An Ontario man has received another six months in jail for breaching cease trade orders and trading without registration, on top of the three years he already received for securities law violations back in 2011.
The Ontario Securities Commission (OSC) announced today that Abraham Grossman was sentenced to six months in jail Tuesday after he pled guilty to two counts of breaching cease trade orders (CTOs) and one count of unregistered trading. He also received two years of probation and was ordered to pay $155,000 in restitution.
The new six month sentence is consecutive to a three-year sentence he received back in June 2011 for previous securities law violations, including unregistered trading, illegal distribution, and breaching a cease trade order in connection with an alleged boiler room operation. (See Investment Executive, OSC lays charges in fraudulent share gifting scheme, July 20, 2012.)
According to the OSC, in this latest case, Grossman admitted that between October 2009 and February 2011, he and his company, Strategic Gifting Group, ran a share gifting program involving trading in the securities of Dixon Perot & Champion Inc. (DPC Securities). Under the program, Grossman and Strategic Gifting arranged introductions between charities and donors, and were paid 90% of the cash donations received by the charities; and, in return, donors received inflated tax receipts. The OSC says that advisors recruited to promote the program were instructed to tell donors that they could receive tax receipts for between four and 12 times the value of their original cash donation.
Not only did the scheme involve unregistered trading in securities, but they also violated two temporary cease trade orders against Grossman, one which came into effect in 2006 and the other in 2008. Grossman continues to be subject to these cease trade orders, the OSC notes.