Order: In the Matter of Welcome Place Inc. et al.

IN THE MATTER OF THE SECURITIES ACT,
RSO 1990, c S.5, AS AMENDED

- AND –

IN THE MATTER OF
WELCOME PLACE INC., DANIEL MAXSOOD also
known as MUHAMMAD M. KHAN, TAO ZHANG and TALAT ASHRAF

ORDER
(Subsections 17(1) and (2.1) of the Securities Act)

WHEREAS:

1. on May 22, 2013, the Ontario Securities Commission (the “Commission”) made an Order pursuant to subsection 11(1)(a) of the Securities Act, RSO 1990 c S.5, as amended (the “Act”) appointing certain members of Commission Staff (“Staff”) to investigate and to inquire into the matters described therein with respect to Welcome Place Inc. (“Welcome Place”), Daniel Maxsood (“Maxsood”), Tao Zhang (“Zhang”) and Talat Ashraf (“Ashraf”) (collectively, the “Respondents”);
2. as part of its investigation, Staff obtained investors lists and promissory notes from Maxsood pursuant to section 13 of the Act. Staff also obtained promissory notes from investors, banking records and copies of payment instructions pursuant to section 13 of the Act (collectively, the “Requested Records”);
3. on July 2 and 9, 2013, the Commission issued seven freeze directions in respect of a number of bank accounts belonging to Welcome Place, Maxsood and Zhang which resulted in a total of approximately $662,869 being frozen (the “Frozen Funds”, “Freeze Directions”);
4. on July 9, 2013, the Commission issued a Certificate of Direction to the Land Registrar of Halton with respect to a property owned by Zhang, located at 3322 Raspberry Bush Trail, Oakville, Ontario;
5. on October 16, 2013, the Superior Court of Justice continued the Freeze Directions and the Certificate of Direction;
6. on December 18, 2014, Staff commenced proceedings under section 127 of the Act against the Respondents for breaches of the Act, which related to a distribution of Welcome Place securities, including fraud;
7. on February 10, 2016, Staff and the Respondents entered into a Settlement Agreement (the “Settlement Agreement”) in which the Respondents admitted to, among other things, committing fraud, unregistered trading and illegal distributions, and agreed to disgorge certain funds and pay administrative penalties, in addition to providing written consent that the Frozen Funds be paid to the Commission in partial satisfaction of the disgorgement amounts owed by Maxsood and Welcome Place;
8. on February 10, 2016, Maxsood paid $382,000 to the Commission in partial satisfaction of disgorgement amounts owed by him and Welcome Place;
9. on February 11, 2016, the Commission approved the Settlement Agreement;
10. on February 22, 2016, the Superior Court of Justice issued an order revoking the Freeze Directions and ordered the Frozen Funds be paid to the Commission in partial satisfaction of the disgorgement order;
11. the Commission received a total of $932,881.74 pursuant to the Settlement Agreement (the “Funds”);
12. the Commission has approved that the Funds be allocated to investors of Welcome Place and that the distribution be carried out by the Ministry of the Attorney General’s Civil Remedies for Illicit Activities Office (“CRIA”);
13.  CRIA requires the Requested Records to obtain a forfeiture order and in order to distribute the Funds to the Welcome Place investors;
14. Staff have requested an Order under subsections 17(1) and (2.1) of the Act authorizing the disclosure of the Requested Records to CRIA without notice and without an opportunity to be heard; and
15. the Commission considers it to be in the public interest to make this Order;

IT IS HEREBY ORDERED that:

1. Staff’s application proceed by way of written hearing is granted;
2. pursuant to subsections 17(1) Staff is authorized to disclose to CRIA the Requested Records; and
3. Such disclosure is authorized to be made without notice and without an opportunity to be heard pursuant to subsection 17(2.1) of the Act.

DATED at Toronto, this 14th day of December, 2016.