At a hearing held yesterday, the Ontario Securities Commission approved settlement agreements reached with Affinity Financial Group Inc., International Structured Products Inc. (ISP), Affinity Restricted Securities Inc. (ARS), Dionysus Investments Ltd, and Brian McWilliams, David Lewis and Louis Sapi, the principals of Affinity.

In the settlement agreements, Affinity and its related companies (ISP, ARS and Dionysus) admit that they engaged in unlicensed advising in securities by soliciting clients to invest in a product titled the “Rule 144 Loan Program”. McWilliams, Lewis and Sapi, admit that they acquiesced in Affinity’s breach of Ontario securities law.

The Rule 144 Loan Program involved sending investor funds to an entity in the United States called American Financial Group (AFG). Clients were led to believe that their funds would be used by AFG to make loans against restricted securities. In June of 2002, however, one of the principals of AFG disappeared and took the majority of the records relating to the program with him.

A receiver has been appointed by the American courts to attempt to locate and redistribute the investor funds entrusted to AFG, but to date no funds have been redistributed.

In approving the settlement agreements, the OSC made an order terminating the registration of ISP, McWilliams and Lewis under Ontario securities law, and requiring Affinity, ARS and Dionysus to cease trading in securities permanently.

McWilliams, Lewis and Sapi are permanently prohibited from becoming directors or officers of any registrant, and were each ordered to pay $10,000 towards the costs of the investigation of this matter. Lewis’ settlement agreement will not take effect until Oct. 1, 2005, pending receipt of his costs payment.