An Ontario Securities Commission (OSC) panel has concluded that several companies and their management traded without registration and engaged in an illegal distribution, among other violations.

The OSC panel issued its decision Monday in a case against several firms, Majestic Supply Co. Inc., Suncastle Developments Corp. and CBK Enterprises Inc., and several individuals involved with those firms (Herbert Adams, Steve Bishop (a former rep with a mutual fund dealer and a limited market dealer), Mary Kricfalusi and Kevin Loman).

In its decision, the panel found that the respondents in the case traded in securities of Majestic (a purported maker of environmentally-friendly printing products) without registration, and engaged in an illegal distribution of securities. Additionally, the panel ruled that Majestic made prohibited promises about a possible stock exchange listing, among various other violations that breached securities law and was contrary to the public interest.

The panel also rejected a few of the allegations made in the case, and a couple of them were withdrawn by OSC staff at the hearing, it notes.

According to the decision, OSC staff alleged that the respondents distributed Majestic securities to investors raising approximately $5.3 million from approximately 134 investors through: loan agreements, loan conversion agreements (L&C) and promissory notes; the issuance of shares from treasury; and, secondary sales of Majestic shares. And, that in doing so they engaged in a distribution of shares without filing a prospectus.

The panel found that the shares of Majestic, the L&C agreements and the rights of conversion of debt to shares arising from those agreements constitute securities; and that Majestic and Suncastle, and their representatives, “actively solicited and induced the sales of Majestic shares”; and that they weren’t registered to do so, and couldn’t rely on the available exemptions, thereby violating securities law.

The panel didn’t order any sanctions. It has set a the hearing to determine sanctions and costs for March 15.