The Ontario Securities Commission (OSC) has ordered over $1.4 million in sanctions and a 10-year trading ban against a man for misleading investors.
The OSC released its decision Tuesday following a hearing on sanctions against FactorCorp Inc. (FCI), FactorCorp Financial Inc. (FFI) and the companies sole officer and director, Mark Twerdun. Earlier this year, the OSC ruled that the sale of more than $50 million in FFI debentures to over 600 investors were made in violation of securities laws, including offering documents that made misrepresentations to investors and with improper reliance on exemptions. (See Investment Executive, OSC panel releases FactorCorp decision, February 25, 2013.)
On Tuesday, the commission ordered that FCI, FFI and Twerdun shall cease trading for 10 years. Twerdun is also permanently banned from serving as a director, and is ordered to disgorge $420,000, to pay an administrative penalty of $750,000, along with costs of over $250,000.
The decision notes that OSC staff sought “significant sanctions” against Twerdun “given the serious nature of his misconduct”; and asked that it consider the impact on investors, who only received 4¢ on the dollar for their losses. Commission staff didn’t seek monetary sanctions against the companies to avoid depleting assets that could be returned to investors, it says.
According to the decision, Twerdun argued that the sanctions requested were “unjust and extreme”; that he has shown remorse, and relied on counsel to ensure compliance with securities laws.
The OSC sided largely with its staff, finding that, “it is appropriate to impose a significant administrative penalty against Twerdun given his misconduct…” and, adding, “These infractions are particularly significant in light of Twerdun’s experience as a registrant for more than 12 years. In my view, a significant administrative penalty is necessary to deter Twerdun and others in a similar position from engaging in similar misconduct.”