The Ontario Securities Commission has fined the management of an online investment relations firm $125,000 for misleading the public through anonymous posts on online discussion forums, among other activities.

On Friday, the OSC approved a settlement agreement with Agoracom Investor Relations Corp., Agora International Enterprises Corp., and the companies’ management, George Tsiolis and Apostolis Kondakos.

Based in Toronto, AIRC and AIEC are collectively known as “Agoracom,” and provide online investor relations services for public companies whose securities are publicly listed in Canada. The companies’ online content includes webcasts, blogs, a private messaging service and discussion forums relating to the issuers’ securities, which are open to the public.

The OSC found that between September 2006 and July 2009, Tsiolis and Kondakos required their representatives to post anonymously to online forums using aliases. The reps created fictitious usernames and posed as investors blending in with other users, investors and interested persons.

Agoracom reps had dozens of aliases and were required to make up to two posts per forum per day. Altogether, more than 670 alias user names were created by Agoracom reps, and more than 24,000 alias posts were created from within Agoracom on client and non-client discussion boards.

Neither public users nor the majority of Agoracom’s clients were aware that Agoracom reps were posting using aliases.

This posting activity was undertaken, in part, “to create an appearance of greater interest in the securities of some of Agoracom’s clients,” according to the OSC.

The commission also found that Kondakos used the company’s private messaging service in a way that was contrary to the public interest. From July 2008 to February 2009, Kondakos intercepted private messages sent between public users for the purpose of gathering information about reporting issuers and issuers, in which he was personally invested.

Under the settlement agreement, Tsiolis and Kondakos are permanently prohibited from becoming or acting as directors or officers of any client of Agoracom or its affiliates or subsidiaries. They are also prohibited from trading or investing in any Agoracom client, except for options or placements that are part of a contractual compensation arrangement.

They are also prohibited from becoming or acting as a director or officer of any reporting issuer, registrant or investment fund manager for five years.

Tsiolis and Kondakos are also ordered to pay $125,000, to be allocated for the benefit of third parties, and costs of $25,000.

The OSC has also terminated the registration of Agoracom Capital Inc. – a firm with which Tsiolis and Kondakos were registered as officers, directors and dealing representatives under the exempt market dealer category.

The registrations granted to Tsiolis and Kondakos have been suspended for 10 years, and the individuals are prohibited from acting as registrants or investment fund managers 10 years.

IE