The Ontario Securities Commission has released its decision regarding a “prime bank” scheme run by First Federal Capital (Canada) Corp. and Monte Friesner.

The OSC issued initial cease trade orders regarding the scheme back in December 2000.

The OSC says it examined the contents of a Web site operated by First Federal, as well as written materials sent to potential investors. The materials contained references to a number of financial products, including “Asset Securitization Management Portfolios” and “prime bank guarantees”, referred to collectively as “Trading Programs”.

In its decision the Commission wrote: ” It is clearly a scheme that, simplistically speaking, says: ‘Give us your money. We’ll find others to invest it for you in accordance with our Trading Program. We have access to experts who know what they’re doing although the vast majority of persons have no idea. The returns you’re going to make are fantastic.’ “

The OSC concluded that the materials contained “misleading representations and exorbitant investment promises”. It went on to find that First Federal and Friesner had engaged in illegal trading and advising in securities by operating the Web site and distributing the materials.

In determining the appropriate sanctions in this case, the OSC says it reviewed evidence of Friesner’s criminal record, including previous convictions on fraud-related charges in both Ontario and the United States. It characterized the conduct of the respondents as “reprehensible”.

As a result, the OSC ordered that First Federal and Friesner must both cease trading in securities permanently, and banned Friesner from ever acting as corporate officer or director. In addition, both First Federal and Friesner must pay the costs of the OSC’s investigation. The final amount of costs will be determined at a hearing to be scheduled later.