OSC permanently bans convicted fraudster

He was convicted before the Ontario Superior Court of Justice and sentenced to five years imprisonment on each of the three counts, to be served concurrently. It also ordered over $1.1 million in restitution.

On Monday, the OSC also permanently banned him from the securities markets, too, on the strength of the criminal conviction. He was accused of unregistered trading and advising, and making misrepresentations to investors.

In its decision, the OSC notes that the court found that Sanmugam held himself out as a licensed and educated “market commentator” and venture capitalist, who ran his own securities company, Bunting & Waddington. It says he targeted people who had no financial knowledge and who were not sophisticated in financial matters. In each case, they mortgaged their homes and gave him the proceeds to invest, which they ultimately lost.

The OSC says that the court found that “the conduct engaged by Sanmugam constituted a significant financial fraud, which totalled $1,109,405 and involved four investors over three discrete, consecutive periods of time.”

Sanmugam did not participate in the OSC’s hearing against him, in which OSC staff sought permanent bans against him, but did not pursue a disgorgement order, noting that it’s unrealistic that he’d pay a disgorgement order made by the commission, or the outstanding restitution orders of the court. So, it decided to focus on simply banning him from the markets, which the commission granted, noting that his conduct “was abusive to Ontario’s capital markets and warrants sanctions to be imposed.”