The Ontario Securities Commission (OSC) has reciprocated permanent bans handed down by the Alberta Securities Commission (ASC) in an alleged Ponzi scheme case.
The OSC released a decision Monday indicating that it has permanently banned Transcap Corp. (TCC), Strata-Trade Corp. (STC), Dale Joseph Edgar St. Jean, and Gregory Dennis Tindall reciprocating an order handed down by the ASC after a hearing panel ruled last year that they perpetrated a fraud, and that St. Jean and Tindall each made materially misleading or untrue statements, among other violations. (See Investment Executive, ASC issues sanctions over Ponzi scheme, July 30, 2013).
The OSC reports that the respondents raised approximately $52 million from investors through interest bearing bonds or promissory notes issued by TCC and STC, promising returns of 15% to 22% per year. However, it says that returns paid to investors were funded by fellow investors’ money, “in what the ASC panel deemed ‘an unsustainable Ponzi scheme’,” the OSC notes in its decision.
They were banned by the ASC, along with other sanctions. And, the OSC sought to reciprocate those bans based on the ASC’s findings against them. The respondents in the case didn’t make any submissions to the OSC, which ruled in favour of OSC staff; ordering its own permanent bans, citing the need to protect the public interest.
“The respondents’ conduct involved perpetrating a fraud on investors. Both respondents by their conduct have demonstrated that they should not be permitted to freely participate in the Ontario capital markets,” it says in its decision.