Ontario man fined for aiding scammers

The company, called New Found Freedom Financial (NFF), was never a reporting issuer in Ontario, and has never been registered with the commission either.

Regardless, it accepted funds from Ontario residents for a foreign exchange investment program from April 2008 to October 2009. In the summer of 2009, the company began to characterize the investment as a marketing program, in which investors paid a principal membership fee and received monthly payments.

Over the two years, the OSC says investors entered into a written agreement with NFF. They were told it would engage Forex traders who would trade with their funds. They were typically promised a fixed return of 5% per month, or 60% per year.

The company raised a total of approximately $1.8 million from 57 investors, but only paid back approximately $704,000.

Whidden helped at least 10 investors, who put forward a total of $332,000 as a result of his promotional and trading activities. He discussed the features of the NFF investment, provided them with promotional materials, and provided blank investment agreements for them to complete.

In exchange for these actions, the company paid him referral fees of 3% per month of the principal invested by his clients. He received a total of approximately $47,000.

Whidden has agreed to the following penalties:

• He shall pay to the commission an administrative penalty in the amount of $6,000 for his failure to comply with Ontario securities law;

• He shall cease trading in any securities for a period of 4 years commencing from the date of the order approving this settlement agreement, with the exception that once he pays his penalty he can trade securities for his registered retirement savings plans and his registered pension plan;

• He shall cease acquisitions of any securities for a period of 4 years commencing from the date of this order, with the exception that Whidden be permitted to acquire securities for his registered retirement savings plans and his registered pension plan;

• Any exemptions contained in Ontario securities law do not apply to Whidden for a period of 4 years commencing from the date of this order, except to the extent such exemption is necessary for trades undertaken in connection with his registered retirement savings plans and his registered pension plan;

• He is reprimanded;

• He shall resign any positions he holds as a director or officer of an issuer, with the exception that Whidden may continue his activities as a director and officer of Alternative Strategies by DAW and Profitable Giving Canada as those activities relate to charitable gifting arrangements;

• He is prohibited for a period of 4 years from the date of this order from becoming or acting as a director or officer of an issuer, registrant or investment fund manager, with the exception that Whidden may continue his activities as a director and officer of Alternative Strategies by DAW and Profitable Giving Canada; and

• He is prohibited for a period of 4 years from the date of this order from becoming or acting as a registrant, investment fund manager or promoter.