April 10, 2014 Securities

Montréal - On March 27, 2014, Justice of the Peace Patricia Compagnone of the Court of Québec, district of Longueuil, ordered Pierre Veillet to serve a two-year prison term and pay fines totalling $1,296,800, which is double the minimum penalty prescribed under the Securities Act, for pursuing illegal activities as a dealer and aiding with an illegal distribution of securities.

As well, Distribution mobile inc., where Pierre Veillet was the majority shareholder and the director, was fined $2,105,600, four times the minimum fine prescribed under the Act, for distributing securities illegally without a prospectus.

The investigation conducted by the Autorité des marchés financiers ("AMF") revealed that 36 persons, many of whom knew Pierre Veillet from work or friendships, invested almost $1.9M through him and Distribution mobile inc., of which some $1.5M was misappropriated.

In determining the penalty, the court noted numerous aggravating factors:

• The offences were committed over a period of almost three years;
• The number of victims and the fact that Pierre Veillet committed breach of trust;
• Participation in a scheme of which Pierre Veillet was the leader and mastermind, as well as planning and criminal intent;
• The investment amounts at issue ($1.9M), with some investors losing amounts varying between $50,000 and $270,000;
• Impact on victims, some of whom continue to pay interest on the loans made for investment purposes, not to mention the stress, anxiety, shame and guilt felt by victims;
• The fact that Pierre Veillet was the only person involved in the scheme's profit-sharing and the sole perpetrator of the scheme;
• Pierre Veillet's inability to reimburse the victims;
• The conduct of Pierre Veillet who, following the offences, kept investors completely uninformed and led them to believe they would be reimbursed but issued NSF cheques.

On January 21, 2014, Pierre Veillet pleaded guilty to 168 counts of pursuing illegal activities as a dealer and aiding with an illegal distribution. As for Distribution Mobile inc., the company was found guilty of 86 offences.

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

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