Decision in brief: Gong, Enforcement Proceeding, Settlement, October 30, 2024

Xiao Hua (Edward) Gong is the sole director, officer and shareholder of Edward Enterprise International Group Inc., also known as the Edward Group. In 2021, the Edward Group pled guilty and was convicted in the Ontario Court of Justice of using forged documents and of operating a pyramid scheme. About 40,000 people invested hundreds of millions of dollars.

In this enforcement proceeding, the OSC says that Gong, through the Edward Group and its activities that led to the guilty plea, violated Ontario securities law.

Gong and OSC staff reached an agreement to settle the proceeding, which the Tribunal approved.

Under the settlement, Gong is permanently restricted from participating in Ontario’s capital markets, subject to some limited exceptions that do not pose any risk to investors or the capital markets. Gong will not pay any financial sanctions in this proceeding, as the sentence the Court imposed on the Edward Group requires it to pay a fine of approximately $1 million and to forfeit (give up) properties in Canada and the U.S., cash and other assets.