The OSC has ruled in the matter of Shaun Gerard McErlean and Securus Capital Inc.
In a release, the regulator says “McErlean and Securus shall jointly and severally pay to the Commission an administrative penalty of $500,000 each, which is designated for allocation or for use by the Commission pursuant to s. 3.4(2)(b) of the Ontario Securities Act.
“McErlean and Securus shall disgorge to the Commission jointly and severally the amount of $8,892,906, which is designated for allocation or for use by the Commission pursuant to s. 3.4(2)(b) of the Act; and pursuant to s. 127.1 of the Act, the respondents shall pay on a joint and several basis $250,000, representing partial costs and disbursements incurred by the Commission in the investigation and hearing.”
The OSC has also permanently banned McErlean and Securus from securities trading.
In July, the OSC found McErlean and Securus Capital breached the Ontario Securities Act by raising $14 million from eight offshore investors.
The OSC panel said McErlean’s fraudulent activities flowed from his interaction with three sets of investors.
The OSC found “McErlean represented to all the investors that their money would be segregated in a separate account and would be used as collateral for investments in guaranteed, high-return trading. None of the money from the three sets of investors was used for that purpose. None of the money was kept separate and apart from the Securus bank account as was represented to the investors.”
The regulator added, “Steps were taken by Mr. McErlean through the use of fake screenshots and fake bank account numbers to deceive investors into thinking their funds were separate and secure. All of the investor funds were used by Mr. McErlean to pay personal expenses, to repay previous investors and to invest in private companies in which he or his family members had a financial interest.”