The Ontario Securities Commission (OSC) has permanently banned a pair of men and their two companies and ordered more than $2.5 million in disgorgement, penalties and costs, after finding that they defrauded investors in an illegal distribution scheme.

An OSC panel on Tuesday ordered permanent bans against Joseph Compta and Timothy German in connection with the unregistered sale of shares in Bradon Technologies Ltd., by German and his company, Ensign Corporate Communications Inc. Compta was the founder, president and director of Bradon.

Last year, an OSC hearing panel ruled that the respondents committed several securities law violations including unregistered trading, illegal distribution, and fraud when German and Ensign sold $1.75 million in Bradon shares without a prospectus, or registration. Of this, about $125,000 was returned to five investors; the rest has apparently been lost.

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Following a sanctions hearing, the OSC panel ordered the pair and their two companies permanently cease trading, and that Compta and German be banned from registration and from serving as a director or officer.

In handing down the permanent bans on Tuesday, the OSC panel cited the “serious nature” of the pair’s misconduct, and “their failure to acknowledge or recognize their fraudulent conduct and the financial and emotional harm that such conduct has caused.”

“Their apparent lack of insight in this regard gives rise to a material apprehension that they are likely to engage in similar conduct in the future if given the opportunity to do so,” the panel added.

Additionally, the panel ordered: German pay an administrative penalty of $500,000; Compta pay a penalty of $300,000; German, Compta, Ensign and Bradon disgorge $263,000, on a joint and several basis; and German and Ensign disgorge $1.37 million, on a joint and several basis.

The OSC panel also ordered German and Ensign pay almost $200,000 in costs, and that Compta and Bradon pay $84,000 in costs.

“The conduct of the respondents, which harmed the investors both emotionally and financially, was reprehensible,” the panel said. It added that civil proceedings initiated by some of the investors, “has failed to provide redress”.