The Ontario Securities Commission (OSC) settled its first-ever enforcement case against a geologist accused of falsifying mining assay results under mining disclosure rules created in the wake of the Bre-X scandal.

The OSC said Thursday it has approved a settlement agreement with Bernard Boily, an experienced geologist with junior miner, Bear Lake Gold Ltd., that will see him permanently banned from acting as a director and officer of an issuer and from registration; paying an administrative penalty of $750,000, along with $50,000 in costs; and agreeing to a 15-year trading ban (apart from his locked-in retirement account). The settlement avoids a contested hearing in the case, which was scheduled to start on April 8.

According to the settlement, Boily admitted that between December 2007 and July 2009 he: altered certain assay results received by Bear Lake; drafted press releases for the company that contained the incorrect data, which was then issued to the market; and, that he provided independent geologists, who were retained to prepare a technical report for Bear Lake, with the altered results, among other misconduct.

In doing so, Boily admitted to perpetrating a fraud; breaching the prohibition against issuing misleading and untrue statements to the market; creating an artificial price for Bear Lake securities; and, conduct that was both contrary to the public interest and abusive.

Once the altered data was uncovered and the results reported to the market, the company lost $42 million in market cap. However, the deal also notes that Boily didn’t personally profit from the false results.

The commission says that this is its first case dealing with the conduct of a gatekeeper of technical information under mining disclosure rules, which were developed in response to the massive Bre-X salting scandal that was uncovered in the late 1990s, and are designed to ensure the integrity of technical disclosure by mining firms.

“The terms of this settlement send a strong message that the commission will not tolerate misconduct by qualified persons, particularly conduct which runs contrary to the important gatekeeper role played by qualified persons in the securities disclosure regime,” said Tom Atkinson, director of enforcement at the OSC.