Sinan O. Akdeniz

Following a merits decision finding the respondents engaged in unregistered trading and illegal distribution of securities, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission imposed permanent trading and director/officer bans on the respondents, with limited carve-outs for RESPs.

The Commission also ordered administrative penalties of $300,000 for Elin and $400,000 for Mellon, and joint disgorgement of $353,229.19.

Staff's request for costs was denied due to an unexplained 18-month delay in the proceedings.

Staff of IIROC applied for a hearing and review of an IIROC Hearing Panel decision regarding Mark Allen Dennis.

The Hearing Panel had found that Dennis misappropriated $1,400,000 from a client and failed to cooperate with an investigation, but capped the fine for misappropriation at $1,000,000, interpreting the sanctioning rule as a penal provision requiring strict construction.

The Ontario Securities Commission allowed the application, finding that the Hearing Panel proceeded on an incorrect principle and erred in law.

The Commission held that IIROC's sanctioning powers are regulatory, not penal, and that 'profit' must be interpreted purposively to include any pecuniary advantage gained.

The Commission substituted its decision, imposing a fine of $1,450,000 for the misappropriation to ensure full disgorgement, alongside a permanent bar, a $25,000 fine for failing to cooperate, and $7,500 in costs.

Following a merits decision finding that the respondents engaged in an illegal and fraudulent distribution of securities that raised $2.1 million from investors, the Ontario Securities Commission held a sanctions and costs hearing.

The Commission ordered permanent market participation bans against all respondents and required them to disgorge the $2.1 million obtained through their non-compliance.

The Commission also imposed administrative penalties of $500,000 on Eatch and $600,000 on McKenzie.

Staff's request for costs was dismissed, as the Commission found the respondents were entitled to a hearing on the fraud allegations.

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.

CI Financial Corp. applied for a hearing and review of decisions by the Toronto Stock Exchange (TSX) requiring CI to submit a resolution ratifying the continuation of its Shareholder Rights Plan to a two-tiered vote of all shareholders and independent shareholders.

CI argued the TSX lacked jurisdiction to impose conditions on the mid-term vote.

The Ontario Securities Commission found that the mid-term ratification was not a 'transaction' involving the issuance or potential issuance of securities under the TSX Manual.

Therefore, the TSX lacked jurisdiction to impose conditions on the vote.

The TSX decisions were set aside, allowing only independent shareholders to vote on the plan's continuation.

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.

Staff of the Ontario Securities Commission sought sanctions and costs against the respondents following a merits decision finding they engaged in unregistered trading and, in the case of Lehman and Schnedl, fraud.

The respondents operated a fraudulent investment scheme targeting European investors, using a Toronto virtual office and bank accounts to create a false impression of legitimacy.

The Commission ordered permanent market bans against all respondents.

Additionally, Lehman and Schnedl were ordered on a joint and several basis to pay a $500,000 administrative penalty, disgorge $297,542 representing the funds misappropriated from investors, and pay $51,718.83 in costs.

Staff of the Ontario Securities Commission brought allegations against Donald and Lisa Buchanan for their involvement in the sale of securities in Gold-Quest International and Harmoney Club Inc. Based on agreed statements of fact, the Commission found that Donald Buchanan engaged in unregistered trading, illegal distributions, and breached a temporary cease trade order, raising approximately US $4.3 million from Ontario investors in what was alleged to be a Ponzi scheme.

Lisa Buchanan admitted her conduct was contrary to the public interest.

The Commission held that Donald Buchanan's status as an undischarged bankrupt did not preclude it from ordering financial sanctions, as the Commission only becomes a creditor upon making the order.

The Commission imposed permanent market bans on both respondents, and ordered Donald Buchanan to disgorge $352,000 and pay an administrative penalty of $300,000, which was higher than the $150,000 requested by Staff, to ensure adequate deterrence.

Staff of the Ontario Securities Commission alleged that the respondents solicited European investors to invest in a fraudulent investment scheme offered by Lehman Cohort Global Group Inc. The respondents used a Toronto virtual office and Toronto bank accounts to mislead investors into believing they were dealing with a legitimate Ontario company.

The Commission found that Lehman and its directing mind, Anton Schnedl, traded in securities without registration and knowingly perpetrated a fraud by misappropriating investor funds, contrary to sections 25(1)(a) and 126.1(b) of the Securities Act.

Representatives Richard Unzer and Alexander Grundmann were found to have traded without registration, but the fraud allegations against them were dismissed due to insufficient evidence of their knowledge.

All respondents were found to have acted contrary to the public interest.