November 14, 2014 Securities

Montréal - A recent Court of Appeal decision confirmed the conviction of Pierre Verreault, one of the seven co-accused in the matter of illegal distributions involving Prépayé ICP Intercontinental inc., Groupe Krypton inc. and Krypton Imagination inc. The decision brings to an end various legal proceedings in a case in which Pierre Verreault, Jacques Allard¹ as well as Groupe Krypton inc. and Krypton Imagination inc. were ordered to pay fines totalling $569,000.

More specifically, on September 25, 2014, Judge François Doyon dismissed the motion filed by Pierre Verreault for leave to appeal the decision handed down by Judge Fraser Martin of Superior Court on May 16, 2014 that dismissed the initial appeal of the decision issued by Judge Jean-Paul Braun in the first instance. In October 2012, Judge Braun dismissed a motion for a stay of proceedings because of unreasonable delays filed by Pierre Verreault and found him guilty on 90 counts, including 30 for aiding Prépayé ICP Intercontinental inc., Groupe Krypton inc. et Krypton Imagination inc. with carrying out distributions without a prospectus, and 60 for pursuing illegal activities as a securities dealer. The Judge ordered him to pay fines totalling $300,000.

Similarly, on July 14, 2014, Judge Marie-France Bich of the Québec Court of Appeal dismissed the motion filed by the Autorité des marchés financiers ("AMF") to appeal the decision handed down by Judge Fraser Martin of Superior Court on May 16, 2014. Judge Martin had dismissed an initial appeal by the AMF regarding the stay of proceedings for unreasonable delays issued with respect to the defendants François Ledoux, William Thompson and Jacques Lévis by Judge Braun in October 2012.

On October 25, 2012, before Judge Braun, Groupe Krypton inc. pleaded guilty to 48 charges of carrying out distributions without a prospectus. As for Krypton Imagination inc., it pleaded guilty to one count of carrying out a distribution without a prospectus. Both companies were ordered to pay fines of $240,000 and $5,000 respectively.

On the same day, before the same judge, Jacques Allard pleaded guilty to four counts of aiding Prépayé ICP Intercontinental inc. with carrying out distributions without a prospectus and four counts of pursuing illegal activities as a securities dealer. He was ordered to pay fines totalling $24,000.

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

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¹ The respondent Jacques Allard should not be confused with Jacques Allard, a member of the Ordre des comptables généraux licenciés du Québec (certified general accountants association of Québec) who is authorized to pursue financial planning activities.
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