Staff of the Ontario Securities Commission brought a motion to extend a temporary cease trade order against Momentas Corporation and its principals.
Momentas had been raising capital by selling convertible debentures to accredited investors to fund its automated equity trading system and foreign currency trading.
The Commission found that Momentas was acting as a market intermediary because it employed a significant sales force to sell its own securities and used the proceeds to trade professionally for the indirect benefit of its investors.
As a market intermediary, Momentas could not rely on the accredited investor exemption and was required to be registered.
The Commission extended the temporary cease trade order pending the hearing on the merits, with limited carve-outs allowing Momentas to continue developing its trading system and to close out foreign currency positions.
