B.C. Man Jailed in U.S. Stock Fraud Case Banned From Provincial Markets

A British Columbia man imprisoned in the United States for securities fraud has been permanently barred from B.C.’s investment markets, restricting his future participation and protecting local investors. 

A British Columbia man currently serving a U.S. prison sentence for his role in a large-scale stock manipulation scheme has been banned for life from the province’s investment markets.

The decision, announced this week by the provincial regulator, applies to Colin Jeffrey Heatherington, 51, and follows his 2024 conviction in California federal court.

The case surfaced publicly in British Columbia after the regulator concluded its own enforcement proceedings, separate from the U.S. criminal case, and issued a permanent market prohibition.

The development matters now because it closes the door on any future participation by Heatherington in B.C.’s capital markets, even after his U.S. sentence ends.

Lifetime bans are among the most severe sanctions available to Canadian securities regulators and are typically reserved for misconduct found to pose an ongoing risk to the public.

The action reflects the regulator’s mandate to protect investors and maintain confidence in the province’s financial system, regardless of whether criminal proceedings occur outside Canada.

How The Regulator Reached Its Decision

The British Columbia Securities Commission said a panel concluded Heatherington acted dishonestly and lacked integrity, citing the scope and calculated nature of his conduct.

The panel determined that only a permanent prohibition would adequately protect the public from future harm.

In 2024, a U.S. District Court judge in California sentenced Heatherington to three and a half years in prison followed by two years of probation after he pleaded guilty to conspiracy to commit securities fraud and wire fraud.

The court also ordered restitution totalling US$215 million, jointly owed with a co-conspirator, according to federal court records.

U.S. prosecutors established that the fraud occurred between 2004 and mid-2008 and involved manipulating thinly traded U.S. penny stocks to inflate the reported performance of hedge funds.

Those artificial gains generated substantial management and performance fees before the funds collapsed, leaving investors with losses exceeding US$215 million.

Regulators Cite Investor Protection as Lifetime Ban Takes Effect

Regulatory authorities say the decision reflects a clear obligation to protect British Columbia’s capital markets, even when criminal prosecutions take place outside Canada.

The British Columbia Securities Commission emphasized that its mandate is preventative, aimed at reducing future risk rather than punishing past conduct, and that its findings were based on misconduct already established in U.S. court.

Federal filings in the United States describe Heatherington as a trader who worked closely with hedge fund founder Florian Homm, who was indicted in 2013 and remains a fugitive.

Prosecutors with the U.S. Attorney’s Office detailed how coordinated trading practices, including cross-trading, were used to artificially inflate penny stock prices and mislead investors.

The lifetime order carries lasting consequences for investors and the integrity of the market. Heatherington is permanently barred from serving as a director or officer of any issuer and from working in the securities industry as a broker or adviser, with trading restricted to his own personal accounts.

Regulators say such measures are consistent with previous B.C. enforcement actions in major fraud cases and are intended to prevent repeat harm rather than revisit criminal liability.

Public attention has centred on the scale of investor losses and the length of time required to bring the case to a close, highlighting ongoing concerns about cross-border financial crime and enforcement gaps.

Financial Gains and Court Findings Tied to the Fraud Case

Regulators say Colin Jeffrey Heatherington personally earned at least US$15 million from the stock manipulation scheme.

U.S. court records show that some of those proceeds were used to acquire high-value real estate in Canada, including a luxury home in Oak Bay purchased in 2007 for $7.74 million in cash and sold roughly two years later.

The property transactions were cited by authorities as part of the financial trail linked to the fraud.

During sentencing, U.S. District Judge John A. Kronstadt waived additional fines and interest on the restitution order after determining Heatherington was unlikely to have the ability to pay.

The decision, documented in the federal judgment, reflects provisions in U.S. sentencing guidelines that allow courts to limit financial penalties when long-term repayment is deemed unrealistic.

 Key questions answered

Who banned Colin Heatherington from B.C.’s investment markets?

The lifetime ban was imposed by the British Columbia Securities Commission following its own administrative enforcement process. Securities commission proceedings are separate from criminal courts and are focused on investor protection and market integrity.

Does the lifetime ban apply across Canada?

The order applies within British Columbia’s jurisdiction. Other provincial securities regulators may choose to impose reciprocal bans, but those decisions are made independently and are not automatic.

Can Heatherington work in the securities industry again?

In British Columbia, the ban permanently prevents Heatherington from working in the securities industry in any professional role, including as a broker, adviser, director, or officer. He may only trade securities for his own personal accounts.

How is the B.C. ban connected to the U.S. fraud conviction?

The B.C. decision relies on facts proven in U.S. federal court, including Heatherington’s guilty plea. However, the market ban is a separate regulatory action with a preventative purpose, not an additional criminal penalty.

Case Resolution Sets Lasting Consequences for Offenders and Investors

Heatherington will continue serving his U.S. federal prison sentence, followed by probation, as ordered by the court.

The restitution order tied to investor losses remains in effect, although mandatory payments were set at a low level after the court determined he lacked the financial ability to repay the full amount.

In British Columbia, the securities commission’s lifetime market ban stands unless overturned through a formal administrative appeal, which has not been publicly pursued.

In a related enforcement action, the regulator also confirmed a separate 10-year market ban against Lorne Stuart Allison following findings by the Canadian Investment Regulatory Organization.

The outcome carries broader significance beyond the individual penalties. The case demonstrates how provincial regulators move to protect local investors from those convicted of large-scale financial fraud, even when criminal prosecutions take place outside Canada.

By imposing permanent market exclusions, regulators aim to preserve confidence in B.C.’s capital markets and limit future risk.