Patrick J. LeSage

The Ontario Securities Commission found that the respondents, Richard Mellon and Alex Elin, engaged in a fraudulent investment scheme involving the sale of shares in two mining companies, Karp and Legacy.

The respondents operated a boiler room that targeted European investors, raising over $350,000.

The Commission concluded that the respondents traded in securities without registration, made illegal distributions without a prospectus, and made prohibited representations that the securities would be listed on a stock exchange.

The allegations regarding undertakings as to future value were dismissed.

A sanctions and costs hearing was ordered.

Following a merits hearing where the respondents were found to have engaged in a fraudulent 'pump and dump' scheme involving Sulja Nevada securities, the Ontario Securities Commission held a sanctions and costs hearing.

The Commission ordered permanent market bans, disgorgement of $5.6 million, and administrative penalties of $750,000 each against the primary perpetrators, Vucicevich and DeVries.

Lesser market bans and administrative penalties were ordered against the other respondents based on their varying levels of culpability.

Costs were also awarded against the respondents.

Staff of the Ontario Securities Commission brought allegations against Sulja Nevada, Kore Canada, and Andrew DeVries for their involvement in a 'pump and dump' scheme.

The Commission found that Sulja Nevada issued numerous false and misleading press releases to artificially inflate its stock price.

Concurrently, DeVries authorized the issuance of millions of treasury shares to nominee accounts, which were then sold into the market for a profit of approximately US $5.6 million.

The Commission concluded that DeVries engaged in unregistered trading, illegal distribution, and fraud.

Kore Canada was found to have engaged in market manipulation through its employees' nominee accounts.

Sulja Nevada was found to have made misleading and untrue statements in its press releases.

Staff of the Ontario Securities Commission alleged that the respondents engaged in an illegal distribution of securities and perpetrated a fraud on investors.

The respondents distributed shares in a purported pharmaceutical company, raising approximately $2.1 million from investors in Ontario and the United Kingdom.

The respondents represented that the funds would be used to develop a pharmaceutical business and humanitarian projects in developing nations.

The Commission found that the company had no legitimate underlying business and that the respondents diverted almost all investor funds for personal expenses or left them unaccounted for.

The Commission concluded that the respondents distributed securities without a prospectus and knowingly perpetrated a fraud on investors, contrary to subsections 53(1) and 126.1(b) of the Securities Act.

Following a merits decision finding that the respondents engaged in unregistered trading, illegal distributions, and in some cases fraud, the Ontario Securities Commission determined the appropriate sanctions and costs.

Although investors did not lose money because the principal respondents voluntarily repaid the capital with 18% interest, the Commission imposed significant administrative penalties, trading bans, and director/officer bans to deter future misconduct.

Disgorgement was not ordered.

Costs of $180,000 were awarded against the principal respondents.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and an illegal distribution of MRS Sciences Inc. shares, relying improperly on the accredited investor exemption.

The Commission found that the respondents failed to exercise reasonable diligence to ensure investors qualified as accredited investors, and in some cases knew they did not.

The Commission concluded that the respondents breached the registration and prospectus requirements of the Securities Act.

Allegations of prohibited undertakings regarding future value, prohibited representations regarding future listing, and manipulative trading were dismissed due to insufficient evidence.

The individual respondents, as directors or de facto directors, were deemed to have authorized, permitted, or acquiesced in the corporate breaches.

Staff of the Ontario Securities Commission alleged that the respondents engaged in an illegal scheme to sell securities (Borealis Guaranteed Return Investment Certificates) without registration or a prospectus, and that the scheme was fraudulent.

The respondents raised over $16 million from investors by promising 18% annual returns and falsely representing that the funds would be deposited with a trust company to leverage loans for small businesses, and that the investments were fully insured by CDIC and reinsured by major international insurers.

The Commission found that the Borealis GRIC was an investment contract and therefore a security.

The Commission concluded that several corporate and individual respondents, including the key organizers, traded without registration, distributed securities without a prospectus, and perpetrated a fraud on investors by making material misrepresentations about the security and insurance of the investments.

Certain peripheral respondents were found to have traded illegally but were not found liable for fraud.

The Ontario Securities Commission held a hearing regarding a 'pump and dump' scheme involving the promotion and sale of shares of Sulja Nevada.

Based on uncontested evidence, the Commission found that Steven Sulja, as CEO, breached subsection 126.2(1) of the Securities Act by failing to correct false statements in press releases regarding merger opportunities, revenue potential, and audit arrangements.

The Commission also found that Sam Sulja breached subsection 126.1(a) of the Act by trading heavily as a nominee to conceal another party's involvement, thereby creating a misleading appearance of trading activity.

The Ontario Securities Commission held a hearing regarding allegations of a 'pump and dump' scheme involving shares of Sulja Nevada.

The respondents Vucicevich, Banumas, and Shah did not contest the allegations.

The Commission found that Vucicevich issued materially misleading press releases to artificially inflate the stock price and subsequently sold shares through nominee accounts held by Banumas and Shah.

The Commission concluded that Vucicevich traded without registration, distributed securities without a prospectus, and perpetrated a fraud contrary to the Securities Act.

Banumas and Shah were found to have contributed to a misleading appearance of trading activity.

The Ontario Securities Commission held a hearing on the merits regarding allegations that the respondents engaged in unregistered trading, advising without registration, and fraud.

The respondents failed to appear.

The Commission found that the respondents sold securities without registration or available exemptions, acted as advisors without registration, and perpetrated a fraud on investors by misappropriating funds for personal use, posting false trading results, and using investor funds to pay returns to other investors.

Following a merits hearing where the respondents were found to have engaged in unregistered trading and illegal distribution of securities through an investment scheme, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission ordered permanent market bans against all respondents, with limited exceptions for the individual respondents' RRSPs.

The Commission also ordered administrative penalties of $50,000 for each individual respondent and $40,000 for each corporate respondent, disgorgement of $500,000 on a joint and several basis, and costs of $169,651.25.

The Ontario Securities Commission held a hearing to consider allegations that the respondents operated an illegal investment scheme called "Eggvestments" through a business club.

The respondents raised over $1 million from investors by promising guaranteed returns of up to 20% from foreign currency trading.

The Commission found that the respondents traded in securities without registration, distributed securities without a prospectus, and that White, Qureshi, and WNBC engaged in unregistered advising.

No exemptions were available as the investors did not qualify as accredited investors.

The Commission concluded that the respondents' conduct, which included making false promises and misleading statements about returns, was contrary to the public interest and harmful to the integrity of Ontario's capital markets.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and the respondents, Ernest Anderson and Golden Gate Funds LP.

The respondents admitted to engaging in unregistered trading and illegal distribution of securities, raising over $8 million from investors without a prospectus or registration.

The Commission approved the settlement, ordering permanent market bans, an administrative penalty of $126,795, disgorgement of $4,644,258.10, and $20,000 in costs.

Hahn Investment applied for a hearing and review of a decision by the Investment Industry Regulatory Organization of Canada (IIROC) refusing to vary or cancel certain trades in Exchange Traded Funds (ETFs) made on October 14, 2008.

Hahn Investment argued the trades were unreasonable due to significant divergence between the underlying values of the indices and the traded prices.

The Ontario Securities Commission dismissed the application, finding that IIROC correctly applied its policies and procedures, did not overlook material evidence, and that new evidence regarding the underlying security of one ETF was not compelling enough to change the outcome.

The Commission emphasized the need for deference to SRO decisions, particularly those involving technical expertise and time-sensitive market rulings.

Staff of the Ontario Securities Commission brought a proceeding under subsections 127(1) and 127(10) of the Securities Act seeking reciprocal orders against the respondents based on orders made by the Alberta Securities Commission and other provincial regulators.

The Commission found it in the public interest to grant the requested orders.

Petroleum Unlimited LLC and Roger A. Kimmel Jr. were ordered to cease trading in securities and were denied exemptions under Ontario securities law for a period of seven years.

Global Petroleum Strategies LLC was permanently ordered to cease trading and permanently denied exemptions.

The Ontario Securities Commission held a settlement hearing regarding Shawn Lesperance, the Treasurer and a director of Goldbridge Financial Inc. The respondent acknowledged receiving monies in violation of the Securities Act and an outstanding Commission order.

The Panel approved the settlement agreement, finding it in the public interest.

The respondent was prohibited from trading in securities and acting as a director or officer of any issuer for three years, and ordered to pay $1,000 in investigation costs.

Staff of the Ontario Securities Commission sought a permanent order imposing sanctions against the respondent under the inter-jurisdictional enforcement provision of the Securities Act.

The respondent had previously consented to a final judgment in the United States for orchestrating a fraudulent scheme involving the sale of unregistered securities and misappropriating investor funds.

The Commission found that the respondent's conduct in the US was egregious and contrary to the public interest.

The Commission granted the order, permanently banning the respondent from trading in securities, acquiring securities, and acting as a director or officer of any issuer.

TSX Inc. sought intervenor status in a hearing and review requested by the respondent regarding a decision of Market Regulation Services Inc. (RS).

The respondent had challenged the validity of the Universal Market Integrity Rules (UMIR) and the TSX's delegation of market regulation to RS.

The Commission granted TSX limited intervenor status, finding that the TSX had a direct interest in the proceeding because its market regulation and enforcement regime was being challenged, and that its participation would be useful without unfairly prejudicing the existing parties.