May 2, 2022 Decisions and Freeze and cease trade orders Securities

Montréal – On April 18, 2022, in a decision rendered further to an ex parte request by the Autorité des marchés financiers (the “AMF”), the Tribunal administratif des marchés financiers (the “Tribunal”) issued cease trade orders in respect of securities and derivatives and freeze orders against Ramy Kamaneh, Mohamed Kada Mesli and persons related to them. 

Specifically, the Tribunal prohibited Ramy Kamaneh and Mohamed Kada Mesli from engaging in activities for the purpose of directly or indirectly trading in any form of investment covered by the Securities Act or in any derivatives covered by the Derivatives Act.

The Tribunal also ordered Ramy Kamaneh, Mohamed Kada Mesli and the impleaded parties SDIT inc., SDÉT inc., 7350341 Canada Inc. and Auriga ERP Consulting Inc. not to, directly or indirectly, withdraw or dispose of funds, securities or other assets that are in their possession or custody, or funds, securities or other assets that are in the possession of any other person having them on deposit, under control or in safekeeping on their behalf.

Context

In 2021, over a six-month period, Ramy Kamaneh and Mohamed Kada Mesli appear to have participated in a market manipulation scheme aimed at influencing and/or attempting to influence the market price or the value of the securities of the companies Majic Wheels, ICOA and All American Pet Company listed on OTC Markets Group’s U.S. over-the-counter market using unfair, improper or fraudulent practices.

It appears that, from March 2021 to January 2022, Ramy Kamaneh and Mohamed Kada Mesli made an estimated US$12 million in total profits (approximately CDN$15 million) using the scheme.

The TMF found there to be probative evidence that Ramy Kamaneh and Mohamed Kada Mesli had committed perceived breaches of 195.2 and 199.1 of the Securities Act and had engaged in  perceived conduct contrary to the public interest likely to cause irreparable harm to the integrity of the financial markets and the investing public and to affect investor confidence in those markets.

The Tribunal also found that its immediate intervention was warranted, it having been established by a preponderance of the evidence that the situation is urgent and that there is a risk of irreparable harm to the investing public and the integrity of the financial markets as a result, in particular, of the perceived unlawful activities being engaged in and the risk of the profits being dissipated, which would undermine any potential action to recover the amounts obtained from such activities. 

The AMF is currently investigating the activities of Ramy Kamaneh, Mohamed Kada Mesli and the other individuals involved.  

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

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