Possible Ponzi scheme - Cease and freeze trade orders related to activities of Carole Morinville

Decisions and Freeze and cease trade orders Securities

Montréal – At the request of the Autorité des marchés financiers (AMF), the Bureau de décision et de révision (the “Bureau”) issued freeze orders on August 2, 2010 in connection with the activities of Carole Morinville, a former insurance of persons and group insurance of persons representative, and ordered her to cease any activity as a securities dealer or adviser.

Specifically, the Bureau ordered Carole Morinville, her spouse, Robert Diano, and the firms 9068-3442 Québec inc. and 9074-5613 Québec inc. (both of which do business as Agence Carole Morinville) and the firm 9215-3998 Québec inc. (which does business as Boîte Bagel MTL, Mtl Bagel Box, Mtl Bagel Cie and Mtl Bagel Co.) to cease any activity in respect of a transaction in a form of investment, including any activity as a securities dealer or adviser. The Bureau also ordered them not to dispose of the funds, securities or other assets in their possession.

In its request, the AMF sought immediate intervention by the Bureau, as it was concerned that the respondents might dispose of the assets entrusted to them.

In its decision, the Bureau referred to certain facts and allegations submitted by the AMF, in particular:

  • Carole Morinville is not registered with the AMF pursuant to the Securities Act;
  • The AMF’s investigation showed that between 2007 and 2010, Carole Morinville raised $1,488,230 from 28 investors;
  • Carole Morinville’s approach was to encourage people with whom she had developed a relationship of trust to make investments by promising them returns of 5% to 15%, but she remained ambiguous about the content and nature of the investments;
  • Carole Morinville did not specify in which securities she would invest or give details about how the funds would be used. She gave statements that she had made up herself to insistent investors;
  • Carole Morinville used a Ponzi strategy in that she solicited new investments to reimburse at least one insistent investor;
  • On July 13, 2010, the Disciplinary Committee of the Chambre de la sécurité financière temporarily struck Carole Morinville from its rolls of insurance of persons and group insurance of persons representatives.

This decision is a reminder to investors of the importance of having complete documentation so that they can make informed investment decisions, as stipulated in the Securities Act.

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

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