewicz and Michael Louis Young were all directors or officers of G2 Energy in 2018, when it allegedly issued two news releases that “contained misrepresentations.”
“In the first news release, Green 2 Blue announced a financing but did not disclose its intention to spend most of the funds on consultants,” according to a filing by the BCSC. “In the second, Green 2 Blue announced the amount raised in the financing but did not disclose that it spent most of the funds on consultants.”
Back in 2018, Green 2 Blue was focused on wood pellet production and biomass gasification technology.
On April 17, Green 2 Blue announced it had closed a private placement sale of stock for a total of $4.28 million. The money was to be used to complete facility upgrades, buy equipment, and use as working capital.
However, almost all the money was actually spent on consulting fees. A total of $3,723,660 was spent on consultants immediately, leaving the company with just 13 per cent of the funds it had just raised from the sale of equity.
It kept only $556,340 of the proceeds, which the BCSC says “was a misrepresentation.”
Smulewicz, Young, and Little, as directors and officers of Green 2 Blue, “authorized, permitted, or acquiesced” in the contravention of the Securities Act, the BCSC filing says.
The three men, or their lawyers, have been ordered to a Feb. 7 hearing before the commission, where they can make submissions and give evidence.
The action against G2 Energy is part of a wider investigation by BCSC that centers around the BridgeMark group, a consulting firm and various associated companies that the securities regulator has alleged took part in a scheme involving fake consultation services for stock.
READ MORE: B.C. securities regulator probes most expansive alleged trading scheme in its history
In each case, a small but publicly-traded company sold a significant amount of stock to BridgeMark or an affiliated company or individual.
They then turned around and returned most of the money in the form of “consulting fees,” while the BCSC alleges “little or no consulting services had been or were intended to be performed.” The regulator has called it a “cash swap.”
The stock buyers could then sell the stock on the open market, making a profit even as they sold the stock at a loss, since they had already recouped most of their costs via the consulting fees.
Meanwhile, the people buying the stocks had no idea that the recent “investments” had been largely spent and would not be going back to building up the company.
Most of the companies involved were linked to mining and energy, cryptocurrency or blockchain technology, or cannabis startups.
Little does not appear to be a director of G2 Energy, according to the company website, nor does Young. A Slawek Smulewicz is the CEO and a director. The company is now focused on oil and gas extraction in Texas, although its offices are in Vancouver.
The Langley Advance Times has reached out to the company for a comment.
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