On August 2, the Ontario Securities Commission released written reasons following its order of July 14, extending temporary cease trade and exemption removal orders in place against Momentas Corp.

The extension order remains in place until the conclusion of the hearing or until Momentas becomes registered as a limited market dealer and its officers, directors and/or employees involved in the sale of securities to the public become registered in accordance with Ontario securities law.

The OSC issued the order on the basis that Momentas had been acting as a market intermediary without being registered under Ontario securities law.

The individual respondents, Suzanne Morrison, Howard Rash and Alexander Funt, previously consented to an extension of a temporary cease trade and exemption removal order until the conclusion of the hearing.

Between August 2003 and May 2005, Momentas raised approximately $6 million through the sale of its convertible debentures. In its written reasons, the OSC concluded that by remunerating employees for the sole purpose of raising capital through the sale of its own securities, Momentas had been acting as a market intermediary and distributing securities without being registered.

The OSC further concluded that Momentas had been acting as a market intermediary by using investors’ funds to trade professionally in fixed income securities, equities and foreign currencies in order to generate the funds necessary for Momentas to pay the returns promised on its own convertible debentures.