OCMT 2016

Following a merits decision finding that the respondents breached Ontario securities law by failing to file required financial statements and failing to cooperate with an audit, the Ontario Securities Commission held a written hearing to determine sanctions and costs.

The Commission found that the respondents' conduct showed a complete disregard for the integrity of Ontario's capital markets and that they were fundamentally ungovernable.

The Commission ordered permanent market bans against both respondents, required the individual respondent to resign all director and officer positions, and ordered him to pay $129,845.66 in costs.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order under s. 127(1) of the Securities Act, relying on s. 127(10), following the respondent's criminal convictions for fraud over $5,000.

The respondent had participated in a Ponzi scheme that defrauded approximately 160 investors of over $6 million, and separately defrauded his physician of over $1 million.

The Commission found that the fraudulent transactions met the test for 'investment contracts' and therefore constituted a course of conduct related to securities.

Given the severity of the fraud, the devastating impact on investors, and the respondent's motivation of greed, the Commission concluded it was in the public interest to permanently ban the respondent from participating in Ontario's capital markets.