The Ontario Securities Commission has ordered four individuals to pay fines totaling $2.1 million for operating a major fraudulent investment scheme through three corporate entities.

In a decision released on Friday, the OSC outlined penalties against David Campbell, Abel Da Silva, Eric O’Brien and Julian Sylvester. None of the individuals were registered with the commission in any capacity.

Their misconduct involves three Ontario-based corporations: Al-tar Energy Corp., of which O’Brien is the sole director, president and CEO, Alberta Energy Corp. and Drago Gold Corp., both of which Sylvester is the sole director. Da Silva and Campbell acted as agents for the corporations, and as salespersons for the corporations’ securities, according to the OSC.

The regulator found that all three corporations did not carry on any business other than raising funds from investors. While they were purportedly involved in the oil and gas and mining industries, the evidence revealed that none of them were involved in any legitimate business in any industry.

The corporations’ promotional materials, websites and press releases contained false and misleading information about fictitious activities, the OSC found.

According to the regulator, the four individuals distributed securities of the corporations without being registered, and when prospectuses hadn’t been filed to qualify the sale of the securities.

Da Silva and Campbell further breached securities laws by trading in the securities during a period in which the OSC had imposed cease trade orders against them.

The individuals used high-pressure sales tactics to distribute the securities, according to the OSC, calling investors on a repeated basis, promising highly lucrative returns, and indicating that there was only a limited time to invest.

Altogether, the individuals raised $658,109.03 from investors throughout Canada and Britain through the three corporations. The majority of these funds were transferred to accounts controlled by the individuals for personal use.

Investors were not paid back any of their funds.

The OSC has ordered Sylvester to pay a fine of $200,000; O’Brien to pay $500,000; Da Silva to pay $650,000; and Campbell to pay $750,000. They must also pay costs totaling $133,865.

The individuals, along with Alberta Energy and Drago, must also disgorge to the commission $658,109.03 – the total amount of funds raised from investors – which will be allocated to the investors.

In addition, each of the four individuals is prohibited from trading in or acquiring any securities permanently, must immediately resign all positions they hold as a director or officer of any issuer, and are prohibited permanently from becoming or acting as a director or officer of any issuer or registrant.

IE