A veteran B.C. penny stock promoter with a history of insider trading reporting violations has again been found to have contravened such rules involving transactions totalling more than $1.5 million.
The B.C. Securities Commission (BCSC) announced Wednesday it has fined Michael Derek Townsend $60,000 for failing to file timely reports of his securities trading activity.
According to an administrative penalty notice issued by BCSC executive director Peter Brady, Townsend was initially fined $70,000 before he appealed the penalty.
Townsend’s violations occurred between October 2020 and June 30, 2024, during which time he was and remains a director for Scorpio Gold Corp. (SGN.V), Altus Copper Corp. (PLBL) and Magma Silver Corp. (MGMA.V) He was also a director of Infinity Stone Ventures Corp. (GEMS.CN) between April 2022 and December 2023.
Townsend entered into 739 transactions that changed his beneficial ownership of, or control or direction over those public companies. However, he failed to file insider reports within the required five-day period for 528 of them, the commission’s original notice stated.
On March 10, 2025, the commission stated it notified Townsend of discrepancies in his insider reporting record identified through a trading review. Of the 528 transactions reported late, 223 were reported after the notification. All but one were acquisitions.
Brady found the volume of shares in the unreported trades, compared to total trading in the stock was a relevant factor.
Nearly all of the transactional value was tied to shares of Infinity Stone and Magma Silver.
Townsend was fined $40,000 in 2007 and banned from trading securities for one year for not filing insider reports.
Between November 2020 and March 2025, the commission assessed Townsend $15,700 in late-reporting fees, which he paid.
Townsend appealed to the commission to have the penalty lowered to $35,000.
Townsend submitted to the commission that the 2007 contraventions had, according to the commission’s summary in its amended notice, “the appearance of a deliberate attempt to conceal trading, whereas this is a case of inadvertently failing to report some transactions.”
Townsend said the contraventions were “inadvertent, did not benefit him financially or cause specific harm to any investor.” Therefore, he did not engage in any of the harms that insider reporting is designed to address.
He also told the commission that he was “going through difficult family circumstances involving significant travel.”
In response to Townsend’s appeal, Brady found that Townsend’s personal circumstances did not change the seriousness of the contraventions and that co-operation is expected.
Brady agreed that Townsend’s past conduct “appears more serious than the current contraventions because there were transactions through corporate accounts and an offshore securities firm.”
However, while acknowledging Townsend did not benefit financially, Brady concluded Townsend is an “experienced” senior executive and “the present matter remains a repeat contravention.”
“The major harm is to market integrity, because investors as a whole do not have a complete picture of trading by insiders,” Brady said.
Following an analysis of past cases, Brady reduced the penalty to $60,000, and ordered Townsend to pay it by Nov. 16, 2026.
