The Ontario Securities Commission (OSC) is alleging unregistered trading and an illegal distribution of securities by Onix International Inc. and Tyrone Constantine Phipps.
The OSC announced that it will hold a hearing on April 3 to consider the allegations, which have not been proven.
According to the commission’s notice, Onix International was incorporated by Phipps in February 2009 to enter into a business relationship with ENC Security Systems Inc. to market and sell ENC’s encryption software. And, starting in March 2009, it says they began selling royalty units to the public to raise capital to fund the ongoing operations of ENC. It says they raised approximately $436,000 from 29 investors. Then, in April 2009, it says they also began selling royalty units to fund Onix’s operations, which raised approximately $232,000 from 17 investors.
“Neither Onix International nor Phipps was registered to trade in securities and the securities at issue were not qualified by a prospectus,” it says. And, it alleges that, as a result, they violated the securities laws by trading without registration and distributing securities without a prospectus.