The Nova Scotia Securities Commission has fined two men $500,000 each for soliciting investments without being registered, failing to file a prospectus before distributing securities and engaging in unfair practice.
The NSSC ordered sanctions against Quintin Sponagle and Trevor Hill including penalties of $500,000 each, the maximum fine at the time the trades were committed.
The commission says if it could issue the ruling under current regulations, it would have fined Sponagle $3.1 million and Hill almost $2.1 million.
Between April and September 2006, Sponagle and Hill made securities trades resulting in Jabez Financial Services, Inc. receiving more than $4 million from 137 residents of Nova Scotia and 52 residents of other provinces.
Sponagle spent money investors sent to Jabez on himself, and indulging friends, relatives and business associates including Hill and his family.
The commission determined the pair’s actions constituted a “deceptive and dishonest ruse, designed to extract money from trusting and unsuspecting Canadian investors. It was in the nature of a ‘ponzi scheme’. Mr. Sponagle was the mastermind of this scam, and his breaches of the Securities Act in this case are extremely egregious and among the most serious possible breaches of the act.”