Ontario Securities Commission
Paolucci (Re), 2020 ONSEC 32
Ontario Securities Commission
Commission des valeurs mobilières de l’Ontario
22nd Floor 20 Queen Street West Toronto ON M5H 3S8
22e étage 20, rue Queen Ouest Toronto ON M5H 3S8
Citation: Paolucci (Re), 2020 ONSEC 32
Date: 2020-12-21
File No.: 2020-25
IN THE MATTER OF
DINO PAOLUCCI
REASONS AND DECISION
(Subsections 127(1) and 127(10) of the Securities Act, RSO 1990, c S.5)
Hearing:
In Writing
Decision:
December 21, 2020
Panel:
Wendy Berman
Vice-Chair and Chair of the Panel
Submissions:
Vivian Lee
For Staff of the Commission
No submissions made by or on behalf of Dino Paolucci
REASONS AND DECISION
I. OVERVIEW
1 On September 6, 2019, Dino Paolucci was convicted in the United States District Court for the Eastern District of Pennsylvania (the US Court) of four counts of securities fraud in violation of Title 15 of the United States Code, Sections 78j(b) and 78ff, Title 17 of the Code of Federal Regulations, Section 240.10b-5, and Title 18 of the United States Code, Section 2. After pleading guilty to the offences,1 Mr. Paolucci was sentenced to 84 months of imprisonment and ordered to forfeit US$2 million.2
2 Staff of the Ontario Securities Commission (Staff) applies for a protective order in the public interest pursuant to s. 127(10) of the Securities Act, RSO 1990 c S.5 (the Act), which provides that an order may be made under s. 127(1) of the Act against a person who has been convicted in any jurisdiction of an offence arising from a transaction, business or course of conduct related to securities or derivates. Staff submits that this precondition has been met and that it is in the public interest based on these circumstances to make an inter-jurisdictional enforcement order permanently prohibiting Mr. Paolucci from participating in Ontario’s capital markets.
3 For the reasons that follow, I find that Mr. Paolucci’s conviction arose from a course of conduct related to securities, and that it is in the public interest to permanently prohibit Mr. Paolucci’s participation in Ontario’s capital markets by issuing the order requested by Staff.
II. SERVICE AND PARTICIPATION
4 Staff served Mr. Paolucci with the Notice of Hearing, Statement of Allegations and Staff’s hearing brief, written submissions and brief of authorities by courier at the US correctional facility where Mr. Paolucci is currently incarcerated.3 Staff obtained confirmation from a representative of the US correctional facility that Mr. Paolucci personally received these materials on August 12, 2020.4
5 I find that service was properly effected on Mr. Paolucci on August 12, 2020.
6 Staff elected to proceed by way of the expedited procedure for a written hearing provided for in the Commission’s Rules of Procedure and Forms.5 As stated on the Notice of Hearing, Mr. Paolucci had 21 days from the date of service to file a request for an oral hearing, and 28 days from the date of service to file a hearing brief and written submissions. The deadlines for Mr. Paolucci to request an oral hearing and to serve and file written submissions have passed. No request for an oral hearing was made and no materials were filed by or on behalf of Mr. Paolucci.
7 Pursuant to the Statutory Powers Procedure Act6 and the OSC Rules of Procedure,7 the Commission may proceed in the absence of a party who has been provided adequate notice of a proceeding. I am satisfied that Mr. Paolucci was provided with adequate notice of this proceeding and that I may proceed in his absence.
8 On December 3, 2020, Staff filed a copy of the US government’s change of plea memorandum dated September 6, 201