A gavel rests on its sounding block with a several law books and a justice scale out of fucus in the background. A cool blue cast dominates the scene. (A gavel rests on its sounding block with a several law books and a justice scale out of fucus in t
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A businessman and former mayoral candidate in Toronto has been permanently banned from the capital markets in Ontario in a settlement with regulators.

On Wednesday, the Capital Markets Tribunal approved a settlement between Xiao Hua (Edward) Gong and the Ontario Securities Commission (OSC) that will see Gong permanently banned (subject to certain carve outs) after he admitted to violating securities rules in connection with a scheme that resulted in a conviction for using forged documents and operating a pyramid scheme.

In 2021, Gong, who was the sole director, officer and shareholder of Edward Enterprise International Group Inc., pled guilty on behalf of the Edward Group in the Ontario Court of Justice after they were charged in connection with a scheme that recruited investors to invest in a company, O24 Pharma plc, and encouraged participants to recruit other investors. About 40,000 investors were induced to invest hundreds of millions of dollars in the scheme between 2012 and 2017.

The charges against Gong personally were withdrawn as part of the guilty plea by his company.

The OSC alleged that the activity that led to his company’s conviction involved securities law violations by Gong too, including breaches of the registration requirements and anti-fraud provisions.

Those allegations have now been resolved in a settlement, which was approved by the tribunal. It ruled that the deal was in the public interest, as it banned Gong from participating in the capital markets.

“[The settlement] reflects the seriousness, scope and recurrent nature of Mr. Gong’s misconduct, it effectively removes Mr. Gong from the capital markets permanently, and it operates as a significant deterrent for him and for others to engage in similar misconduct,” the tribunal said.

While the settlement didn’t involve any financial sanctions, the tribunal noted that the Edward Group was fined $1 million and ordered to forfeit significant assets as part of the court proceedings.