Retired BC lawyer criminally charged following stock market investigation

Vancouver, BC – A retired Vancouver-area lawyer has been charged following a B.C. RCMP Integrated Market Enforcement Team (IMET) investigation into a multi-million dollar stock market-related scheme.

On March 5, 2020, the Public Prosecution Service of Canada approved three charges under the False Prospectus provisions of the Criminal Code against Delta resident Peter John Merry, age 73.

“Public trust and faith in the accuracy of corporate statements is a cornerstone of stock markets in both Canada and the U.S.,” stated Superintendent Brent Taylor, Officer in Charge of the Federal Serious and Organized Crime – Financial Integrity Program. “When this faith is undermined, not only do investors suffer, but legitimate small companies have a harder time raising capital to develop their businesses.”

The case dates back to late 2013, when Life Stem Genetics, Inc., a purported operator of stem cell therapy clinics based in Beverly Hills, California, began trading as LIFS on the OTC Bulletin Board market. Trading volume and LIFS stock price jumped after Life Stem Genetics, Inc. made claims in a series of press releases. On November 25, 2013, the United States Securities and Exchange Commission temporarily suspended trading in Life Stem Genetics, Inc.’s shares, citing concerns over the accuracy and adequacy of its disclosures. By the end of 2014, Life Stem Genetics, Inc.’s total stock market value was virtually zero.

Arrested
File Photo – Arrested

The subsequent RCMP IMET investigation, dubbed Project E-Narcose, alleges certain statements made to potential investors or partners were false. The IMET investigation revealed that Peter Merry, who was a practicing lawyer at the time as well as a central figure at Life Stem Genetics, Inc., was key to the publication or distribution of the allegedly false claims. Life Stem Genetics, Inc., was held out to be a breakthrough company offering innovative stem cell medical treatments to thousands of patients in a chain of clinics. However, the RCMP investigation determined the company had no clinics, no patients and no revenues.

“The victim impact goes beyond the monetary loss,” said Superintendent Taylor. “As an example, one victim reached out to Life Stem Genetics, Inc., seeking to treat a family member’s seizures; instead, they were lured to invest in the company. No treatment was received and the victim lost $5000 and precious time not spent in actual treatment.”

The RCMP would like to specifically acknowledge the assistance they received from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and the U.S. Securities and Exchange Commission.

Merry, who has no criminal record, will appear at the Surrey Provincial Court on March 26, 2020.

File # 2013E-9078

Integrated Market Enforcement Team
BC RCMP



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