The Ontario Securities Commission today commenced an application against Emilia von Anhalt and Jurgen von Anhalt regarding Lydia Diamond Exploration of Canada Ltd. The regulator says the von Anhalts have not complied with a 2002 order that prohibited them from voting or exercising any other right attaching to their shares of Lydia.

The application also seeks an interim order prohibiting the voting or exercise of any other right attaching to their Lydia securities on an interim basis.

According to the OSC, the von Anhalts have requisitioned a shareholders meeting for November 24, and the Commission seeks an order prohibiting them from exercising control over Lydia by electing the board of directors.

The von Anhalts have previously been the subject of enforcement action. On Nov. 19, 2002, the Commission issued an order which cease traded them for 12 years subject to terms and conditions and prohibited them from being directors or officers of any issuer for 15 years. They were also ordered to pay costs of $100,000 each.


The order addressed findings that the von Anhalts traded while unregistered, traded securities not qualified by a prospectus, and made materially misleading statements concerning trades of Lydia securities.

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”: