February 8, 2023 – The British Columbia Securities Commission (BCSC), the independent provincial government agency responsible for regulating investment markets in BC, Canada, has recently ruled that ImagineAR, a provider of branded augmented reality solutions for businesses, had violated the Securities Act.
According to a decision made by a BCSC hearing panel, ImagineAR failed to adequately indicate that paid promotional materials disseminated by investor relations firm Stock Social Inc. were issued on behalf of ImagineAR.
The findings were part of a wider ruling against Stock Social, which was found to have contravened section 52(2) of the British Columbia Securities Act by failing to ensure that records disseminated as part of marketing and investor relations activities disclosed clearly and conspicuously that they were issued on behalf of five of its clients.
The Securities Act requires anyone engaged in investor relations activities, or who is doing so on behalf of an issuer or security holder, to clearly and conspicuously disclose when promotional materials are issued by them or on their behalf. Such disclosures enable the public to decide how much weight to give to the content and to make better informed investment decisions.
This is the first time a BCSC panel decision has found a violation of the provision of the Act regarding clear and conspicuous disclosure of promotional materials used in investor relations activities.
According to BCSC, Stock Social prepared and disseminated an advertorial about ImagineAR on one website back in 2016, however the advertorial did not indicate that it was issued on behalf of the company. Stock Social also arranged for the same advertorial to be distributed in posts by six social media influencers and by Stock Social on Twitter. Again, none of the posts indicated that they were issued on behalf of ImagineAR. ImagineAR paid CDN $30,000 to Stock Social for those investor relations services.
According to ImagineAR’s President & CEO, the violation ocurred when the company was operating under the name ‘Imagination Park Entertainment,’ and took place prior to the company operating in the augmented reality space. This was also before Silverrstieen’s tenure at the company.
As part of the hearing, ImagineAR admitted that it did not ensure that the advertorial and social media posts clearly disclosed that they were issued on its behalf, contrary to section 52(2) of the Act.
Image credit: Stock image
About the author
Sam is the Founder and Managing Editor of Auganix. With a background in research and report writing, he has been covering XR industry news for the past seven years.