Legal Issues

Keith Summers was sentenced to three years in jail today after pleading guilty to one count of fraud over $5,000 and one count of uttering a forged document, contrary to the Criminal Code of Canada, before the Ontario Court of Justice.

This sentence comes as a result of an investigation by the Ontario Securities Commission’s Joint Serious Offences Team (JSOT).

JSOT launched an investigation in July 2013 into the activities of Summers and his investment fund companies Tricoastal Capital Partners LLC and Tricoastal Capital Management Ltd.  Summers admitted that he sold Tricoastal securities and defrauded investors through his fraudulent use of their investment funds, at the same time, not disclosing his trading losses.

Summers also admitted that he issued false Tricoastal Capital Partners LLC financial statements as part of this scheme. Summers’ sentence included an order to pay US$4.33 million in restitution, an amount that reflects the full investor losses in this case. As well, Summers has already forfeit $1.4 million in funds that remained in the Tricoastal accounts.

OSC Staff also initiated an administrative proceeding with respect to this matter. On September 10, 2014, the commission approved a settlement agreement between staff, Summers and the Tricoastal investment fund companies. The respondents admitted to securities fraud and agreed to permanent market bans, subject to certain exceptions, including prohibitions on trading and acquiring securities, removal of exemptions, and prohibitions on Summers becoming or acting as an officer or director. A copy of the Settlement Agreement dated August 20, 2014 is available here.

JSOT is an enforcement partnership between the OSC and the Royal Canadian Mounted Police Financial Crime program and the Ontario Provincial Police Anti Rackets Branch.

The Asset Management Unit of the U.S. Securities and Exchange Commission in New York helped with the investigation. The SEC also brought settled administrative proceedings against Mr. Summers.

Originally published on Advisor.ca

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