The Ontario Securities Commission has filed new allegations against convicted fraudster Weizhen Tang, who called himself a “Chinese Warren Buffett” while raising $50-million from investors.
The OSC’s new allegations, revealed Wednesday, are intended to replace quasi-criminal charges the commission laid in 2009 in Ontario provincial court against Mr. Tang in connection with his alleged fraud, which primarily targeted investors in Toronto’s Chinese community.
The OSC withdrew the quasi-criminal charges in August after Mr. Tang was convicted criminally in the same matter earlier this year in Ontario Superior Court and received a six-year jail sentence. Mr. Tang is seeking to appeal his conviction to the Ontario Court of Appeal.
On Wednesday, the commission replaced its court case with an administrative tribunal hearing, which would give the OSC the ability to impose other sanctions against Mr. Tang beyond his jail sentence.
The OSC’s notice of hearing says the commission seeks to remove Mr. Tang’s right to trade securities in Ontario or to work as a registrant in the investment industry, and to bar him from working as a director or officer of a public company or an investment firm.
In its latest statement, the OSC said it would seek an enforcement order “reciprocating” Mr. Tang’s criminal conviction, which means the commission would not have to hold a lengthy hearing to consider the fraud allegations again in detail.
The OSC said it would seek to rely on the findings of Justice Alfred O’Marra of the Ontario Superior Court, who found “overwhelming evidence” that Mr. Tang committed fraud between 2006 and 2009 by making false representations to investors, by falsifying their account statements and by using money of recent investors to make payments to earlier investors, which is typical of a Ponzi scheme.
Justice O’Marra sentenced Mr. Tang in February to six years in prison, and ordered him to pay a fine of $2.8-million within five years of his release from prison. If he does not pay the fine, Justice O’Marra said he would have to serve five more years in jail.
Mr. Tang promised to invest his clients’ money in secure government bonds, but was accused of instead making risky trades in foreign currencies and other investments. His trial heard he gave investors false account statements showing their investments were increasing in value, when in fact most of their money was lost in bad trades.
Victims testified they had invested their life savings in Mr. Tang’s Oversea Chinese Fund, and had borrowed money and mortgaged their homes to raise money to invest.