Executives at a tech startup that overpromised and underdelivered have been sanctioned for allegedly misleading investors.
Ontario’s Capital Markets Tribunal approved a proposed settlement between Steer Technologies Inc., a trio of executives at the company, and staff of the Ontario Securities Commission (OSC), that will see them pay a combined $415,000 in monetary penalties, and $85,000 in costs, along with other sanctions.
The sanctions follow admissions that the company violated securities rules when it issued press releases that made a series of promises that the company failed to deliver on.
Those promises related to the company’s Covid-19 contact tracing technology, known as TraceScan, which included a platform for tracking possible infections using Bluetooth signals, and a wearable device that could also be used for contact tracing and collecting other health information.
According to the OSC, the company overstated the capabilities of the technology and its launch dates in its news releases.
Additionally, the regulator alleged that the company signed a consulting deal with Medtronics Online Solutions Ltd. to help out with marketing and business strategy. During that time, the CEO of Medtronics made overly promotional online posts about Steer on a website, OilPrice.com, where the CEO was also an editor. The company failed to correct those biased posts, the OSC alleged.
As a result, the company has been fined $300,000, ordered to pay $40,000 in costs, and to undergo a corporate governance review.
The company’s former chair and CEO, Sayanthan Navaratnam, was fined $75,000 and is banned from serving as a director or officer of a company other than Steer for three years.
The other executives — CEO Suman Pushparajah and vice-president and director Junaid Razvi — agreed to two-year director and officer bans.
Razvi was also fined $40,000, and all three of the executives must pay $15,000 in costs. Razvi and Navaratnam also have to complete courses on disclosure.