BCSC Dismisses Fraud Allegations in Silvercorp Metals Case

Mining Weekly reported that a British Columbia Securities Commission (BCSC) panel has thrown out fraud allegations against Jon Richard Carnes. It was alleged by BCSC staff in December 2013 that Carnes perpetrated a fraud by anonymously publishing a negative report about Silvercorp Metals Inc. (TSX:SVM,NYSEMKT:SVM), then profiting from a short position in the company when its share price fell.

As quoted in the market news:

Staff also alleged that Carnes’ conduct was contrary to the public interest, and stated that it was in the public interest for the commission to issue an order.

The notice alleged that Carnes posted a report that contained several false statements, and omitted to state certain information, in relation to a mining expert’s report about Silvercorp. A central part of Carnes’ report and the expert’s report was the differences between Silvercorp’s Chinese filings and its North American regulatory filings for the company’s SGX mine, in China.

The Chinese filings had lower production, quality, and resource estimates than those stated in the North American regulatory findings.

In its decision, the panel dismissed the fraud allegations, stating that none of the statements or omissions ‘constitute a prohibited act for the purpose of fraud.’

Click here to read the full Mining Weekly report.