TORONTO, March 28, 2013 /CNW/ - The Ontario Securities Commission (OSC) today approved two settlement agreements related to HEIR Home Equity Investment Rewards Inc. and Canyon Acquisitions, LLC et al.
The HEIR Respondents' settlement agreement relates to HEIR Home Equity Investment Rewards Inc. (HEIR), FFI First Fruits Investments Inc. (FFI), Wealth Building Mortgages Inc. (Wealth Building), and Mr. Archibald Robertson (Robertson). Robertson, a resident of Ontario, was the directing mind of these three Ontario corporations.
The settlement agreement of the Canyon Respondents relates to Canyon Acquisitions, LLC, Canyon Acquisitions International, LLC (the Canyon Entities), Mr. Brent Borland (Borland), Mr. Wayne D. Robbins (Robbins), Mr. Marco Caruso (Caruso), and various other corporations. Borland and Robbins, residents of the U.S., were the directing minds of the Canyon Entities. Caruso, a resident of Belize, represented himself to Ontario investors as the directing mind of the other corporations that were part of the Canyon Respondents.
Between 2007 and 2010, the Canyon Respondents offered investors the opportunity to acquire fractional interests in condominiums, villas or boat slips in a number of different real estate development projects in the Dominican Republic and Belize. Although characterized by the Canyon Respondents as real estate, these investments constituted investment contracts and therefore securities under Ontario laws.
The Canyon Respondents marketed and sold these investments to Ontario investors through arrangements made with the HEIR Respondents, who ran a private investment club that offered its members access to certain investments, including those of the Canyon Respondents. The HEIR and Canyon Respondents engaged in holding seminars and meetings with potential investors and/or providing promotional materials that constituted trading, or acts in furtherance of trading, of securities while not registered with the Commission and having no exemptions from registration available to them.
At least 480 Ontario investors purchased securities through the HEIR Respondents for a total investment of approximately $74.5 million. The HEIR Respondents received commissions for these activities, which commissions exceeded $4.5 million. Of those 480 Ontario investors, approximately 307 invested in the securities offered by the Canyon Respondents. The Canyon Entities raised at least $24.2 million from Ontario investors, of which $17.1 million concerned investment contracts in Belize involving Caruso and his companies.
All the Respondents admitted to breaching the Securities Act (Ontario) in relation to trading in securities without registration and illegal distributions of those securities. They also admitted that their various breaches of securities laws were contrary to the public interest. Additionally, the HEIR Respondents admitted to advising with respect to investing in, or buying securities, without proper registration. The directors and officers each admitted to having permitted or acquiesced in the breaches by their respective corporations.
The terms of the settlement agreements are as follows:
- Robertson must pay an administrative penalty of $350,000 and $150,000 towards the costs of Staff's investigation;
- HEIR, FFI and Wealth Building must pay, jointly and severally, an administrative penalty of $1,000,000;
- Respondents are permanently banned from becoming or acting as a registrant, investment fund manager or promoter;
- Respondents are permanently banned from trading in or acquiring any securities, (except for Robertson with respect to his own account and provided that all monetary payments against Robertson have been made in accordance with the settlement agreement and order); and,
- Robertson is reprimanded and permanently banned from becoming or acting as a director or officer of a registrant, issuer or investment fund manager.
- Respondents must pay, jointly and severally, an administrative penalty of $350,000 and $150,000 towards the costs of Staff's investigation. Respondents have committed to pay back, to each Ontario investor who still hold securities of the Canyon Respondents, their principal, less any payments that have already been made to them;
- Respondents must pay, jointly and severally, to the Commission $1,671,066, by way of disgorgement with respect to their non-compliance with securities laws in relation to projects in Belize; however, the disgorgement amount payable will be reduced by the amount that the Canyon Respondents pay to Ontario investors who still hold securities concerning projects in Belize;
- Borland, Robbins and the Canyon Entities must pay to the Commission, jointly and severally, $1,519,658, by way of disgorgement regarding their non-compliance with Ontario securities laws in relation to projects in the Dominican Republic; however, the disgorgement amount payable will be reduced by the amount that the Canyon Respondents pay to Ontario investors who still hold securities concerning projects in the Dominican Republic;
- Respondents are permanently banned from becoming or acting as a registrant, investment fund manager or promoter under the terms of the settlement and are permanently banned from trading or acquiring securities;
- Borland, Robbins and Caruso are reprimanded and banned from becoming or acting as a director or officer of an issuer for five years and permanently for Robbins; and,
- Borland, Robins and Caruso are permanently banned from becoming or acting as a director or officer of a registrant or investment fund manager.
A copy of the Settlement Agreement and Order of the Commission concerning the HEIR Respondents and the Settlement Agreement and Order of the Commission concerning the Canyon Respondents in this matter are available on the OSC website at www.osc.gov.on.ca
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. Investors are urged to check the registration of any person or company offering an investment opportunity and to review the OSC's investor materials available at www.osc.gov.on.ca
SOURCE Ontario Securities Commission