The two men charged in the collapse of First Leaside Group have been hit with permanent bans, and more than $18 million in monetary sanctions, by securities regulators, the Ontario Securities Commission (OSC) announced on Thursday.
The OSC has issued its decision on sanctions in the case of David Phillips and John Wilson, who were found to have violated securities laws in connection with the failure of First Leaside.
At an earlier hearing, the commission found that the two men defrauded investors when they sold securities without disclosing a report expressing concern about the companies’ financial condition, and for making misleading statements to investors.
See: First Leaside pair breached securities law: OSC
On Thursday, the commission ordered sanctions in the case, including permanent bans against both men. Phillips was hit with a $700,000 administrative penalty, and Wilson was ordered to pay a $400,000 penalty. The men were ordered to disgorge $16.6 million ($8.8 million of which applies to Phillips alone), and to pay $340,867 in costs.
According to the decision, OSC staff sought a $1 million penalty against Phillips and $700,000 against Wilson; whereas the men argued for penalties of $300,000 and $150,000, respectively.
Ultimately, the commission determined that the penalties should fall in the middle, saying, “These amounts are proportionate to their misconduct and, together with the amounts that they are to disgorge, will deter them and other like-minded persons from engaging in similar conduct in the future.”