John Gregory Paterson, the former president and CEO of Southwestern Resources Corp., has admitted to securities fraud and illegal insider trading, the British Columbia Securities Commission (BCSC) said Thursday.

Paterson has been barred from the business for issuing incorrect news releases about Southwestern's Boka, China, project, and trading while the false information had boosted the stock price, the commission said.

He owes the BCSC about $3.5 million, but cannot pay because he had already contributed all of his assets to settle lawsuits arising from the Boka misrepresentation, the commission said.

Paterson put out 24 news releases between March 7, 2003, and February 21, 2007, about Boka that contained hundreds of discrepancies, an agreed statement of facts signed by Paterson and a commission official said.

"While some of the discrepancies were minor, in at least 60 instances, Southwestern had reported significant gold findings where the actual assay result was negligible (less than 0.1 gram/ton)."

In fact, "the actual gold grades were low enough to make the Boka project unlikely to be economic," the statement said.

Substituting fake results for real ones in the releases constituted a fraud, the statement said.

When the poor assay results were made public by Southwestern on July 19, 2007, the stock crashed $3.44 to $2.90, erasing about $157.7 million of market value.

Paterson had sold 50,000 Southwestern shares three days earlier for $5.96 each, when he knew the published assay results were wrong and would have to be corrected.

That was insider trading, the agreed statement said.

Hochschild Mining PLC took over Southwestern in May for 50 cents a share.

Paterson, who has suffered from severe clinical depression for more than a decade, said his depression affected his judgment in the actions described in the statement.