Decision in brief: Kallo Inc., Enforcement Proceeding, Settlement, December 11, 2024

In this enforcement proceeding, the OSC says that Kallo Inc. and its Chief Executive Officer, John Cecil, violated Ontario securities law by providing misleading information to investors. Despite red flags that should have caused them to question the information, they maintained that Kallo had contracts with five African governments worth over €5.9 billion. The contracts did not exist. Kallo’s only other full-time employee, Samuel Pyo, altered documents and prepared draft letters that appeared that they would be sent by African government officials.

The respondents and the OSC reached an agreement to settle the proceeding, which the Tribunal approved.

Under the settlement, Kallo is permanently prohibited from participating in Ontario’s capital markets. Cecil and Pyo are prohibited from participating in Ontario’s capital markets for periods of ten and four years, respectively. Cecil and Pyo may trade securities in their own name. Cecil may act as a director or officer of a private corporation as long as the amounts below are paid.

Kallo and Cecil are jointly responsible for paying an administrative penalty of $200,000 and costs of the investigation of $50,000. Of this $250,000, Kallo and Cecil have paid $75,000. Pyo is required to pay and has paid costs of the investigation of $5,000.