Perpetrators of an advance fee scheme were hit with a $450,000 monetary penalty, disgorgement, and other sanctions, by the Ontario Securities Commission (OSC), despite the fact that the regulator doesn’t know the true identity of one of them.
The OSC released its sanctions decision Thursday in a case that it brought against Lehman Brothers & Associates Corp., Greg Marks, and Kent Emerson Lounds, accusing them of carrying out an advance fee scheme relating to the securities of TBS New Media Ltd. and TBS New Media PLC.
After a hearing that was held in June and July 2011, which the accused did not attend, the OSC hearing panel found that they engaged in trading without registration; that Lehman Corp. and Marks made false and misleading statements to investors, which caused investors to pay US$146,760 in advance fees; that Lounds furthered the fraudulent acts of Lehman Corp. and Marks in the advance fee scheme by accepting US$121,260 from investors; and that they perpetrated a fraud on investors.
In its decision, the OSC ordered a $250,000 penalty against Marks, $200,000 against Lounds, disgorgement of $148,089, costs of $39,915, and permanent trading, registration, and director and officer bans.
However, in its decision, the commission indicates that in the original hearing it determined that Marks was actually an alias used to perpetrate a serious fraud. “The fact that this individual is known to the commission only by an alias does not detract from the public interest in imposing sanctions on that individual,” it says. “Indeed, the commission should not permit an individual to elude sanctions for serious contraventions of the Act simply by hiding behind a false identity.”