Illegal practice and illegal distributions - Penal proceedings relating to two schemes
Montréal - The Autorité des marchés financiers (the "AMF") has launched penal proceedings against ten individuals whom the AMF claims have engaged in illegal practice and made illegal distributions related to Fondation Internationale CDS as well as Fondation Agroterre and Foncière Agroterre.
The first scheme involves the management of funds and the distribution of derivatives with the goal of obtaining a return to be shared by the investor and Fondation Internationale CDS. The second scheme involves a promised return by way of a tax refund following a distribution with Foncière Agroterre. Investors have lost close to $500,000 in this matter.
Accusations of derivatives fraud against the two purported leaders
The AMF has launched proceedings against Daniel Duval and Jean-Claude Sénécal, who are considered the two masterminds of the schemes set up to raise money from investors by using recruiters. The AMF has filed 26 charges against Daniel Duval, including seven counts for illegally acting as a derivatives and securities adviser, 18 counts for distributions without a prospectus and one count for derivatives fraud under the Derivatives Act. Mr. Duval is facing a minimum fine of $1,023,040.
Jean-Claude Sénécal has been charged with 27 counts, including seven counts for illegally acting as a derivatives and securities adviser, 19 counts for distributions without a prospectus and one count for derivatives fraud under the Derivatives Act. Mr. Sénécal is facing a minimum fine of $1,028,040.
Charges against the alleged recruiters
The AMF has also launched proceedings against four individuals charged with illegal practice as a derivatives adviser related to the Fondation Internationale CDS scheme. Pierre Rousseau has been charged with two counts and is facing a minimum fine of $4,000. Adrian Sépulveda and Eugénie Lise Nolet have each been charged with one count and are facing a minimum fine of $2,000. Note that the AMF filed charges against Eugénie Lise Nolet in connection with another illegal distribution matter in 2013.
Moreover, charges were filed against four other individuals for illegal practice as a securities adviser and making distributions without a prospectus. Luc Vallée is charged with 22 counts and is facing a minimum fine of $77,000, Jean-Pascal Lemieux is charged with 6 counts and is facing a minimum fine of $21,000, while Martin Boily and Michael L. Carty are each charged with four counts and are facing a minimum fine of $14,000. Note that Michael L. Carty was fined $4,000 for illegal practice as a securities dealer in 2011.
Lastly, the AMF is attempting to serve a statement of offence involving one count for illegal practice as a derivatives adviser on Jocelyn Deschênes, who would face a minimum fine of $2,000. The Court recently suspended the effects of prescription regarding him.
The Autorité des marchés financiers (the AMF) is the regulatory and oversight body for Québec's financial sector.
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Sylvain Théberge: 514-940-2176