Two Alberta men accused of operating a $52-million Ponzi scheme have been ordered to "disgorge" $9.6-million they raised from investors and pay penalties and costs totalling $2-million more.
In a decision released Tuesday, the Alberta Securities Commission said Dale St. Jean and Gregory Tindall perpetrated a significant fraud on investors, and there were no mitigating circumstances to warrant reducing their sanctions.
"The extreme seriousness of the false and misleading statements and fraudulent conduct argues for very significant sanctions against each respondent," an ASC hearing panel wrote in its sanctions decision.
The men raised money between 2005 and 2009 through their Calgary-based companies TransCap Corp. and Strata-Trade Corp., telling investors they were in the business of bond trading and providing bridge financing to other firms. Although investors were told their interest payments were coming from business activity, the ASC said payments to investors came from money raised from later investors.
The ASC said no money for investors has been recovered from either of their companies.
The two men were ordered to jointly repay $9.6-million they reaped from their scheme. The ASC said they raised about $51.6-million from investors and made payments to investors during the course of their scheme totalling $42-million, leaving a net gain of $9.6-million.
Mr. St. Jean was also ordered to pay a penalty of $1.2-million and costs of $35,000, while Mr. Tindall was assessed a penalty of $750,000 and costs of $35,000. Both men are permanently banned from buying or trading securities in Alberta or from acting as a director of officer of any company or investment fund.
While Mr. St. Jean participated in the March hearing in the case, Mr. Tindall was not represented. The ASC panel said his "whereabouts are apparently unknown."
Janet McFarland