The Ontario Securities Commission on Thursday issued its reasons in the matter of Lydia Diamond Exploration of Canada Ltd., Jurgen von Anhalt and Emilia von Anhalt.
The commission reached its decision on Nov, 19, 2002 following a 12-day hearing.
At that time, the commission ordered that the von Anhalts cease trading in securities for 12 years, resign all positions held as Directors or officers of any issuer, be prohibited from becoming or acting as an officer or Director of any issuer for 15 years and be reprimanded.
They were also ordered to pay costs of $100,000 each.
The commission ordered that Lydia cease trading in securities, except as specifically permitted, for three years and be reprimanded. Lydia was also ordered to pay costs of $25,000.
In its reasons, the commission found that:
- Lydia and the von Anhalts traded in securities of Lydia while unregistered and without a prospectus;
- Lydia misled staff of the commission;
- Lydia paid undisclosed commissions for the sale of Lydia shares;
- the von Anhalts used funds other than for proper corporate purposes; and
- the von Anhalts, as Directors of Lydia, authorized, permitted or acquiesced in the contraventions of the Act by Lydia.
The commission said it was satisfied “on clear and cogent facts” that “based on the von Anhalts’ conduct in the past, it was likely they would continue to behave in character in the future, with little regard for good business practices and the requirements of securities law.”
The commission found that Lydia was “tainted by the conduct of the von Anhalts” and crafted an order “designed to strike a balance between the interests of the respondents and the interest of the public”.