The Ontario Securities Commission (OSC) Monday handed down its sanctions in an illegal distribution case that was decided earlier this year.

Back in February, the OSC ruled that several companies, and individuals at those companies, traded without registration and carried out an illegal distribution in the securities of Majestic Supply Co. Inc. The respondents in the case also included Suncastle Developments Corp., CBK Enterprises Inc., Herbert Adams, Steve Bishop, Mary Kricfalusi and Kevin Loman. An OSC panel also found that Majestic made prohibited promises about a possible stock exchange listing, among various other violations of securities law. (See Investment Executive, Illegal distribution of Majestic shares raised $5.3 million, February 25, 2013).

On Monday, the OSC handed down its sanctions in the case, ordering permanent trading bans against Majestic and Suncastle, $200,000 administrative penalties each against the firms, $1.8 million in disgorgement against Suncastle, and $50,000 in costs against Majestic along with $75,000 against Suncastle. CBK received a five year ban, a $10,0000 penalty and $5,000 in costs.

Trading and registration bans ranging from eight to 20 years were levied against Adams, Bishop, Loman and Kricfalusi. Additionally, Adams was ordered to pay a $300,000 penalty, Bishop is to pay $100,000, Loman must pay $75,000, and Kricfalusi has to pay $50,000 as administrative penalties. It also ordered $516,000 in disgorgement against Adams, that Loman should disgorge $145,250, and Kricfalusi is to disgorge $60,000. Costs orders were also levied against them, with Adams to pay $75,000, Bishop to pay $50,000, Loman ordered to pay $30,000, and Kricfalusi required to pay $20,000.

The penalties were generally in line with what was requested by OSC staff, although the panel did hear submissions from several of the respondents seeking lower sanctions, and it did take several possible mitigating factors into account. Ultimately, it said in its decision, “We consider that it is important in this case to impose sanctions that reflect the seriousness of the securities law violations that occurred in this matter and that will deter the respondents and like-minded individuals from engaging in future conduct that violates securities law.”