The OSC issued its decision on Wednesday on allegations against Bradon Technologies Ltd., the company’s founder, Joseph Compta, Ensign Corporate Communications Inc., and Ensign’s sole shareholder, Timothy German. The four respondents were accused by OSC staff of breaching securities law, committing fraud, and violating the public interest.
According to the decision, between Dec. 28, 2007 and April 20, 2011, German purported to sell Bradon shares to at least 46 investors for an aggregate price of $1.75 million. However, of that total, only $808,000 was used by German to subscribe for Bradon shares, the decision says. Instead, $125,000 was returned to five of the investors; and, more than $800,000 is unaccounted for, it notes.
Indeed, most of the investors have not received any of their money back. “It appears that investors have all suffered a complete loss of their investment. Some of them have lost their life savings,” the decision says.
Although most of the victims discussed in the decision are described as unsophisticated investors, one of the victims is an experienced financial advisor, who lost all of the money he invested in Bradon, the decision notes.
German and Ensign repeatedly breached securities laws in purporting to sell Bradon shares to investors and by making prohibited representations to investors, and they committed fraud, the panel found.
“There was compelling evidence that established that German and Ensign engaged in fraud through an intentional, ongoing and extended course of conduct of deceit and falsehoods that caused substantial harm and deprivation to investors,” the decision says.
Compta and Bradon committed fraud when dealing with certain investors, and, knew, or ought to have known, that German was committing fraud, the panel found.
As well, all of the respondents acted contrary to the public interest, the panel ruled.
A hearing on sanctions and costs in the case will follow at a later date.