scales of justice

A Canadian penny stock promoter who is serving time for securities fraud in the U.S. is now facing possible regulatory discipline in Canada.

The Ontario Securities Commission (OSC) issued a notice of hearing against Dino Paolucci, who is currently serving a seven-year sentence in the U.S. after pleading guilty to four counts of securities fraud. The convictions stem from a series of pump-and-dump schemes involving five over-the-counter (OTC) companies.

Paolucci pleaded guilty in September 2019 in the U.S. district court for the Eastern District of Pennsylvania, and was ordered to serve 84 months in jail and forfeit US$2 million.

The OSC is now seeking an enforcement order against Paolucci on the basis that the former Mississauga, Ont. resident’s offences involved securities.

“Staff seek an inter-jurisdictional enforcement order reciprocating Paolucci’s conviction,” the OSC said in its allegations.

The proposed regulatory sanctions involve trading and registration bans in Ontario.

Paolucci has 28 days to respond to the OSC’s allegations in a written hearing, or 21 days to request an oral hearing instead.