FidesAMF lays 100 charges against Gaby Cournoyer and David Allaire; seeks prison term and fines of $647,000

Securities

Montréal – The Autorité des marchés financiers (AMF) has launched a penal proceeding in the Court of Québec (Criminal and Penal Division), district of Drummond, against Gaby Cournoyer and David Allaire. It is seeking a prison term in addition to fines totalling $647,000.

In its suit against Mr. Cournoyer, the AMF has filed 69 charges for violating the Securities Act (R.S.Q. c. V-1.1) (the “Act”) by:

  • assisting, by act or omission, Groupe Financier Fides inc. and Fiducie Fides, with the distribution of an instrument evidencing a debt governed by the Act, namely, a loan agreement, without holding a prospectus approved by the AMF, thereby violating section 11 of the Act (68 charges);
  • pursuing activities as a securities adviser without being registered as such with the AMF, thereby violating section 148 of the Act (1 charge).

The AMF is seeking a penalty of $5,000 for each of the 68 charges related to the distribution without a prospectus, for a total of $340,000 plus costs, as well as a prison term for exemplary reasons and because of the substantial losses incurred by investors and gross negligence in the use of the funds collected. With respect to the charge related to illegal practice, the AMF is seeking a penalty in the amount of $1,000 per day, for a total of $53,000, since the matter involves a continuing offence.

As for the suit against Mr. Allaire, the AMF has filed 31 charges for violating the Act by:

  • assisting, by act or omission, Fiducie Fides with the distribution of a form of investment governed by the Act, namely, a loan agreement, without holding a prospectus approved by the AMF, thereby violating section 11 of the Act (15 charges);
  • pursuing activities as a securities dealer without being registered as such with the AMF, thereby violating section 148 of the Act (15 charges).
  • pursuing activities as a securities adviser without being registered as such with the AMF, thereby violating section 148 of the Act (1 charge).

The AMF is seeking a penalty of $5,000 for each of the 15 charges related to the distribution without a prospectus, for a total of $75,000 plus costs, as well as $1,000 for each of the 15 charges related to illegal practice as a securities dealer, for a total of $15,000 plus costs. With respect to the charge related to illegal practice as a securities adviser, the AMF is seeking a penalty in the amount of $1,000 per day, for a total of $164,000, since the matter involves a continuing offence.

Messrs. Cournoyer and Allaire collected almost $2.5 million in irregular investments from approximately 60 investors between 2004 and 2006.

At the request of the AMF, the Bureau de decision et de revision en valeurs mobilières (BDRVM) issued a freeze order on June 14, 2006 on the funds, securities and other assets of Groupe financier Fides inc., La Fiducie Fides and 9166-6198 Québe  inc. as well as a cease trade order against Groupe financier Fides inc. and La Fiducie Fides. The freeze order was renewed on September 6 and December 5, 2006 and on March 8, 2007.

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

— 30 —

Information:

Media only:
Frédéric Alberro (514) 940-2176

Information Centre: (877) 525-0337