Former Oilers owner Peter Pocklington charged with securities fraud in California
Pocklington and lawyer accused of defrauding investors, misappropriating funds
Former Edmonton Oilers owner Peter Pocklington has been charged with securities fraud in California for allegedly defrauding investors in his medical-device company and misappropriating investor funds.
The complaint from the U.S. Securities and Exchange Commission, filed Thursday in federal court in California, alleges Pocklington misled investors by failing to fully disclose his role as founder of The Eye Machine, a company ostensibly aimed at creating a device to treat macular degeneration.
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The SEC complaint alleges that in order to "prevent investors from learning that he is in control of The Eye Machine, Pocklington had his lawyer, Lantson Eldred, serve as the "visual front" of the company while Pocklington secretly controlled it "from behind the scenes." The Eye Machine eventually raised more than $14 million from 260 investors.
In a news release, the SEC said Pocklington, Eldred, and The Eye Machine "allegedly failed to disclose Pocklington's checkered history and involvement, and misrepresented how investor funds would be spent.
"Pocklington allegedly misappropriated over $600,000 of investor funds for personal use, including funding his gold mining companies and paying personal legal and credit card bills," the news release states.
The SEC also alleges The Eye Machine, now called Nova Oculus Partners, paid millions of dollars in undisclosed and excessive sales commissions to several people who allegedly operated a "boiler room" operation in Florida to bring in investors.
None of the accusations against Pocklington, Eldred, or the other defendants has been proven in court.
Pocklington's history includes a sentence of house arrest and two years' probation in 2010 after he pleaded guilty to lying to the court about his income and assets after he filed for bankruptcy.
In May 2013, Pocklington and an associate were ordered to pay more than $5 million restitution to settle a securities fraud case in Arizona. The Arizona Corporation Commission, the equivalent of the Alberta Securities Commission, alleged Pocklington and his partner told at least 120 investors they owned mineral rights to a mine in Arizona that would soon be producing gold.
The commission said Pocklington and his partner also claimed in newsletters that the investment represented "one of the most lucrative dividends in the mining business" and claimed hedge funds and banks were interested in the project,
"The commission found, however, that the estimates of gold resources on the respondents' website were not supportable with the methods currently available in the industry." Pocklington and his partner agreed to pay the restitution without admitting or denying the commission's findings.
Pocklington is still being pursued by the Alberta government in an attempt to collect more than $13 million the former Edmonton businessman owes the province from an unpaid 1988 loan to his former Gainers meatpacking plant.
Los Angeles lawyer David Casselman has been acting for Alberta for years and has been trying, unsuccessfully, to trace what he believes are offshore accounts used by Pocklington to hide money from creditors.
Casselman told CBC News that he views this latest SEC action as positive because "the SEC have the power to do bank searches that we don't."
Pocklington came to be known as "Peter Puck" when he bought part ownership of the Edmonton Oilers in 1976. Under his ownership, the Oilers won five Stanley Cups in the 1980s.
He created enemies among thousands of Oilers fans when he traded superstar Wayne Gretzky to Los Angeles in 1988. He sold the team in 1998 and moved to California four years later.