Securities

Montréal - The Autorité des marchés financiers ("AMF") has filed a penal proceeding consisting of 12 charges against Claude Lemay, Philippe Guttieres and 9272-9888 Québec inc. in the judicial district of Montréal. The defendants are liable to a minimum fine of $69,000 if they are found guilty on all charges.

More specifically, Claude Lemay and Philippe Guttieres each face five charges for illegal practice as a securities dealer, distribution without a prospectus and misrepresentations with respect to transactions in securities. Each is liable to minimum fines totalling $26,000 if they are found guilty on all charges. Claude Lemay is also covered by freeze and prohibition orders issued in 2012.

Moreover, 9272-9888 Québec inc., a Canadian subsidiary of the British firm KAM, which specializes in the development of Web-based applications related to education and art, faces two charges for carrying out distributions without a prospectus. It is liable to minimum fines totalling $17,000 if it is found guilty on both charges.

The AMF investigation revealed that an investor earmarked $60,000 for shares in KAM with a promise of an annual return of 20% or additional KAM shares equivalent to 35%. The investor was also told that he could redeem his investment whenever another investor was recruited and that he would be paid a 30% commission in cash or the equivalent in KAM shares for any investor referrals. The investor is said to have lost his entire investment.

Some solicitations for this investment scheme were conducted through Web-based ads.

The Autorité des marchés financiers (the AMF) is the regulatory and oversight body for Québec's financial sector.

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