The Ontario Securities Commission (OSC) has handed down sanctions in a foreign exchange trading fraud case, ordering almost $1.1 million in disgorgement and $500,000 in penalties, along with permanent bans for the primary perpetrators.
Last year, an OSC panel found that a foreign exchange trading scheme involving a firm called New Found Freedom Financial (NFF) was essentially a Ponzi scheme, which raised approximately $1.8 million from 57 investors (of this, about $700,000 was used to fund monthly payments to earlier investors, among other things). The panel found that NFF, and its founders, Ron Deonarine Singh and Wayne Gerard Martinez traded without registration, distributed securities without a prospectus, and perpetrated a fraud.
Forex trading scheme a fraud, OSC panel rules
On Thursday, the panel it handed down sanctions in the case, ordering that they be permanently banned from the markets, banned from trading, registration and serving as directors and officers. It also ordered that Singh and Martinez must each pay an administrative penalty of $250,000; that NFF, Singh and Martinez are jointly liable to disgorge $1,071,269; and that they must pay $85,856 in hearing costs.
As for a mortgage agent who directed some clients to the firm, Pauline Levy, the panel found that she also traded without registration and distributed securities without a prospectus. Today, the commission ordered that she is banned for five years, ordered to pay an administrative penalty of $5,000; to disgorge $59,849; along with $5,000 in costs. OSC staff sought a $15,000 penalty against her, but the panel ordered less, noting that she was deceived by Singh and Martinez, and that she took active steps to try and recover money for her clients.