Two jailed as OSC gets tough

Critics of Canada’s securities regulation regime often claim the provincial commissions lack the teeth—or the will—to get tough on those who tarnish the industry’s image. It appears the OSC has taken this criticism to heart, announcing jail sentences for two men convicted of violating cease trade orders.

“The OSC takes violations of our cease trade orders seriously and we will continue to pursue offenders through the court system,” said Tom Atkinson, OSC director, enforcement.

First came the announcement that Justice Sheila Ray of the Ontario Court of Justice had sentenced Abel Da Silva to nine months in jail for trading in securities of Moncasa Capital Corporation without registration, and trading in securities without a prospectus. Da Silva also slapped with another nine months in jail for breaching three separate OSC cease trade orders, using the alias “Jim Wilson” to trade in securities of Moncasa.

This isn’t Da Silva’s first run in with the law—in November 2011 he was sentenced to 27 months for fraud, trading in securities without registration and trading in securities without a prospectus involving shares of Shallow Oil and Gas Inc.

Today’s sentence will be served concurrent to the earlier sentence.

In the second case, Justice Robert Bigelow of the Ontario Court of Justice sentenced George Schwartz to 90 days in jail for violating the terms of an OSC temporary cease trade order and for trading in securities without registration.

On top of that, Schwartz was placed on probation for 12 months and ordered him to perform 100 hours of community service during the period of probation.

Schwartz pled guilty to the offences on February 24, 2012. The temporary cease trade order that Schwartz violated prohibited his trading in securities of U308 Resources Inc. The cease trade was issued in December 2006 and remains in effect until July 29, 2019. Schwartz also pled guilty to trading without being registered to trade in securities. Both offences are contrary to the Ontario Securities Act.

U308 Resources was engaged in an illegal distribution of its securities to members of the public. Schwartz assisted in introducing resource properties to U308 for acquisition. He was involved in the purchase and acquisition of mineral rights and mining claims and leases in properties located in Zambia and New Mexico.

Schwartz acted in furtherance of trades in securities by permitting his electronically-imprinted initial to appear on the U308 share certificates as the U308 Treasurer. Schwartz was not the Treasurer and did not perform any other role as an officer of U308.

Between July 2007 and December 2008, approximately 107 investors purchased U308 securities with a total value of $2,380,390.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.