An Ontario Securities Commission (OSC) hearing panel found that a foreign-exchange trading scheme violated securities law and was contrary to the public interest.
The OSC ruled that Rare Investments, Ramadhar Dookhie, and Evgueni Todorov, breached securities laws and acted contrary to the public interest when they solicited over $1.2 million from investors to fund a forex trading scheme. In return, the investors received promissory notes that carried a monthly interest rate of between 1% and 3%.
According to the decision, “investors were led to believe that the respondents developed a leveraged forex trading strategy that could produce an attractive potential return on investment, and that half of their investment would be secured in guaranteed investment certificates (GICs).”
However, the ruling indicates that almost $700,000 was lost in trading, several hundred thousand dollars were paid to the respondents and others, and $275,000 was put into GICs.
Ultimately, the panel ruled that the notes amounted to securities that were issued without a prospectus or an exemption, and that the respondents traded without registration. This amounted to several securities law violations.
A hearing to consider sanctions in the case will be held on August 28.