The Alberta Securities Commission has permanently banned three people and ordered more than $1.35 million in fines, disgorgement and costs, in connection with a failed day trading scheme.

An ASC hearing panel found that a Calgary man, David Wayne Magee, his son, Ryan Steve Magee, and Ryan’s wife, Dalyne Rae Magee, along with two companies that they controlled, Master Daytraders Inc. and Magee International Inc., illegally traded and distributed securities.

The panel also found that Ryan Magee made misleading statements to investors and perpetrated a fraud on them by misstating his trading record and using investor funds to pay personal expenses.

According to the panel, the respondents largely admitted the allegations against them. They admitted to raising more than $2 million from approximately 29 investors between March 2010 and August 2013 in a scheme to pool those funds and day trade through a brokerage account. According to their admissions, almost $900,000 of that was diverted for personal expenses; about $100,000 was used to repay certain investors; and, most of the rest was lost in trading.

The panel ordered that the Magees collectively disgorge the $893,837 that was siphoned off for personal expenses, that Ryan pay a $200,000 penalty. David was ordered to pay $75,000, and Dalyne was ordered to pay $50,000. All three are permanently banned in Alberta, as are the two companies. All five respondents were also ordered to pay $142,000 of the investigation and hearing costs.

In handing down the penalties, the panel noted that it believes that the respondents pose substantial risk of future harm to investors and the capital markets.

“The respondents were able, with seeming ease, to raise over $2 million from investors, and the individual respondents benefited significantly from their misconduct,” the panel stated. “Among the investors who were harmed, and whose trust was betrayed, were close family friends of the individual respondents. Moreover, none of the individual respondents recognizes fully, or in any appreciable measure, the seriousness of their respective misconduct or the resulting harm. Accordingly, we have serious concerns that the individual respondents could readily be tempted to repeat their misconduct.”