The Ontario Securities Commission (OSC) has scheduled a hearing to consider sanctions against an Ontario-based firm that was found to be selling unregistered securities by regulators in Connecticut last year.
The OSC said Wednesday it will hold a hearing on June 26 to consider allegations brought today against Powerwater Systems, Inc. (PSI), Powerwater USA Ltd. (PUL), and PSI president and CEO, Duncan Cleworth, based largely on an order of the Connecticut Department of Banking (CDB) that was handed down in October 2013.
According to the OSC’s allegations, the CDB found that PSI and Cleworth offered and sold unregistered securities, and that PUL materially aided these violations. It also found that this conduct constituted a fraud, and that Cleworth traded without registration.
The accused failed to appear at the CDB hearing, the OSC says; and, the allegations against them were deemed admitted. In terms of sanctions, the CDB ordered permanent cease trades against each of the accused; along with fines of US$225,000 against both Cleworth and PSI; and, a US$200,000 fine against PUL.
Now, OSC staff are seeking an inter-jurisdictional enforcement order reciprocating the CDB’s order. The OSC notes that PSI and Cleworth are both based in Ontario, and PUL is based in Connecticut; and, it says that none of them have been registered, or exempt from registration.
The OSC’s allegations against Cleworth and the two companies have not been proven.