Malinda N. Norman

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

The respondents did not participate.

The Commission ordered permanent market bans, an administrative penalty of $300,000 per respondent, joint and several disgorgement of $2,761,979 and US$319,597, and costs of $363,146.87, finding the conduct egregious and harmful to investors.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and illegal distribution of securities.

The Commission found that the 'Armadillo Securities' were investment contracts and therefore securities under the Securities Act.

The respondents traded and distributed these securities to Ontario investors without being registered and without filing a prospectus, contrary to sections 25(1) and 53(1) of the Act.

The Commission determined it had jurisdiction over the foreign respondents because acts in furtherance of the trades occurred in Ontario.