A panel of the Ontario Securities Commission (OSC) Thursday released its reasons and decision on sanctions, permanently banning Richvale Resource Corp. and its president, Pasquale Schiavone, from trading in securities for their roles in a mining fraud that bilked 27 Canadian investors out of $753,000.
In its decision, the OSC panel observed that “the respondents cannot be trusted to participate in the capital markets.”
The OSC panel ordered that Schiavone pay an administrative penalty of $300,000. Schiavone and Richvale were also ordered to jointly and severally pay a further $378,666 in disgorgement and costs.
The OSC panel found in its decision on the merits, released April 25, 2012, that of the $753,000 raised from investors, Richvale used only 6% of that amount for mining claims.
Richvale a “one-man boiler room”, says OSC panel
The remainder of the Richvale investor funds went to cash withdrawals, sales commissions, payments to directors, officers or employees, and undocumented loans to friends of employees.
According to the OSC panel, “Richvale had no underlying legitimate business.”
The remaining respondents in this matter, who settled with the SOC on October 14, were ordered to disgorge the remainder of the funds obtained as a result of the fraud.