A U.S. federal judge has stayed securities fraud proceedings against David Sidoo, a Vancouver businessman and former BC Lion.
Sidoo had been scheduled to respond to several civil charges brought forth by the U.S. Securities and Exchange Commission (SEC) by Nov. 11; however, a stay — considered to be temporary — was ordered on Oct. 11 by Judge Hon. Ronnie Adams of the U.S. Southern District of New York.
The stay was sought by the U.S. Attorney’s Office, which is proceeding with a criminal trial against four of Sidoo’s seven co-defendants. The criminal charges against the four co-defendants relate to the SEC proceedings.
“If this case were to proceed, there would be a risk of significant interference with the criminal case,” since “even a cursory examination of the indictment and the SEC complaint makes clear that the alleged wrongdoing is essentially the same,” wrote U.S. Attorney Damian Williams.
“A complete stay would prejudice no party to this civil action; would prevent the circumvention of important statutory limitations on criminal discovery and avoid asymmetrical discovery,” argued Williams in his successful application.
The SEC did not oppose the stay, nor did Sidoo and the other defendants.
The stay of proceedings will last until the completion of the criminal trial. During this time, the SEC will still be pursuing service against two co-defendants. It’s unclear how the outcome of the trial may impact the case against Sidoo if or when it is reopened. No trial date has been set.
On April 14, the SEC issued a civil complaint in the Southern District of New York against Sidoo and seven other men for allegedly orchestrating a complex, international stock manipulation scheme that generated at least $145 million in illicit profits. Sidoo is charged with fraud in the offer or sale of securities, fraud in the purchase or sale of securities, and unregistered offerings of securities for his alleged part in two “pump-and-dump” operations.
According to the complaint, the alleged scheme’s central figure is Canadian citizen Ronald Bauer, who allegedly partnered with others to manipulate the shares of at least 17 public companies illegally.
Bauer, 46, was one of the four men criminally charged on multiple counts of fraud and conspiracy to commit money laundering. In 2006, Bauer, then living in a luxury condo in Vancouver, was banned from directing companies for five years after settling with the SEC on allegations of market manipulation.
Sidoo is accused by the SEC of partnering with Bauer to use two public companies he directed — one registered in B.C. — to conduct pump-and-dumps.
According to the complaint, Bauer and others allegedly amassed millions of cheap insider shares, then concealed them across an array of international private shell entities. Then, they allegedly heavily promoted the companies with "misleading" marketing materials to generate investor interest before illegally selling the shares at artificially-inflated prices, resulting in significant profits at the investors' expense.
“Like others, Sidoo used offshore omnibus vehicles and front companies to conceal the fact that he was the beneficiary of stock sales and failed both to disclose his beneficial ownership and trading and to register his stock sales as legally required,” the commission alleges.
A once-prominent stock promoter based out of Vancouver, the 62-year-old faces a permanent ban from the U.S. stock market and monetary fines if proven guilty.
Sidoo played five years with the Saskatchewan Roughriders and one year with the BC Lions, according to his website. He retired from football in 1988.
Sidoo spent three months at SeaTac Federal Detention Center, from October 2020 to December 2020. Following his conviction, the provincial government stripped Sidoo of his Order of B.C.
Sidoo resides in a home valued at $35 million on Belmont Avenue in Vancouver’s West Point Grey neighbourhood near UBC. He has directed several public companies from Vancouver.
None of the allegations have been proven in court.
