Derek James Ferris

The Ontario Securities Commission held a sanctions hearing regarding four respondents who acted as salespersons for Maitland Capital Ltd., a boiler room operation that fraudulently raised approximately $5.5 million from investors.

The respondents admitted to their involvement and cooperated with Staff.

The Commission found that the respondents breached the Securities Act by making prohibited representations to vulnerable investors.

To protect the public interest and deter future misconduct, the Commission ordered the respondents to cease trading in securities for three years (with limited RRSP exceptions), disgorge the full amount of their sales commissions totaling over $82,000, and permanently prohibited them from telephoning residences to trade securities.

Administrative penalties were not imposed on two respondents due to mitigating factors, including age and limited financial resources.

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.

Following a merits hearing where the respondents were found to have engaged in a boiler room operation, illegally distributing securities and using high-pressure sales tactics, the Commission held a sanctions and costs hearing.

The Commission ordered permanent cease trade and director/officer bans against the corporate respondent and its principals, and a 10-year ban against a salesperson.

The respondents were ordered to disgorge the full $2.75 million obtained from investors.

Administrative penalties totaling $625,000 and costs of approximately $160,000 were also ordered.

Following a merits decision finding that the respondents engaged in unregistered trading, illegal distributions, and high-pressure sales tactics, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission found the respondents' conduct to be egregious, involving misrepresentations to investors and breaches of prior Commission orders.

The Commission ordered permanent and 20-year trading bans, director and officer bans, and telephoning prohibitions.

Administrative penalties of $200,000 each were imposed on First Global and Grossman, and $20,000 on Shuman.

The respondents were also ordered to pay costs totaling $62,573.74.

The Ontario Securities Commission held a hearing on the merits regarding allegations that Limelight Entertainment Inc. and its principals and salespersons engaged in unregistered trading and illegal distributions of securities.

The Commission found that the respondents raised approximately $2.75 million from investors across Canada and internationally using high-pressure sales tactics, without being registered and without filing a prospectus.

The respondents purported to rely on the accredited investor exemption, but the vast majority of investors did not qualify.

The Commission also found that the respondents made prohibited representations regarding the future listing of shares, filed misleading reports, misled Commission Staff during the investigation, and breached temporary cease trade orders.

The conduct was found to be egregious and contrary to the public interest.

A sanctions hearing was ordered to be scheduled.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and illegal distribution of securities, breached cease trade orders, and used high-pressure sales tactics.

The Commission found that the respondents traded in First Global shares without being registered and without a prospectus, contrary to sections 25(1) and 53(1) of the Securities Act.

The respondents also breached multiple Commission orders and made misrepresentations to investors.

The Commission concluded that the respondents' conduct was egregious, harmful to the integrity of Ontario's capital markets, and contrary to the public interest.

A subsequent hearing was ordered to determine sanctions.

Staff of the Ontario Securities Commission and the respondent sought approval of a settlement agreement.

A parallel proceeding involving some of the same respondents and allegations was pending before the Alberta Securities Commission (ASC).

The respondent requested that the settlement agreement and hearing transcripts remain confidential to avoid prejudicing the ASC proceeding.

The Commission granted the confidentiality order, directing that the materials remain confidential until the earlier of the release of the ASC decision or the commencement of the substantive OSC hearing, subject to Staff's disclosure obligations to the other respondents.

Staff of the Ontario Securities Commission alleged that the respondents, including Leslie and Douglas Brown, engaged in unregistered trading and illegal distribution of securities related to 'F.E.D.I. desks' at an investment seminar.

The Browns had invited friends to the seminar and introduced the main speaker, but did not receive compensation or act on behalf of the promoter.

The Commission found that the Browns' actions did not constitute acts in furtherance of a trade, as they were not acting to promote the sale on behalf of the seller.

The allegations against the Browns were dismissed.