Montréal – On August 29, 2014, the Autorité des marchés financiers (the "AMF") launched a penal proceeding against Jean-François Amyot, Francis Mailhot, Ian Morrice, François Vallet, Eric Boyd, Marc Gagnon The respondent Marc Gagnon should not be confused with:
- Marc Gagnon, holder of certificate 113 466 in the insurance of persons and financial planning sectors as well as in the group insurance plans sector class with Industrial Alliance Insurance and Financial Services Inc.;
- Marc Gagnon, holder of certificate 113 467 in the insurance of persons, group insurance of persons and financial planning sectors with Services financiers Marc Gagnon inc., and registered as a mutual fund dealer representative with PEAK Investment Services Inc.;
- Marc Gagnon (NRD No. 1362021) who is registered as an advising representative (portfolio manager) with Industrial Alliance Investment Management Inc., Robert Fagan, Carol McKeown, Daniel Ryan, Andrew Barakett, Michael Raso Cortellazzi, Conseils Hilbroy inc. and IAB Média inc. The statement of offence contained contraventions of sections 195.2 and 207 of the Securities Act, namely, influencing or attempting to influence the market price or the value of securities by means of unfair, improper or fraudulent practices and conspiring to commit this offence.
The accused were charged with taking part in a "pump and dump" scheme targeting five companies listed on the US over-the-counter market, i.e., Spencer Pharmaceutical Inc., Energy 1 Corp., Andes Gold, Kender Energy and Wanderport Corp.
Except with respect to the charges against François Vallet, whose trial was separated from the others, the joint trial of the accused began on April 3, 2017 and was expected to last more than three months. At trial and under agreements reached with the AMF, several accused pleaded guilty to various charges filed against them, and the court imposed a total of $18,280,000 in fines, broken down as follows:
- Jean-François Amyot pleaded guilty to five counts of market manipulation and two counts of conspiracy, and was ordered to pay a fine of $11,200,000 and serve a three-month intermittent prison term.
- Francis Mailhot pleaded guilty to three counts of market manipulation and one count of conspiracy, and was ordered to pay a fine of $5,000,000.
- Daniel Ryan pleaded guilty to two counts of market manipulation and was ordered to pay a fine of $500,000. He also pleaded guilty to one count of market manipulation and was fined $225,000 in connection with another statement of offence.
- Conseils Hilbroy inc. pleaded guilty to one count of market manipulation and was ordered to pay a fine of $1,000,000.
- IAB Média inc. pleaded guilty to one count of market manipulation and was ordered to pay a fine of $500,000.
- Andrew Barakett pleaded guilty to one count of market manipulation and was ordered to pay a fine of $50,000.
- Eric Boyd pleaded guilty to one count of market manipulation and was ordered to pay a fine of $30,000.
"Market manipulation of securities is a very serious offence that warrants appropriate sanctions," said AMF President and CEO Louis Morisset. "The convictions obtained in this matter are the culmination of lengthy investigative procedures and the sustained work of our teams of investigators and prosecutors."
Note that the charge filed against Robert Fagan was withdrawn under a co-operation agreement with Justice Québec. Moreover, in order to reach a global settlement of this matter, the AMF withdrew, with leave of the court, the charges filed against the accused Michael Raso-Cortellazzi (1 count), Carol McKeown (1 count), Ian Morrice (2 counts) and Marc Gagnon (1 count).
Lastly, the AMF recalls that the cease trade orders issued on November 21, 2011 by the Bureau de décision et de révision, now the Financial Markets Administrative Tribunal , against Jean-François Amyot, IAB Média inc. and Conseils Hilbroy inc. remain in effect.
The Autorité des marchés financiers (the "AMF") is the regulatory and oversight body for Québec's financial sector.
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