An Ontario woman who operated two companies linked to a massive penny stock fraud scheme was a knowing participant, the province's top securities regulator has ruled.
The Ontario Securities Commission says Andrea McCarthy, who acted as a director and officer for BFM Industries Inc. and Liquid Gold International Inc. "illegally distributed" securities and trades without registering with the body.
A sanctions hearing has been scheduled for March 12.
It's alleged that from November, 2008, to December, 2010, McCarthy's companies defrauded 32 foreign investors by selling them $445,000 of worthless stock.
The commission says it was McCarthy's responsibility to handle the day-to-day operations at the two companies, including communicating with investors and withdrawing money from corporate accounts.
Last week, Sandy Winick, described in OSC documents as McCarthy's lover, and his business partner, Gregory Curry, were permanently banned by the OSC from securities trading and ordered to pay more than $1-million in penalties for breaking securities law.
The sanctions were related to separate schemes involving securities of BFM, Liquid Gold and a third company called Nanotech Industries Inc.
Winick and Curry are also facing criminal charges in the United States, accused by the U.S. Attorney's office of being the leading figures in fraud schemes involving $140-million and spanning dozens of countries including Canada and tens of thousands of victims. The U.S. charges are still before the courts.
The indictment alleges that the defendants were involved in a massive "pump and dump" scheme – buying controlling interests in sketchy startup companies, then artificially inflating their value by promoting them in fictitious e-mails, social media messages and news releases.