In 2009, the Ontario Superior Court jailed Livent CEO Garth Drabinsky and a colleague over several counts of criminal fraud.
The Ontario Securities Commission (OSC) says this was based on their actions prior to Livent’s IPO on the Toronto Stock Exchange in May 1993. New management took over Livent in 1998 and learned of allegations that the company’s prior financial statements contained misrepresentations.
The OSC adds the men also concealed a kickback scheme within those statements.
Drabinsky and colleague Myron Gottlieb were found guilty of forgery in March 2009, along with two counts of criminal fraud over $5,000.
A third exec, Gordon Eckstein, pled guilty to one fraud charge two years earlier.
Drabinsky and Gottlieb appealed their sentences to the Ontario Court of Appeal in 2011, which resulted in a reduction of jail time for both, but not dismissal of charges.
The pair sought leave from the Supreme Court of Canada to appeal the Ontario Court’s decision, but that was dismissed in March 2012.
Now, the OSC is continuing its proceedings that were adjourned in July 2001.
“This is when the Ontario Superior Court’s criminal case was gearing up,” says Alexandra Clark, a litigator for the OSC.
Today, the OSC conducted a 15-minute hearing between representatives of the three men and Clark.
All parties will reconvene for a private, pre-hearing conference on May 23, 2013 to discuss the case.
Since 2001, the OSC has forbidden Drabinsky, Gottlieb and Eckstein from becoming registrants without consent.
The OSC adds it’s also deciding whether the men have to disgorge all funds obtained through non-compliance, as well as ban them from securities trading.