The Globe and Mail

Canada’s boiler room king received two jail sentences in 2011 for two separate schemes, leaving the OSC’s case files notably lighter after spending years investigating his activities. In May, Mr. Grossman and a colleague were sentenced to 21 months in jail for selling securities of Maitland Capital Inc. In June, another judge sentenced him to three years for improperly selling securities of Shallow Oil & Gas Inc. The two sentences will be served consecutively, adding up to almost five years.

The former Philip Services Corp. executive was hit with an eight-year jail sentence in October, and ordered to pay more than $18-million in restitution, after an Ontario court judge ruled he “diverted” more than $17-million from the defunct scrap metal company for his own use through secret copper trading deals. The fraud occurred while Philip was still a high-flyer on the Toronto Stock Exchange in the 1990s, but it all came crashing down when the company faced dual problems with improper accounting and missing copper inventories. Mr. Waxman has appealed his conviction and is free on bail while awaiting a ruling.

The Toronto dental surgeon faced accusations in February that he participated in a huge Ponzi scheme that raised more than $40-million from investors, including his friends and family members. The Ontario Securities Commission alleged Mr. Sbaraglia was working with partner Robert Mander to invest funds “in an unlawful and fraudulent manner.” Mr. Mander died at his Ontario home last year just as frantic investors won a court order to put his company into receivership to try to recover missing funds. A Buddhist charity later returned $300,000 in donations it had received from Mr. Mander. A hearing in Mr. Sbaraglia’s case is scheduled for June.

The two men were arrested in March and charged with fraud for their role in bringing down children’s animation company Cinar, maker of Arthur and The Adventures of Paddington Bear. The RCMP conducted a 10-year investigation into the disappearance of $120-million from Cinar that was allegedly funnelled to bank accounts in the Bahamas. Police allege Mr. Xanthoudakis, founder of Norshield Financial Group, helped Mr. Weinberg, Cinar’s co-founder, set up the scheme to divert funds.

The telemarketing executive was named in September in the largest fraud case of its kind ever announced by Canada’s Competition Bureau. The bureau laid charges against Mr. Haligua and four other people, as well as four Montreal companies, alleging they tricked business customers into buying $172-million of office supplies at hugely inflated prices. Telemarketers contacted companies falsely claiming to be regular suppliers seeking to renew contracts, and claiming someone else at the company had already authorized a purchase. The bureau alleged Mr. Haligua was responsible for running the telemarketing operation.

The curtain came down on the live theatre impresarios in September when the Ontario Court of Appeal upheld the Livent Inc. founders’ fraud convictions, but reduced their prison sentences to five years for Mr. Drabinsky and four years for Mr. Gottlieb. The men, who had been out on bail pending the appeal ruling, reported to prison in September and are now serving their sentences. Mr. Drabinsky is seeking leave to appeal to the Supreme Court of Canada.

The Ontario Securities Commission shut down trading in the Chinese company’s shares in August, alleging it had found evidence of fraud following a two-month investigation. The review was sparked by a damning short-seller’s report released in June, calling the $6-billion forestry company a “Ponzi scheme.” Sino-Forest’s board issued a report in November saying an internal review dismissing the Ponzi allegations and concluding the company had rights to forestry assets as claimed. But it also highlighted concerns about suspicious activity and falsified documents. The OSC has not taken further legal action against the company or its officials.

In the wake of the Sino-Forest scandal, the OSC launched a review of other foreign-based companies whose shares trade in Canada, including Chinese running shoe manufacturer Zungui. In November, the OSC levelled allegations against CEO Yanda Cai and chairman Fengyi Cai, accusing them of acting contrary to the public interest by impeding an independent audit of Zungui’s books and failing to co-operate with an investigation by the OSC.

The Canadian-born former media magnate returned to a U.S. jail cell in September to serve another 13 months behind bars after spending a year free on bail. He was resentenced in June after an appeal court reversed two of his three fraud convictions, stemming from his days as head of newspaper empire Hollinger Inc.

The asset-backed commercial paper company was ordered to pay $1-million in November for misleading investors about its financial health in 2007 in the lead-up to the meltdown of Canada’s $32-billion non-bank ABCP market. The Ontario Securities Commission also ordered founders Geoffrey Cornish and Dean Tai to pay $500,000 each. Coventree is the only entity to face sanctions from regulators over the ABCP freeze-up, although several major banks reached settlements over their roles in the market.

A controversial accident continued to haunt the Biovail Corp. founder and former CEO in 2011, eight years after a truck crashed while carrying when a shipment of Biovail drugs. In May, an Ontario Securities Commission panel ordered Mr. Melnyk to pay $565,000 and imposed a five-year ban from acting as a director or officer of a public company after it concluded Biovail made misleading disclosures in 2003 about the impact of the accident on company earnings. Mr. Melnyk also wrapped up a similar legal case with the U.S. Securities and Exchange Commission earlier this year.

The former CEO of Consolidated Thompson Iron Mines Ltd. was fined $132,974 in May after a Quebec court judge found him guilty of illegal insider trading. Quebec’s securities regulator accused the executive of buying 30,000 shares in 2006 while possessing undisclosed information about the company’s Bloom Lake deposit. He has denied the allegations and filed an appeal in the case.

Four current and former employees of the toy maker faced accusations in May of illegal insider trading for allegedly selling shares in 2005 before the company reported a toddler had died after swallowing magnets from one of its toys. Quebec’s securities regulator, the Autorité des marchés financiers, said it will seek penalties of $6.5-million from the men, including CEO Marc Bertrand and chief innovation officer Vic Bertrand. Mega Brands said its executives deny any wrongdoing.

Alberta’s securities regulator accused the CEO of Grande Cache Coal Corp. – and four other executives – of illegal insider trading, alleging they sold securities in 2008 before the company disclosed bad news about its sales. In a December release, the Alberta Securities Commission claimed that the company knew by May 26, 2008, it would miss sales volumes by 40 per cent for the quarter ended June 30, but the news was not disclosed until Aug. 14. In the interim, the ASC alleged the officials exercised options or sold securities. The company has denied the allegations and has said it will vigorously defend the executives.

The former Bay Street lawyer faced two new allegations in April when the Ontario Securities Commission expanded its 2010 case against him. Mr. Finkelstein is accused of tipping a long-time fraternity friend about merger deals his law firm was working on. In addition to four deals cited in allegations in 2010, the OSC added two more tipping charges in April involving two other merger deals that occurred in 2007. He has denied the claims, and launched a motion this fall to have the case dismissed, claiming he didn’t have enough time to reply to the allegations before they were announced. The OSC has not released its decision on his motion.

Ontario regulators accused the mutual fund executive of numerous infractions over a 2009 deal to acquire the rights to manage 13 Citadel investment funds with $1-billion in assets. The Ontario Securities Commission filed allegations in July, alleging Crown Hill Capital Corp. and Mr. Pushka, its CEO, acted improperly when Crown Hill arranged to borrow $28-million from one of its funds to purchase the Citadel fund management contracts. The OSC alleges that the loan, which represented more than 60 per cent of the assets of the Crown Hill Fund at the time, was an inappropriate use of the investment fund’s money. Mr. Pushka has denied the allegations and a hearing is scheduled for May.

The disgraced former investment banker was back in the news in November when the Ontario Securities Commission denied his application to set aside a 2008 settlement deal that saw him fined and banned for life from working in the securities industry after he acknowledged providing tips to a friend about merger deals. Mr. Rankin claimed he signed the settlement without knowing the star witness in his tipping case was in new trouble with the OSC, which would have eroded his credibility if the case had proceeded. The commission ruled the information was unrelated and would not have affected Mr. Rankin’s case.

An Ontario judge sentenced Mr. Tsatskin in November to three years in jail after he pled guilty to fraud in the sale of $14.7-million (U.S.) of New Gold LLP securities to 200 investors, most of them in Western Canada. The OSC said Mr. Tsatskin admitted the securities were fraudulently represented as ownership interests in Kentucky oil and gas leases.

The Ontario Securities Commission ruled in May that the hedge fund manager committed fraud by falsely inflating returns from investments in Icelandic glacier-water companies and overcharging investors nearly $7-million in fees. The regulator said his firm, Sextant Capital Management Inc., reaped millions by selling funds with improperly inflated values. Mr. Spork also improperly took $4-million in “loans” from the company for his personal use, the OSC concluded. The commission will decide on penalties next year.