Ontario’s Capital Markets Tribunal has banned a British Columbia resident who was sanctioned in the U.S. for his role in an alleged pump-and-dump scheme.
Based on an application brought by the Ontario Securities Commission (OSC), the tribunal issued an order permanently banning Bradley J. Moynes from trading and from acting as a director or officer of an issuer.
The order, which was issued Thursday based on written submissions from the OSC, without an opportunity for Moynes to be heard, followed a judgment of the U.S. District Court in Massachusetts in 2023, which imposed sanctions on Moynes, including both monetary sanctions and market prohibitions.
Without admitting or denying the allegations set out in a complaint from the U.S. Securities and Exchange Commission (SEC) in 2022, Moynes consented to a final judgment and waived any right to appeal.
Among other things, the court’s order permanently banned him from dealing in penny stocks, banned him from serving as a director or officer and restricted his trading to listed securities in his personal accounts. He was also ordered to disgorge US$1.3 million and to pay a penalty of more than US$200,000.
The U.S. sanctions arose from allegations that Moynes participated in a pump-and-dump scheme involving a couple of companies — Digatrade Financial Corp. and Formcap Corp. — penny stocks that traded in the over-the-counter markets in the U.S.
Moynes served as president of Formcap and as CEO of Digatrade, and allegedly used offshore nominee companies to conceal his ownership in those firms, the regulator said.
The SEC alleged that he was involved in a scheme to pay promoters to tout the companies’ stock and that he sold his stock into the artificially-inflated trading activity — a scheme that allegedly generated almost US$6 million in illicit proceeds, including US$1.3 million for Moynes and Digatrade, much of which was directed to Moynes’ B.C.-based company, Vancap Ventures Inc.
“Those circumstances are sufficient to engage the Tribunal’s public interest jurisdiction,” the OSC argued in its application for enforcement proceedings, noting that it’s not necessary for the case to have a connection to Ontario for the tribunal to exercise its jurisdiction and take protective action.
“Moynes poses a risk to Ontario investors,” it said, adding that a protective order “is necessary to protect the public interest and safeguard the integrity of Ontario’s capital markets.”