Richard Ryan Penn and Roman Reuven Rubin, chief executive officer and former chief financial officer and secretary of Black Tusk, were fined for insider trading over a three-year period. Both executives were fined by the BC Securities and Exchange Commission for failing to disclose information regarding their insider share sales to the authorities.
Black Tusk Resources is a Canadian mining company with six gold and palladium projects in Canada, although most of the projects are located in Quebec, one is in BC 145 kilometers south of Smithers. In a settlement with the BC Securities Commission, executives admitted to failing to report most of their transactions to authorities with respect to internal share sales.
A notice issued Jan. 6 by the Securities Commission reported, “As corporate insiders, Penn and Rubin were required to report transactions in their securities on the Electronic Disclosure System by publicly available insiders.” However, for the period between January 2018 and December 2021, Penn and Rubin did not report their securities transactions for the period between January 2018 and December 2021.
Richard Ryan Penn reportedly failed to report 87% of transactions valued at $1,155,947 million. For his part, Roman Reuven Rubin omitted information on 96% of the transactions made in the same period, such transactions were valued at $646,566.
According to the agreements reached by the BC Securities and Exchange Commission with Penn and Rubin, the current CEO of the company must pay a fine of $75,000 dollars as well as complete an educational course on how to be a responsible director of a public company. Rubin, on the other hand, decided to resign from his position as CFO of Black Tusk Resources and was ordered to pay a $65,000 fine and complete the same course.
Misrepresentation of Holdings
The executives were held responsible for Black Tusk’s misrepresentation of the number of shares held by the company because Penn and Rubin did not issue press releases when they reduced their holdings of Black Tusk common stock, thereby misrepresenting the number of shares they each owned. However, the executives are estimated to have taken home cash salaries of $120,000 in 2021, according to the latest management documents.
In October 2019, the company had stated that Penn held 2,924,500 shares of Black Tusk stock when it actually held only 1,093,725; and in November 2020, the company had misleadingly stated that Penn held 5,014,500 shares when it actually owned only 505,075.
Although Penn and Rubin made the required filings, paid late fees, and the company issued press releases correcting the disclosure of their holdings, it is unclear how much profit the company executives may have made by selling their shares during that time period.
Since Penn took over as CEO of Black Tusk in 2017, the company has had no revenue, limited resources, and no sources of operating cash. According to its 2021 annual audit, the company reported a net loss of $3.28 million.
Black Tusk’s Multiple Projects
Black Tusk Resources Inc. is a Canadian mineral exploration company focused on gold and precious metals mining and drilling. The company currently conducts exploration and development activities on 6 separate gold and PGE projects: McKenzie East Gold Project, Golden Valley Project, Lorraine Property, PG Highway Property, MoGold Property, and South Rim Gold Project. The company has offices in Vancouver and Montreal, with six gold and palladium projects, the majority of which are located in Quebec, and the other located in British Columbia.