Spongetech Delivery Systems, Inc. (fka SPNGQ)

[scion]

20. On eight days, between April and September, 2009, these six accounts received share certificates for a total of 194 million shares of an OTCBB company, Spongetech Delivery Systems Inc. (Spongetech). Almost immediately after they were deposited to the Canaccord accounts, these shares were sold for proceeds of approximately $15,000,000. Almost immediately after the sale, the proceeds were then wired to banks accounts in Switzerland, Liechtenstein or Hungary at the instruction of UA.

[...]
23. The Respondent was aware that this selling was being directed by EE.

24. Almost immediately after the shares were sold and in most instances before the trades had settled, the Respondent accepted instructions from UA, who was not authorized on the accounts, to wire the proceeds of sale totaling $6,301,500 to different European banks as follows:
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http://www.iiroc.ca/Documents/2015/fd8c8911-0900-4359-8430-5198bca9eb3d_en.pdf


The Panamanian entities

5. At Canaccord, the Respondent was the RR responsible for as many as 23 investment accounts for companies that were incorporated and managed by International Management & Trust Corp. of Panama (Intertrust). Intertrust provided confidential offshore financial, incorporation, management and administrative services in the Republic of Panama.

6. These 23 companies were beneficially owned by one of 13 individuals residing in Europe, including a Hungarian national named EE, his personal assistant UA, and 11 others, each of whom was connected to EE or to UA.

EE and the connected beneficial owners

7. EE was the beneficial owner of three of the Panamanian companies, one of which opened an investment account at Canaccord in 2000. EE’s wife beneficially owned two of the other Panamanian companies, including one which opened an investment account at Canaccord in 1999.

8. The Respondent had no knowledge of how or why EE and the companies he beneficially owned first came to deal with and have investment accounts at Canaccord. The Respondent had no knowledge of why any of the other 12 individuals owned Panamanian companies or why those Panamanian companies opened investment accounts at Canaccord, other than his supposition that they did so because EE did. The Respondent had no knowledge of why EE owned Panamanian companies.

9. The Respondent had no knowledge of EE’s career other than to suppose that he was a retired businessman and an investor who maintained a living from his investment accounts. The Respondent understood that EE resided in Rome and in Hungary.

10. UA was the beneficial owner of two of the Panamanian companies, one of which opened an investment account at Canaccord in 2002. UA’s husband beneficially owned two of the other Panamanian companies.

11. The Respondent understood that UA, who was a Swiss national residing in Italy, was a colleague of and an assistant to EE.

12. UA’s daughter, BA, was the beneficial owner of two of the Panamanian companies. BA’s husband was the beneficial owner of another one.

13. The Respondent understood that BA was a ballet instructor, her husband was a chef, and they both lived in Italy.

http://www.iiroc.ca/Documents/2015/fd8c8911-0900-4359-8430-5198bca9eb3d_en.pdf