A former fund manager has been sentenced to three years in jail after admitting to fraud and forgery in connection with a failed investment scheme.
The Ontario Securities Commission (OSC) said Wednesday that Keith Summers, who ran Tricoastal Capital Partners LLC and Tricoastal Capital Management Ltd., received a three year jail sentence, and was ordered to pay US$4.33 million in restitution, after pleading guilty to one count of fraud over $5,000 and one count of uttering a forged document.
Summers has already been banned for life by both the OSC and the U.S. Securities and Exchange Commission (SEC), and has disgorged the $1.4 million that was remaining in the Tricoastal accounts after his scheme unwound. (See OSC bans Tricoastal Capital manager, investmentexecutive.com, September 5, 2014.)
According to the regulators, Summers raised about $4.7 million, primarily from U.S. investors, for a trading scheme that ultimately failed. The OSC says that Summers admitted that he sold Tricoastal securities and defrauded investors through improper use of their funds, and for not disclosing his trading losses. He also admitted that he issued false financial statements as part of the scheme.
After the fraud was discovered by one of his investors, Summers reported his activities to the OSC, which led to an investigation by its new Joint Serious Offences Team (JSOT, which was established along with the RCMP and OPP Anti-Rackets Branch). And, this ultimately led to the regulatory and criminal proceedings.