Abraham Grossman Sentenced to Six Months in Jail for Breaching Ontario Securities Act

Aug 14, 2013, 14:49 ET from Ontario Securities Commission

TORONTO, Aug. 14, 2013 /CNW/ - Abraham Grossman was sentenced to an additional six months in jail yesterday after pleading guilty to two counts of breaching cease trade orders and one count of unregistered trading contrary to the Securities Act (Ontario) before the Honourable Justice Peter Bourque of the Ontario Court of Justice. Grossman was also sentenced to two years of probation following his jail term and was ordered to pay $155,000.00 in restitution.

The sentence announced today is consecutive to a sentence of three years imposed on Grossman on June 16, 2011 for previous violations of the Act in the Shallow Oil and Gas Inc. matter.

Grossman admitted that between October 2009 and February 2011, he and the Strategic Gifting Group (a sole proprietorship in Ontario registered by Grossman), ran a fundraising/donor introduction share gifting program involving the trading of Dixon Perot & Champion Inc. securities (DPC Securities) with four Ontario charities and approximately 50 donors in Ontario and elsewhere in Canada.

In exchange for arranging introductions between the charities and the donors, Grossman and Strategic Gifting were paid 90 per cent of the cash donations received by the charities.  Grossman then delivered returns in the form of DPC Securities to the donors in amounts that exceeded their original donations.  Advisors were recruited by Grossman to promote the program to the public and were instructed to tell donors that they could receive tax receipts for 4 to 12 times the value of their original cash donation via DPC Securities. A total of $332,620 was received by Strategic Gifting as a result of this scheme.

During the Material Time Grossman was subject to two temporary cease trade orders (TCTO).  The first TCTO came into effect on January 24, 2006 and involved a company named Maitland Capital Ltd.  The second TCTO came into effect on January 16, 2008 and involved a company named Shallow Oil and Gas Inc.

Grossman continues to be subject to these cease trade orders, which prohibit him from trading in securities. These cease trade orders and other documents related to the Grossman matter are available on the OSC website at www.osc.gov.on.ca.

Under section 122 of the Act, the OSC has the authority to lay quasi-criminal charges against individuals or companies in the Ontario Court of Justice for alleged violations of the Act. Quasi-criminal means that a jail term is a possible sanction if a defendant is convicted of a violation of the Act. The OSC pursues cases in court in order to seek sanctions and penalties that send a strong message of deterrence to those who try to exploit investors.

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