OSC Panel Issues Sanctions Against Majestic Supply Co. Inc, Suncastle Developments Corporation, Herbert Adams, Steve Bishop, Mary Kricfalusi, Kevin Loman and CBK Enterprises Inc.
For Immediate Release OSC
TORONTO – A panel of the Ontario Securities Commission (Commission) released today its Reasons and Decision on Sanctions and Costs in the matter of Majestic Supply Co. Inc. (Majestic), Suncastle Developments Corporation (Suncastle), Herbert Adams (Adams), Steve Bishop (Bishop), Mary Kricfalusi (Kricfalusi), Kevin Loman (Loman) and CBK Enterprises Inc. (CBK).
In its Decision on the merits, released on February 21, 2013, the Commission found that the respondents had illegally distributed Majestic shares to approximately 134 investors.
The panel also found that Adams’ deceptive representations amounted to conduct contrary to the public interest and that Majestic, Adams and Bishop “made representations as to the future listing of Majestic shares on a stock exchange for the purpose of effecting trades in Majestic shares, contrary to subsection 38(3) of the Act and contrary to the public interest”.
In today’s decision, the Commission imposed orders banning Majestic and Suncastle permanently from trading in or acquiring securities. The Commission imposed administrative penalties against each of Majestic and Suncastle in the amount of $200,000 and ordered Suncastle to disgorge $1,832,682 obtained from its sale of Majestic shares.
The panel also imposed a 20 year trading ban on Adams, whom the panel described as a “principal actor” and who, at various points, was an officer and director in Majestic and Suncastle’s operations. The Commission also imposed a 20 year director and officer ban on Adams, ordered him to both pay a $300,000 administrative penalty and to disgorge $516,000 obtained pursuant to his sale of Majestic shares.
With respect to Bishop, who was also described as a “principal actor”, was Majestic’s secretary and vice-president of corporate finance and had a commission-based relationship with Adams, the Commission imposed a 15 year trading ban, a 15 year director and officer ban and ordered him to pay an administrative penalty in the amount of $100,000. The Commission found that Bishop was clearly remorseful, acknowledged the seriousness of his conduct and co-operated with Staff.
Sanctions were also imposed against Kricfalusi, a director of Suncastle, Loman who was involved in the sale of Majestic shares and CBK, a company that held shares as trustee on behalf of Adams and Kricfalusi.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. Investors are urged to check the registration of any person or company offering an investment opportunity and to review the OSC’s investor materials available at www.osc.gov.on.ca
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