The Ontario Securities Commission (OSC) has brought allegations of unregistered trading and illegal distribution against a company, and its two founders, which were cease traded late last year.

The OSC said it will hold a hearing, starting on Dec. 11, to hear allegations against Systematech Solutions Inc., its president, April Vuong and its managing director, Hao Quach. The commission charges that Systematech, Vuong and Quach raised at least $12.4 million from investors between March 2007 and October 2011 and issued promissory notes in exchange for these investments. It says investors were promised an annual return of between 12% and 30% and told that their investments were not at risk.

However, the commission says that, of the $12.4 million raised from investors, $7.7 million was repaid to investors, $3.5 million was lost in trading accounts, and $900,000 was paid for personal type payments. As a result, it is alleging that they traded without registration and violated prospectus requirements and, “… engaged in a course of conduct that they knew or reasonably ought to have known would result in a fraud…”

None of the allegations have been proven.

The OSC issued a temporary cease trade order against the three respondents back in December 2011. The new hearing will consider whether to extend the temporary order, and whether any other sanctions may be warranted.