Order: In the Matter of Michael Paul Kraft and Michael Brian Stein

IN THE MATTER OF
MICHAEL PAUL KRAFT and MICHAEL BRIAN STEIN

 
File No. 2021-32

July 2, 2024

ORDER

(Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5)

WHEREAS on March 4, 2024, the Capital Markets Tribunal held a hearing at 20 Queen Street West, 17th Floor, Toronto, Ontario, to consider the sanctions and costs that the Tribunal should impose on Michael Paul Kraft and Michael Brian Stein as a result of the findings in the Reasons and Decision on the merits issued on October 20, 2023;

ON READING the materials filed by the parties, and on hearing the submissions of the representatives for the Ontario Securities Commission and the representatives for each of Kraft and Stein;

IT IS ORDERED THAT:

1. with respect to Kraft:
   1. pursuant to paragraph 2 of subsection 127(1) of the Securities Act (Act), trading in any securities or derivatives by Kraft shall cease for a period of three years from the date of this order, except that Kraft shall be permitted to trade:
      1. mutual funds, exchange-traded funds, government bonds, and guaranteed investment certificates (GICs);
      2. securities or derivatives for the account of any registered retirement savings plan (RRSP), registered retirement income fund (RRIF) and tax-free savings account (TFSA), as defined in the Income Tax Act, RSC 1985, c 1 (5th Supp) (the Income Tax Act), in which Kraft has sole legal and beneficial ownership;
      3. solely through a registered dealer in Ontario, to whom Kraft must have given a copy of this order; and
      4. only after the amounts in subparagraphs 1(g) and 1(h) have been paid in full;
   2. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Kraft is prohibited for a period of three years from the date of this order, except that Kraft shall be permitted to acquire:
      1. mutual funds, exchange-traded funds, government bonds, and GICs;
      2. securities for the account of any RRSP, RRIF, and TFSA, as defined in the Income Tax Act, in which Kraft has sole legal and beneficial ownership;
      3. solely through a registered dealer in Ontario, to whom Kraft must have given a copy of this order; and
      4. only after the amounts in subparagraphs 1(g) and 1(h) have been paid in full;
   3. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Kraft for a period of three years from the date of this order;
   4. pursuant to paragraphs 7 and 8.1 of subsection 127(1) of the Act, Kraft shall immediately resign any positions that he holds as a director or officer of an issuer or registrant;
   5. pursuant to paragraphs 8 and 8.2 of subsection 127(1) of the Act, Kraft is prohibited from becoming or acting as a director or officer of any issuer or registrant for a period of four years from the date of this order;
   6. pursuant to paragraph 8.5 of subsection 127(1) of the Act, Kraft is prohibited from becoming or acting as a registrant or as a promoter for a period of four years from the date of this order;
   7. pursuant to paragraph 9 of subsection 127(1) of the Act, Kraft shall pay an administrative penalty in the amount of $200,000 to the Commission; and
   8. pursuant to section 127.1 of the Act, Kraft shall pay to the Commission $150,000, for the costs of the investigation and hearing; and
2. with respect to Stein:
   1. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Stein shall cease for a period of four years from the date of this order, except that Stein shall be permitted to trade:
      1. mutual funds, exchange-traded funds, government bonds, and GICs;
      2. securities or derivatives for the account of any RRSP, RRIF, and TFSA, as defined in the Income Tax Act, in which Stein has sole legal and beneficial ownership;
      3. solely through a registered dealer in Ontario, to whom Stein must have given a copy of this order; and
      4. only after the amounts in subparagraphs 2(g) through 2(i) have been paid in full;
   2. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Stein is prohibited for a period of four years from the date of this order, except that Stein shall be permitted to acquire:
      1. mutual funds, exchange-traded funds, government bonds, and GICs;
      2. securities for the account of any RRSP, RRIF, and TFSA, as defined in the Income Tax Act, in which Stein has sole legal and beneficial ownership;
      3. solely through a registered dealer in Ontario, to whom Stein must have given a copy of this order; and
      4. only after the amounts in subparagraphs 2(g) through 2(i) have been paid in full;
   3. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Stein for a period of four years from the date of this order;
   4. pursuant to paragraphs 7 and 8.1 of subsection 127(1) of the Act, Stein shall immediately resign any positions that he holds as a director or officer of an issuer or registrant;
   5. pursuant to paragraphs 8 and 8.2 of subsection 127(1) of the Act, Stein is prohibited from becoming or acting as a director or officer of any issuer or registrant for a period of three years from the date of this order;
   6. pursuant to paragraph 8.5 of subsection 127(1) of the Act, Stein is prohibited from becoming or acting as a registrant or as a promoter for a period of three years from the date of this order;
   7. pursuant to paragraph 9 of subsection 127(1) of the Act, Stein shall pay an administrative penalty of $150,000 to the Commission;
   8. pursuant to paragraph 10 of subsection 127(1) of the Act, Stein shall disgorge to the Commission the amount of $29,345; and
   9. pursuant to section 127.1 of the Act, Stein shall pay to the Commission $50,000, for the costs of the investigation and proceeding.