Decision in brief: Paramount Equity Financial Corporation, Sanctions and Costs, May 29, 2023

In an earlier decision, the Tribunal decided that Marc Ruttenberg, Ronald Bradley Burdon and Matthew Laverty committed fraud through Paramount Equity Financial Corporation, and related entities. They sold securities worth $70 million. Ontario securities law required them to be registered with the Ontario Securities Commission. They were not.  Ontario securities law also required them to file a prospectus for the securities (a document required by Ontario securities law that provides information about the investment). They did not. They told investors that the money would be used to fund certain lower-risk residential mortgages, but only used $20 million for that purpose. Of the three people involved, Laverty played a lesser role in the fraud.

In this decision, the Tribunal decided what sanctions and costs should be ordered against the respondents for their misconduct.

The Tribunal decided that Ruttenberg and Burdon should be permanently restricted from any participation in the capital markets. Laverty is also permanently restricted from assuming a role of responsibility in the capital markets such as acting as a director or officer, but is only restricted from trading securities for five years.

The Tribunal decided that Ruttenberg and Burdon are jointly responsible for disgorging (giving up to the Commission) $43,610,000. Laverty is only jointly responsible for disgorging $13 million of that amount.

The Tribunal decided that each of Ruttenberg, Burdon and Laverty should pay an administrative penalty. These penalties were adjusted for how serious their conduct was, as well as any factors that made their conduct better or worse: Ruttenberg ($1,500,000); Burdon ($1,000,000); and Laverty ($500,000).

Finally, the Tribunal decided that Ruttenberg and Burdon are jointly responsible for paying $600,000 in costs. Of that amount, Laverty is only jointly responsible for $175,000.