Michelle Dunk guilty of fraud and three violations of Securities Act
For Immediate Release Before the Court OSC
TORONTO – The Ontario Securities Commission (OSC) announced today that Michelle Dunk of Waterloo, Ontario, has been found guilty of fraud and three other violations of the Securities Act (Ontario) following an investigation and prosecution by the OSC’s Joint Serious Offences Team (JSOT).
On April 23, 2018, Justice Melanie Sopinka of the Ontario Court of Justice in Kitchener, Ontario, found that between May 1, 2012 and May 30, 2016, Dunk was involved in the sale and distribution of promissory notes related to Rocky Point Energy to Ontario investors. These investors included a senior citizen and members of Dunk’s church. Some of these promissory notes, which the Court found to be securities, promised interest returns of 15 per cent in as few as 45 days.
Justice Sopinka found that Dunk’s actions were fraudulent, contrary to section 126.1(1)(b) of the Securities Act. The Court found Dunk’s representations to some investors that their investments were “100 per cent secure” to be “entirely false.” Investors lost almost $90,000 CDN and $70,000 US as a result of Dunk’s fraudulent activities. Other than returning $1,000 to a single investor, no other funds were recovered.
The Court ruled that Dunk was in breach of a cease trade order made by the Commission, contrary to section 122 of the Securities Act. Dunk omitted telling victims she was subject to this Commission order. The Court found this deliberate omission by Dunk to be deceitful.
Dunk was also found guilty of unregistered trading, contrary to section 25(1) of the Securities Act and trading in securities without a prospectus as required by section 53(1) of the Securities Act.
Dunk remains subject to a Commission order imposed on January 6, 2015, which prohibits her from engaging in the business of trading or selling securities.
Dunk returns to the Ontario Court of Justice in Kitchener, Ontario, on April 27, 2018 to set a date for her sentencing.
To date, JSOT has pursued 40 matters involving 55 accused.
JSOT was established by the OSC as an enforcement partnership between the OSC, the Royal Canadian Mounted Police Financial Crime program and the Ontario Provincial Police Anti-Rackets Branch. The primary objective of JSOT is to protect investors and further enhance confidence in the Canadian capital markets through effective enforcement. This is accomplished through collaborative investigations of serious violations of the law using the provisions of the Securities Act or the Criminal Code.
The OSC's partnership with law enforcement allows for criminal charges to be laid by JSOT members, which include police officers seconded to the OSC. Charges laid under the Criminal Code are prosecuted by the Ministry of the Attorney General.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.gov.on.ca.
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