The founder of a southwestern Ontario venture capital firm has struck a deal with the Ontario Securities Commission to repay $15.5-million he wrongly took from investors.
Vincent Ciccone, founder of Cambridge-based Ciccone Group Inc., was accused of raising more than $19-million from investors between 2008 and 2010 without being registered to do so and by promising returns of over 20 per cent annually.
The company, which claimed to be one of Canada's fastest-growing "niche financial venture companies," was assigned into bankruptcy in 2010, owing $17-million to investors.
In a settlement agreement released Monday, the OSC said Mr. Ciccone sold investors shares in Medra, a company marketed as specializing in resort real estate development and land acquisition. The OSC alleged Mr. Ciccone "misappropriated" the Medra money, however, "and used those funds for purposes completely unrelated to real estate development and land acquisition."
He is also accused of misappropriating investor funds that were supposed to have been used to buy securities in Minas Investments LP and in GEMS II OM.
The settlement agreement said Mr. Ciccone admitted the conduct was "contrary to the public interest."
He agreed to "disgorge" $15.5-million of investor funds, pay a further $750,000 in administrative penalties and pay OSC costs of $100,000. He is banned for life from trading securities or working in the investment industry.
The settlement agreement said Mr. Ciccone's position was that he was introduced to Medra by its founder, John Gel, who claimed to be developing time-shares in Mexico and who offered Mr. Ciccone a job as CEO of Medra.
Mr. Ciccone said he did not know the man's real name was actually Harris Ballow and that he had pleaded guilty to money laundering in 2004 and had fled the U.S. for Mexico prior to sentencing.
Mr. Ballow was arrested in Mexico in 2010 and subsequently returned to the U.S., where he was indicted for various stock schemes. Mr. Ciccone said he informed the OSC of Mr. Ballow's true identity when he found out in 2010.