The Ontario Securities Commission has permanently banned two men from Ontario capital markets for selling unregistered bonds in an investment scheme that raised over $4 million.
On Thursday, an OSC panel released its decision on sanctions and costs against Maple Leaf Investment Fund Corp., Joe Henry Chau, Tulsiani Investments Inc. and Sunil Tulsiani.
In its earlier decision on the merits, the OSC panel found that the men and their companies had committed multiple breaches of the Ontario Securities Act arising from the sale of unregistered Maple Leaf bonds to members of the public, which raised over $4 million from over 80 investors in an investment club, primarily from Ontario. The OSC panel concluded that their conduct of “was egregious and dishonest, and that they preyed on vulnerable investors, many of whom did not understand the purported investments.”
Sale of Maple Leaf bonds breached Securities Act: OSC
The OSC panel found that Maple Leaf and Chau misled potential investors by providing false and incomplete information and that they diverted funds, knowingly placing investors’ funds at risk.
In its decision on sanctions and released Thursday, the OSC panel found that “the respondents cannot be trusted to participate in the capital markets.”
In addition to the permanent bans, the OSC panel ordered that Chau pay an administrative penalty of $450,000, while he and Maple Leaf must disgorge $3,062,106 and pay costs of $163,700.
Tulsiani must pay an administrative penalty of $200,000, and he and Tulsiani Investments must disgorge “on a joint and several basis together with Chau and MLIF, the amount of $70,000”. Tulsiani and Tulsiani Investments must also pay costs of $81,800.