An alleged scheme that defrauded 51 investors of $31 million has led to charges against two men from Mississauga and Hamilton.
The Ontario Securities Commission (OSC) alleges that from 2012 to 2019 two men defrauded the investors through Strike Holdings Inc. based on claims they would use the money to trade with an advanced algorithm.
The OSC is an independent Crown corporation that regulates Ontario’s capital markets by making rules and enforcing law and by adopting policies that influence the behaviour of capital markets participants.
The accused allegedly misled investors by providing forged trading account statements showing highly profitable returns.
The two are alleged to have taken more than $11 million from the scheme personally, while the balance of funds was depleted primarily through expenses, fees and investor returns.
Additionally, the OSC alleges that from to 2021, the pair re-victimized Strike investors.
The accused are alleged to have falsely told investors that USD $97 million had gone missing from Strike’s TD Bank accounts.
Based on this misrepresentation, they raised more than $900,000 by selling debentures to 20 existing Strike shareholders for the purpose of pursuing legal action to recover the missing funds. Instead, proceeds from the debenture offering were depleted through trading and commissions until the OSC intervened to halt the scheme. OSC Enforcement staff froze cash and securities valued at more than CAD $730,000 and returned these funds to investors.
The two are also alleged to have made misleading or untrue statements by issuing forged trading account statements to their investors throughout the two schemes, as well as to TD Bank in pursuing their false claim that USD $97 million had been lost.
Insauga reported that Michael Aonso of Mississauga and Kevin Carmichael have been charged with:
- “Two counts each of engaging in an act, practice or course of conduct related to securities that they knew or reasonably ought to have known perpetrated a fraud on investors, contrary to s. 126.1(1)(b) of the Act;
- Two counts each of illegal distribution of securities, contrary to s. 53(1) of the Act;
- Two counts each of unregistered trading in securities, contrary to s. 25(1) of the Act; and,
- One count of making a statement that they knew or reasonably ought to have known was misleading or untrue and would reasonably be expected to have a significant effect on the market price or value of a security, contrary to s. 126.2(1) of the Act.”
They are scheduled to appear in court on this matter on April 5.
This article was originally sourced by www.insauga.com.