The Nova Scotia Securities Commission has forced an Ontario company to remove an online ad seeking investors.
Carl Strand started Strand Energy Corp., of Wasaga Beach, Ont., six years ago and planned to build wind turbines somewhere in Nova Scotia.
Strand posted an ad on Kijiji, a classified ads website, on Friday to gauge local interest in helping him set up a factory here.
The ad said that any pledges made by individuals are not binding but “only a way of showing our company that individuals are interested.”
It also said investments of $500 per pledge would be made through a community economic development investment fund, although Strand does not have approval to set up such a fund here.
Kevin Redden, the commission’s corporate finance director, told Strand Tuesday that his ad violates CEDIF regulations that say people are not allowed to advertise or “distribute promotional material” if they haven’t been given provincial approval.
“We never asked anybody for money in that ad that we put in. It was only a non-binding pledge that if they wanted to put some money in at a later date they could,” Strand said Tuesday.
“We did not know that this was against the rules of the Nova Scotia Securities Commission because we weren’t asking for any money. But apparently it is.”
A CEDIF allows people to invest in local businesses, said Chris Payne, a spokesman with the Department of Economic and Rural Development.
“Instead of investing in the Toronto stock exchange, you’re investing it locally down the street,” Payne said of CEDIFs.
Investors can write off 35 per cent of the amount invested into such funds and can get dividends, said Payne. There are currently 10 funds that are paying out dividends in the province, he added.
Payne said that groups that want to set up a fund need to fill out paperwork and get provincial approval before they can approach investors.
“I did get a call from (Strand Energy Corp.) a few weeks ago. They had some inquiries and I gave them some information. But by no means have they made a formal application. They most certainly are not approved,” said Payne.
“I will be taking this ad and forwarding it to my colleagues at the securities commission to follow it up,” Payne said when informed of the Kijiji ad on Tuesday.
Strand, the designer of the company’s wind turbines, said he has invested $250,000 in his company and built five prototypes over the past six years.
StrandEnergy.ca, the company’s website, says that while the business is currently small, it hopes to capture a large share of the renewable energy market.
“We are pulling the ad and may have to reconsider locating in Nova Scotia,” said Strand.