The Ontario Securities Commission (OSC) has ruled that a scheme that raised $1.2 million from investors to buy into luxury vacation properties was fraudulent.
The OSC issued its decision and reasons last week in the case of Moncasa Capital Corp., and its president and sole director, John Collins.
The commission found that Moncasa and Collins traded without registration, carried out an illegal distribution, committed fraud and violated the public interest, among other things.
OSC staff alleged that between April 1, 2008 and May 16, 2011, more than 50 investors in Ontario and elsewhere in Canada, were sold approximately $1.2 million worth of securities, purportedly to purchase luxury vacation properties in the Caribbean for rental purposes. However, the firm did not own any properties, and all but $7,650 of the funds raised from investors was expended for other purposes.
As a result, the OSC concluded that, “The investment scheme perpetrated by Moncasa and Collins was fraudulent.”
It said that Moncasa misled investors, that investors were deprived of their funds as a result of false and misleading statements, and that it also deceived investors by allowing its salespeople to use aliases and to engage in high pressure sales tactics.
The OSC also found that Collins — who was not registered, but had previously been registered as a salesperson with penny stock dealer, Marchment & Mackay Ltd. between 1994 and 1997; and later with C.J. Elbourne Securities Inc. from 1997 to 2000 — deceived investors by misrepresenting his qualifications, expertise, and experience and Moncasa’s business activities and use of funds.
The OSC didn’t levy any penalties, setting July 11 as the date for a sanctions hearing. The decision noted that no one appeared for Moncasa or Collins in order to defend the allegations.