Donald and Gerald Hodgson, former owners of bankrupt farm supply and grain brokering firm Crop Tech Rivers, were sentenced May 17 at Brandon Provincial Court for 28 violations of the Securities Act.
The pair pleaded guilty on Jan 22 to 14 counts of trading securities without having them duly registered and 14 counts of not having a proper prospectus.
They were fined $500 per charge, or $14,000 each, and sentenced to a three-year unsupervised probationary period during which they will be required to pay $83,773.35 in restitution and refrain from trading in securities except on their own accounts and through a registered agent.
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They had pleaded guilty to selling $90,000 worth of shares in Crop Tech, a farm supply and grain brokering company that went bankrupt in early 2004.
The 14 investors, mainly from the Rivers, Man., area, who spent $10,000 to $30,000 on shares in the company in 2003 and 2004, were promised 12 to 40 percent returns on the investment and given share certificates.
Court was told that some of the shares were sold just days before the company was forced to declare bankruptcy. Banking records showed that a portion of the share money was used in the fall of 2003 to pay salaries and a $1,000 bonus. Even as their business was crumbling, the pair went on a vacation to Mexico.
Judge John Combs said that the business practices of Crop Tech Rivers were “tantamount to theft.
“It may not have been your intent, but it was closest to that,” he said.
Before the sentence was handed down, Gerald told the court that he would work seven days a week if necessary to pay it back.
His brother Don added, “I know we did wrong. We didn’t do enough homework when we started.”
