The Ontario Securities Commission held a hearing to determine whether Momentas Corporation and its founders, Howard Rash and Alexander Funt, violated the Securities Act by trading securities without registration.
Momentas raised over $7.8 million from the sale of convertible debentures using an in-house sales team.
The Commission found that Momentas acted as a market intermediary and could not rely on the accredited investor exemption.
Furthermore, Rash and Funt engaged in acts in furtherance of trades and, as de facto officers and directors, authorized Momentas' breaches of Ontario securities law.
A subsequent hearing was ordered to determine appropriate sanctions.