One of the fraudsters who misled investors in a purported automated trading scheme has been ordered to pay $22.7 million in restitution and spend four years in jail.
In 2022, the Ontario Securities Commission (OSC) announced charges against Kevin Carmichael of Hamilton, Ont., and Michael Aonso of Mississauga, alleging that between April 2012 and June 2019, they defrauded investors by raising $31 million through their company, Strike Holdings Inc., for an algorithmic trading strategy.
The OSC alleged they misled investors with forged account statements that showed highly profitable trading, diverted more than $11 million for personal use, and spent most of the remaining funds on fees, expenses and paying returns to select investors.
Additionally, the regulator alleged they raised another $900,000 by falsely claiming $97 million was missing from the company’s trading accounts and that funds were needed to pursue legal action.
Both men pleaded guilty to certain charges. Carmichael has now been sentenced to four years in jail and ordered to pay $22.7 million in restitution to harmed investors. Aonso is scheduled to be sentenced on Sept. 23.
“Mr. Carmichael’s actions had a profound impact on investors, creating stress and hardship in the lives of hard-working people who put their trust in him,” said Bonnie Lysyk, executive vice-president, enforcement, at the OSC, in a release.
“Misleading investors through falsified reports is illegal, and the OSC will continue to take action to protect investors and the integrity of our capital markets,” she added.