A B.C. judge has denied the U.S. Securities and Exchange Commission’s request to have a Delta man found liable for stock fraud account for the $3.3-million September 2022 sale of his small, detached home in Vancouver’s Kitsilano neighbourhood.
The commission had opposed Jackson Friesen’s application in B.C. Supreme Court to unfreeze assets in order to pay his legal fees for an appeal of the nearly US$12-million repayment order levied against him in a U.S. federal court last July.
Justice Amy Francis ultimately decided to allow Friesen to tap those unfrozen assets to pay for those legal costs — estimated to be about $125,000 — despite the commission's concerns about where the property sale proceeds went.
Friesen’s legal matters commenced in September 2021 when the commission filed a civil complaint against him and seven other B.C. residents, alleging they played a role in a complex fraud scheme involving over 100 public companies and $1 billion of traded shares.
Friesen’s trading accounts in B.C. were immediately frozen by the B.C. Securities Commission.
In August 2022, the SEC (the commission) filed for a Mareva injunction in B.C. to freeze Friesen’s assets.
The injunction was granted by Francis in March 2023, after the sale of the Kitsilano home, which the commission says contravened the Mareva injunction application.
In October 2023, Friesen was found to have committed fraud and ordered to repay investors US$11.8 million and the commission a US$1.56-million civil penalty.
Since then Friesen and the commission have jostled as to what assets can and have been disclosed until last April when Francis finalized the terms of the injunction order, based on a list of disclosed assets that were made in camera. (The asset list was sealed by Francis, with consent from the commission, in order to protect the constitutional rights of some of Friesen’s co-defendants who face criminal prosecution related to the alleged scheme.)
In September, Friesen launched an appeal of the repayment order and penalty before the U.S. District Court for the District of Massachusetts.
The commission took the position any funds unfrozen should only go toward existing legal fees, not the costs to appeal.
“The application was primarily argued on the broader question of Mr. Friesen’s financial disclosure to date and whether he has demonstrated that he has no other sources, beyond frozen assets, from which to pay his reasonable expenses,” wrote Francis in the decision.
Friesen argued via lawyer Maranda Fritz that the commission was attempting to expand the scope of disclosure for a Mareva injunction beyond what is required under law.
Francis noted Friesen only had to show the expenses could not be funded from assets not frozen by the injunction.
“The court must be cautious about imposing additional evidentiary requirements that would serve as impediments to a defendant accessing their own funds to pay reasonable living expenses or legal fees while under the burden of a Mareva injunction,” wrote Francis, adding that she had carefully reviewed Friesen’s sworn asset list and was “satisfied that he has no assets available to pay expenses other than those frozen by the injunction.”
Friesen actually owes US$4.1 million less than the commission sought last January, after a judge removed the commission’s request for him to pay prejudgement interest on the ill-gotten gains.
The commission listed Friesen as a resident of Delta in its complaint.
Friesen had several accounts at PI Financial and Bank of Montreal frozen, including those associated to his companies Ardent Strategies Corp., Ferrous Capital Corp., First Avenue Corp., MGF Strategies Corp., Valley Drive Estates Inc., Boundary Bay Strategies Corp. and Westside Partners Inc.
Land title records show Boundary Bay Strategies Corp. owns one property on the Agricultural Land Reserve at 300 Copesfield Dr. in Delta, assessed at $369,901 with the most recent sale occurring on Feb. 20, 2021, for $4.425 million.
