This is Jayman5000 awesome post from Icoa's Ihub "Great Research"
Here are the bits that earned 3 Chong tickers CE's and his removal as officer from another,
Financial Markets Authority c. Kamaneh
2022 QCTMF 18
ADMINISTRATIVE TRIBUNAL
FOR FINANCIAL MARKETS
CANADA
PROVINCE OF QUEBEC
MONTREAL
FILE No .:
2022-010
DECISION No .:
2022-010-001
DATE :
April 18, 2022
IN THE PRESENCE OF :
Mr. JEAN-PIERRE CRISTEL
AUTHORITY OF FINANCIAL MARKETS, legally constituted legal person having a place of business at 800, rue du Square Victoria, 22nd floor, in the city of Montreal, province of Quebec, H4Z 1G3
Plaintiff
vs.
RAMY KAMANEH , residing in [...] , in the City of Montreal (Île-Bizard), province of Quebec, [...]
and
MOHAMED KADA MESLI , residing at [...] , in the city of Montreal (Saint-Laurent), province of Quebec, [...]
Respondents
and
SDIT INC. , a corporation domiciled at 201-9801, rue Cérès, in the city of Dollard-Des-Ormeaux, province of Quebec, H9B 0A8
and
SDET INC. , a corporation domiciled at 201-9801, rue Cérès, in the city of Dollard-Des-Ormeaux, province of Quebec, H9B 0A8
and
7350341 CANADA INC. , domiciled at 5915, rue De Jumonville, in the city of Montreal, province of Quebec, H1M 1R2
and
TORONTO-DOMINION BANK INC. , having a place of business at 3720, boulevard des Sources, in the city of Dollard-des-Ormeaux, province of Quebec, H9B 1Z9
and
TD WATERHOUSE CANADA INC. , having a place of business at 7250, rue du Mile End, 6th floor, in the city of Montreal, province of Quebec, H2R 3A4
and
ROYAL BANK OF CANADA , having a place of business at 3131, boulevard de la Côte-Vertu, room F-1, in the city of Montreal (Saint-Laurent), province of Quebec, H4R 1P8
and
ROYAL BANK OF CANADA , having a place of business at 4119, rue Jean-Talon Est, in the city of Montreal (Saint-Léonard), province of Quebec, H1S 1J5
and
RBC DIRECT INVESTING INC. , having a place of business at 1, Place Ville-Marie, ground floor, in the city of Montreal, province of Quebec, H3B 3Y1
and
SCOTIABANK , having a place of business at 3828 boulevard de la Côte-Vertu, in the city of Montreal (Saint-Laurent), province of Quebec, H4R 1P8
and
DOUA'A ISMAIL , residing in [...] , in the City of Montreal (Île-Bizard), province of Quebec, [...]
and
NOUR EL-CHAFEI , residing in [...] , in the City of Montreal (Saint-Laurent), province of Quebec, [...]
and
OFFICE FOR THE PUBLICATION OF RIGHTS OF THE LAND CIRCUMSCRIPTION OF MONTREAL , having a place of business at 2050, rue De Bleury, office RC 10, Ville-Marie, in the city of Montreal, province of Quebec, H3A 2J5
Respondents
EX PARTE DECISION
OVERVIEW
[1] As part of an ongoing investigation, the Autorité des marchés financiers (" Authority ") urgently filed , on April 11, 2022 , with the Tribunal administratif des marchés financiers (" Tribunal ") a request for an ex parte hearing. to obtain restraining orders against respondents Ramy Kamaneh and Mohamed Kada Mesli as well as restraint orders against these respondents and with respect to the mis en cause.
[2] The AMF is the organization responsible for applying the Securities Act [1]and the Derivatives Act[2] . It exercises the functions provided for in these laws, in accordance with article 7 of the Law on the regulation of the financial sector .[3].
[3] Respondent Ramy Kamaneh is a resident of Quebec and presents himself as a self-employed worker in the field of " Business consulting " since December 2020 [4] . He is the majority shareholder and sole director of the mis en cause SDÉT Inc. [5] and the mis en cause SDIT Inc.[6] , which also used the names of M2Bio Science and Wuhan General Group. The respondent Doua'a Isma is the spouse of the respondent Ramy Kamaneh.
[4] Respondent Mohamed Kada Mesli is a resident of Quebec , who presents himself as holding three professional positions : ( i) Marketing Director for Chapman Cloud Accounting, Montreal , (ii) Co-founder and Managing Partner of Andalusian Capital , Montreal , and (iii) CEO and Founder of Mason & Mesli – Online Marketing [7] . He is the majority shareholder and sole director of the mis en cause 7350341 Canada Inc.[8] , which also does business as Capital Andalusian. The mis en cause Nour El-Chafel is the spouse of the respondent Mohamed Kada Mesli .
[5] The AMF's request was made under section 115.1 of the Financial Sector Regulation Act , which provides that the Tribunal may issue a decision adversely affecting a person's rights , without a prior hearing , in a context of urgency or in order to prevent irreparable harm from being caused. ??
[6] The AMF filed with its application the affidavit required by section 19 of the Regulation respecting the rules of procedure of the Financial Markets Administrative Tribunal ?????[9] , under which an application based on compelling reasons must be accompanied by a written affidavit supporting the facts of the application and the compelling reasons.
[7] A copy of the application [10] and the required affidavit is attached to this decision.
[8] The AMF alleges that during a period of approximately ten (10) months, i.e. between March 2021 and January 2022, the respondents Ramy Kamaneh and Mohamed Kada Mesli committed serious breaches of sections 195.2 and 199.1 of the Securities Act as well as acts contrary to the public interest that are likely to affect the integrity of the financial markets and the confidence of the investing public in these markets . In this regard, the Autorité alleges in particular that :
Respondent Ramy Kamaneh influenced and/or attempted to influence the price or value of the securities of Magic Wheels Corporation (“ MJWL ” ) , ICOA and All American Pet Company (“ AAPT ”) [11] using unfair, abusive or fraudulent practices;The Respondent Mohamed Kada Mesli influenced and/or attempted to influence the price or value of the securities of the ICOA companies and by using unfair, abusive or fraudulent practices;Respondent Ramy Kamaneh engaged in an act, practice or conduct that he knew or ought reasonably to have known would create an artificial price for the securities of MJWL, ICOA and AAPT;Respondent Mohamed Kada Mesli engaged in an act, practice or conduct that he knew or ought reasonably to have known would create an artificial price for the securities of the ICOA and AAPT companies.
[9] The AMF states that its investigation into this matter is continuing and that it essentially relates to a scheme to manipulate the stock market of the three aforementioned companies in which the respondents allegedly participated .
[10] The Authority maintains that its investigation reveals that between the months of May 2021 and February 2022, the respondents illicitly made , by participating in this scheme , profits of nearly 12 million USD , i.e. more than 15 million Canadian dollars .
[11] The AMF argues that it is urgent for the Court to issue the orders required in the conclusions of its application, all in order to (i) prevent the respondents from squandering the large sums they would have already collected in the context of illicit activities , and (ii) in order to prevent the respondents from continuing these illicit activities, which are likely to cause irreparable harm to the integrity of the financial markets and to the investing public .
[12] Given the urgency alleged by the AMF, the Tribunal heard its claim on its merits at an ex parte hearing held on April 12, 2022 . The Tribunal may, in a context of urgency or with a view to preventing irreparable harm from being caused, pronounce a decision adversely affecting the rights of a person without a prior hearing. [12] .
[13] To conduct its analysis and decide the issues raised, the Tribunal answered the following issues :
Does the evidence presented by the AMF show apparent breaches by the respondents of the Securities Act or apparent acts contrary to the public interest?Are we in an emergency context and/or in the presence of a situation that could cause irreparable harm if the Court does not render a decision without first hearing the respondents and the mis en cause ?If so, what measures of a preventive, protective and conservatory nature must be implemented, in the public interest, by the Tribunal?
[14] At the end of its analysis, the Tribunal answered positively to the first two questions mentioned above and decided, in the public interest, to implement - as protective, preventive and conservatory measures - all of the orders of prohibition and blocking required in the conclusions of the Authority's amended request.
TO ANALYSE
Question no . 1 : Does the evidence presented by the AMF demonstrate any apparent breaches of the Securities Act committed by the respondents or any apparent acts contrary to the public interest?
[15] In the opinion of the Tribunal, probative evidence presented by the AMF shows that , during a period of approximately ten (10) months, that is, between the months of March 2021 and January 2022, the respondents Ramy Kamaneh and Mohamed Kada Mesli allegedly committed apparent breaches of sections 195.2 and 199.1 of the Securities Act as well as apparent acts contrary to the public interest that are likely to cause irreparable harm to the integrity of the financial markets and to the investing public as well as affect investor confidence in these markets.
[16] According to the evidence presented by the AMF, these apparent breaches and these apparent acts contrary to the public interest were allegedly committed by the respondents while participating in a scheme aimed at influencing and/or attempting to influence the price or value of the securities of the MJWL , ICOA and AAPT companies and using practices that would be unfair, abusive or fraudulent.
[17] These are three issuers whose securities are traded on the OTC Markets stock exchange in the United States and which are commonly referred to in the Anglo-Saxon world as " penny stocks ", i.e. they are companies whose unit value of shares generally trades at less than one dollar.
[18] The Court recalls that sections 195.2 and 199.1 of the Securities Act provide as follows :
195.2. It is an offense to influence or attempt to influence the price or value of a security through unfair, abusive or fraudulent practices.
199.1. Every person commits an offense who, even indirectly, engages in or participates in a transaction or a series of transactions in securities or in a method of dealing in connection with a transaction in securities, or in any act, practice or conduct if it knows, or reasonably should know, that the transaction, series of transactions, trading method, act, practice or conduct:
1° creates or contributes to creating a misleading appearance of trading activity in a security, or an artificial price for a security;
2° constitutes fraud against a person.
Any person who attempts to commit an offense referred to in the first paragraph is also guilty of an offence.
[19] In October 2021, the Authority instituted an investigation [13] aimed in particular at determining whether natural or legal persons have influenced or attempted to influence the price or value of MJWL's stock through unfair, abusive or fraudulent practices.
[20] Respondent Ramy Kamaneh was interviewed by AMF investigators on October 14 , 2021 and he then told them that he had no contact with MJWL management. [14] .
[21] However , AMF investigators have discovered matches between the IP addresses used by David Shaw Cheng Chong (“ David Chong ”), appointed CEO and director of MJWL on May 12, 2021 [15] , and the IP addresses used by the respondent Ramy Kamaneh . It thus appears from the evidence presented by the AMF that the person who interacted via the Internet on several occasions, in June and August 2021, with MJWL's transfer agent and with the OTC Markets - in occurrence David Chong - would have connected to the Internet from the same place as the person who would connect to the brokerage and bank accounts of the respondent Ramy Kamaneh [16] .
[22] The Autorité's investigators also discovered matches between the IP addresses used by Erwin Vah lsing - who at the time of the alleged acts held the positions of Chief Financial Officer (" CFO ") , Secretary and Treasurer of ' ICOA [17] - and the IP addresses used by the respondent Ramy Kamaneh . It thus appears from the evidence presented by the Autorité that the person who interacted via the Internet on several occasions, in September 2021, on behalf of the ICOA company with the OTC Markets under the name of Vahlsing used an IP address related to respondent Ramy Kamaneh [18] .
[23] In addition, the AMF analyzed the metadata related to several official documents of MJWL, signed by officers of this company and transmitted by them to MJWL's transfer agent in June and July 2021 . . This analysis shows that the respondents Ramy Kamaneh and Mohamed Kada Mesli would be the authors of several of these documents [19] . However, the names of these respondents do not appear anywhere in the public documents of Mr. JWL .
[24] Furthermore , the Authority's investigation reveals that on April 16, 2021, Kim Halvorson – then CEO and director of MJWL – transmitted to MJWL's transfer agent [20] a set of documents , including one entitled “ Settlement Agreement ” [21] , dated March 1 , 2019, whereby a group of people – including respondent Ramy Kamaneh – allegedly purchased $837,000 worth of MJWL debt obligation from Kim Halvorson .
[25] Moreover , the Autorité's investigation revealed that the respondents Ramy Kamaneh and Mohamed Kada Mesli allegedly paid [22] - through the implicated companies SDIT Inc. and 7 350341 Canada Inc over which they respectively exercise control - a total of 100,000 USD to Kim Halvorson, and this, through the company Triage Micro-Cap Advisors LLC of which she would be the “ Managing partner ” [23] .
[26] Moreover, this investigation establishes that the respondent Ramy Kamaneh transferred , directly [24] or using the mis en cause SDIT Inc. [25] over which he exercises control, to the respondent Mohamed Kada Mesli a total sum of $608,500, through the mis en cause company 7 350341 Canada Inc over which he exercises control . In addition, the evidence shows that the respondent Mohamed Kada Mesli would have used the mis en cause 7 350341 Canada Inc. to pay , between April 1 and October 6, 2021, a total sum of 129,000 USD to EDM . Media LLC [26] , which notably offers the following service : “ Press Release Writing ” which it describes as follows :
“ We have designed and executed high-impact press release campaigns for over 500 clients, including publicly traded companies ... ”
[27] Finally, the evidence establishes that the appointment of David Chong as CFO of AAPT was publicly announced by press release on September 14, 2021 [27] . This date coincides with the creation of a Twitter profile in the name of @RealDavidChong, which published numerous tweets about the three issuers targeted by the AMF investigation, namely MJWL, ICOA and AAPT[28] .
[28] In the opinion of the Tribunal, the evidence described in paragraphs 20 to 27 of this decision suggests the existence of significant ties between the respondents Ramy Kamaneh and Mohamed Kada Mesli as well as between them . and individuals – namely David Chong , Kim Halvorson and Erwin Vahlsing – who were part of the management of MJWL, ICOA and AAP T during the Relevant Period.
[29] Added to this background is the following important evidence .
[30] On the one hand , intense promotional campaigns were launched against the companies MJWL, ICOA and AAPT, the effect of which was to considerably increase the value of their shares. On the other hand, the respondents Ramy Kamaneh and Mohamed Kada Mesli allegedly , in each case, bought a very large number of shares of these companies before and during these promotional campaigns when the price of their shares was relatively low or rising and they would have essentially liquidated when the price of those shares was significantly higher.
[31] The AMF conducted a detailed analysis of the respondents' transactions in the securities of issuers MJWL, ICOA and AAPT and the evidence it gathered demonstrates that these very timely transactions would have enabled them to carry out, between May 2021 and February 2022, total profits of nearly 12 million USD , or more than 15 million Canadian dollars, which break down as follows :
MJWL : $ 6,826,271 ; _ ICOA : $ 3,549,530 ; _ AAPT : $ 1,459,270 .
[32] The Court notes the concomitance of MJWL 's promotional campaign and the alleged transactions of the respondent Ramy Kamaneh in MJWL's stock, which is revealed by the detailed evidence presented to it by the AMF . In this regard, the Tribunal points out that :
Between March 29 and April 29, 2021, just before the publication of MJWL's first promotional press release, Respondent Ramy Kamaneh purchased 86,617,669 shares of MJWL and thus paid a total sum of 524,648 USD [29] . During this period, the aforementioned purchases by Respondent Ramy Kamaneh represented no less than 40 % of the total volume of MJWL shares that were traded on the market. [30] . Moreover, in April 2021, just before the start of MJWL's promotional campaign, the respondent Ramy Kamaneh 's position on MJWL represented 85 % of his equity portfolio , and this, while MJWL stock was then worth less than 0.01 USD [31] ;On April 30, 2021, MJWL issues a press release in which it announces the arrival of a new management team[32] . Between April 30 and December 27, 2021, MJWL issued over 20 promotional press releases signed by David Chong[33] . According to the evidence presented by the Authority, no other press releases from MJWL would be listed before these dates;Following the publication of these press releases, a significant increase in the trading volume and the value of MJWL 's stock occurs. [34] and, on July 2, 2021, MJWL's stock price peaked at $0.25[35] , an increase of more than 50 times compared to the value of the highest price reached by MJWL's share during the period from January 13, 2020 to April 29, 2021[36] ;The Court recalls that the evidence gathered by the Authority demonstrates that the respondents Ramy Kamaneh and Mohamed Kada Mesli would have been involved in the production of official documents of MJWL - which would have been transmitted by the managers of MJWL to the transfer agent of this company in June and July 2021 [37] - and that Respondent Ramy Kamaneh was allegedly involved , in June and August 2021, in communications by David Chong, then CEO of MJWL, with OTC Markets [38] ;Between April 30 and October 12, 2021 , the respondent Ramy Kamaneh would have sold 89,001,395 shares of MJWL for a total sum of 7,350,919 USD and he would have thus made a profit estimated by the Authority at 6,826,271 USD , or approximately 13 times ( 1,300%) his initial investment of $ 524,648 in purchasing shares of MJWL [39] ;The evidence collected by the AMF shows that the respondent Mohamed Kada Mesli would not have traded on the title of MJWL , but that he would have received from the respondent Ramy Kamaneh the total sum of 608,500 USD through of the company implicated 7350341 Canada Inc. over which the respondent Mohamed Kada Mesli exercises control [40] . This evidence also shows that, shortly after receiving this sum of money, the respondent Mohamed Kada Mesli would have, on July 30, 2021, carried out his first transaction on the ICOA security .[41] .
[33] The Court also notes the concomitance of the ICOA promotional campaign with the alleged transactions of the respondents Ramy Kamaneh and Mohamed Kada Mesli on the ICOA stock which is revealed by the detailed evidence presented to it by the Autorité . In this regard, the Tribunal points out that :
On June 1 , 2021, approximately 2 months before the publication of the first ICOA press release, the respondent Ramy Kamaneh allegedly began buying shares of this company[42] . Between June 1 and October 6, 2021, Respondent Ramy Kamaneh purchased 754,034,650 shares of ICOA at an average cost per share of 0.00175 USD, for a total sum of 1,325,006 USD [43] ;The bulk of ICOA stock purchases by Respondent Ramy Kamaneh , or 720,931,598 shares, would have taken place between June 1 and September 3, 2021, just before the filing of disclosure documents. continues by IOCA to the OTC Markets on September 13, 2021 [44] . The filing of these documents constitutes a very important part of the ICOA's promotional campaign as it is essential to obtaining the sought-after status of " Pink Current Information " with OTC Markets. [45] . During this period, the transactions which would have been carried out by the respondent Ramy Kamaneh on the title of IOCA would represent 9 % of the total of the shares of IOCA traded on the market .[46] ;July 30, 2021, shortly after receiving $608,500 from Respondent Ramy Kamaneh [47] that is, a part of the profits that would have been made by him on the title of MJWL , the respondent Mohamed Kada Mesli would have carried out his first transaction on the title of ICOA [48] ??. Between July 30 and September 8, 2021, the respondent Mohamed Kada Mesli purchased 33,891,119 ICOA shares at an average cost of 0.00126 USD, for a total investment of 42,831 USD [49] . As of August 31, 2021, the Respondent Mohamed Kada Mesli 's position in IOAC represents 80 % of his securities portfolio[50] ;Between July 25 and December 20, 2021, ICOA issued 11 press releases of a promotional nature and filed them with OTC Markets. No ICOA release was listed by the AMF before July 25, 2021[51] ;As a result of the publication of these press releases, a significant increase in trading volume and ICOA security value occurs[52] and, on September 30, 2021 as ICOA obtained " Pink Current Information " status from OTC Markets, ICOA 's stock price peaked at $ 0.026 [53] , an increase of more than 10 times the value of the highest price reached by I COA 's share during the period from January 6 , 2020 to July 25 , 2021 [54] ;The Court recalls that the evidence collected by the AMF shows that the respondent Ramy Kamaneh would have been involved, in September 2021, in communications by Er wi n Vahlsing - then CFO, secretary and treasurer of I C OA - with OTC Markets [55] ;Between June 2 and October 12, 2021, Respondent Ramy Kamaneh sold 205,034,650 shares of ICO A and received a sum of USD 2,078,957 , all at a profit that the Authority estimates at $753,951 [56] . In addition, between October 13, 2021 and February 3, 2022, he would have liquidated the rest of his ICOA shares and would have thus realized, according to the Authority, an additional profit of at least 2,600,000 USD . [57] . These transactions by the respondent Ramy Kamaneh on the ICOA title would therefore have allowed him to obtain a return of more than 250 % compared to his initial investment of 1,325,006 USD ; As for the respondent Mohamed Kada Mesli , the evidence presented by the AMF shows that between August 23 and October 27, 2021, he sold 16,841,119 ICOA shares and received an amount of 238,410 usd . He would thus have made a profit that the Authority estimates at 195,579 USD [58] , a return of more than 450% compared to his initial investment of 42,831 USD .
[34] The Court also notes the concomitance of the AAPT promotional campaign with the alleged transactions of the respondents Ramy Kamaneh and Mohamed Kada Mesli on the AAPT stock, which is revealed by the detailed evidence presented to it by the Autorité . In this regard, the Tribunal points out that :
On July 23, 2021, Respondent Ramy Kamaneh would have started buying shares of AAPT and, between that date and September 30, 2021, he would have bought 90,624,218 shares of this company at an average cost per share of 0.01097 USD, disbursing a total sum of USD 994,929 [59] .The largest portion of these purchases , i.e. 76,000,000 shares, is concentrated between July 23 and August 25, 2021, i.e. very shortly before the public announcement by AAPT, on September 1 , 2021 , of a change control [60] , the filing of continuous disclosure documents on the OTC Markets and the publication of a series of four promotional press releases, between September 14 and September 29, 2021 by the new management of AAPT[61] ;It should be noted that it was on September 14, 2021 that AAPT announced, through a press release, the appointment of David Chong[62] as CFO[63] . The Court recalls that this date coincides with the creation of a Twitter profile in the name of @RealDavidChong, which published numerous tweets about the three issuers targeted by the AMF's investigation, namely MJWL, ICOA and AAPT[64] ;On September 17, 2021, AAPT obtained “ Pink Current Information ” status from OTC Markets [65] ;Following these events and the publication of these press releases, a significant increase in the volume of transactions and the value of the stock of AAPT occurs. [66] and, on September 22 , 2021 shortly after AAPT was granted " Pink Current Information " status by OTC Markets, AAPT 's stock price peaked at $ 0.0322 . [67] , an increase of almost 15 times the value of the highest price reached by the action of AAPT during the period from January 3 , 2020 to May 17, 2021[68] ;Between August 30 and September 1 , 2021, i.e. just prior to the aforementioned major AAPT announcements and publications , Respondent Mohamed Kada Mesli allegedly purchased 7,072,526 shares of AAPT at an average cost per share of $ 0.00633 , and this, for a total sum of 44 786 USD [69] ;Between September 3 and October 12, 2021, Respondent Ramy Kamaneh would have liquidated most of his AAPT shares, i.e. 86,624,218 shares . According to the Authority, he would have received for these shares a total sum of 2,314,464 USD and, as of November 3, 2021, would have made profits of 1,319,535 USD . [70] , a return of more than 130 % compared to his initial investment of 994,929 USD ;
Between September 3 and October 15, 2021, the Respondent Mohamed Kada Mesli would have liquidated all of his shares in AAPT and he would have received for them a total sum of 184,521 USD . [71] . He would therefore have made a profit of 139,735 USD . [72] and thus obtained a return of more than 300 % compared to his initial investment of 44,786 USD .
[35] In light of all the evidence presented to it by the AMF, the Court considers that it is of great concern for the integrity of the markets and for the protection of the investing public : ( i) the appearance of a set of significant and not publicly disclosed links [73] , including substantial cash payments[74] , between the respondents Ramy Kamaneh , Mohamed Kada Mesli and persons occupying important functions within the management of the companies MJWL , ICOA and AAPT , (ii) the staggering profits - 15 million dollars over a period of approximately 10 months between May 2021 and February 2022 - which would have been carried out by the respondents following a series of major stock market transactions in the securities of these companies, which transactions were carried out in a remarkably concomitant manner with campaigns to promote these titles by the management of these companies , and (iii) the substantial payment of money that the respondents allegedly made to a communications firm that “ … designed and executed high-impact press release campaigns for over 500 clients, including publicly traded companies ” [75] .
[36] Consequently , after duly considering all of the aforementioned evidence, the Tribunal comes to the conclusion that conclusive circumstantial evidence presented by the Authority demonstrates that during a period of approximately ten (10) months, between the months of March 2021 and January 2022, the respondents would have committed serious apparent breaches of sections 195.2 and 199.1 of the Securities Act as well as apparent acts contrary to the public interest - which risk to cause irreparable harm to the integrity of the financial markets and to the investing public as well as to affect the confidence of investors in these markets - all while participating in a scheme which would seek to influence and/or attempt to influence the price or the value of the securities of the MJWL , ICOA and AAPT companies as well as by using practices that would be unfair, abusive or fraudulent.
[37] The Court is also very concerned by the fact that the evidence gathered by the AMF , within the framework of an ongoing investigation , reveals that the respondents Ramy Kamaneh and Mohamed Kada Mesli could be suing - with the substantial profits they would have already made - similar activities with other companies, including Caduceus Software System Corp [76] , a company that appears to use a promotional strategy similar to those carried out by MJWL , ICOA and AAPT [77] and in which 2,130,000 USD would have been invested by the mis en cause SDÉT Inc. , a company controlled by the respondent Ramy Kamaneh [78] .
[38] In this regard, the AMF asserts that the respondent Ramy Kamaneh still holds several brokerage and bank accounts that he currently uses to trade in other securities, in particular by using options, and, as of March 14, 2022, an amount of USD 3,374,227 was still available in one of his brokerage accounts [79] .
Question no . 2 : Are we in an emergency context and/or in the presence of a situation that could cause irreparable harm if the Tribunal does not render a decision without first hearing the respondents and the mis en cause ?
[39] After considering all of the detailed evidence presented to it by the AMF, the Court answers "yes" to this question and considers that there is a context of urgency and a risk of irreparable harm. it does not pronounce this decision without first hearing the respondents.
[40] Article 115.1 paragraph 2 of the Act respecting the regulation of the financial sector provides that the Tribunal may render a decision which adversely affects the rights of a party, without prior hearing of the latter, in the context of a urgency or to prevent irreparable harm from being caused.
[41] In the opinion of the Tribunal, in this case, a preponderant evidence establishes the urgency and the risk that irreparable harm will be caused to the investing public and to the integrity of the financial markets by the apparent breaches of articles 195.2 and 199.1 of the Securities Act and by the apparent acts contrary to the public interest allegedly committed by the respondents, all justifying immediate intervention by the Tribunal with the aim of protecting the public interest.
[42] In this regard, the Tribunal points out that :
The AMF's investigation into the respondents' financial activities is continuing but, in the Tribunal's opinion, it already presents convincing evidence that they allegedly committed apparent breaches of sections 195.2 and 199.1 of the Securities Law and apparent acts contrary to the public interest that risk causing irreparable harm to the integrity of the financial markets and to the investing public as well as affecting the confidence of investors in these markets , all by participating in a scheme which allegedly had the objective of influence and/or attempt to influence the price or value of the securities of MJWL , ICOA and AAPT companies as well as by using practices that would be unfair, abusive or fraudulent;The evidence gathered by the AMF also reveals that the respondents could currently be pursuing illicit activities by trading in securities and derivatives in the securities of other companies, in particular by using part of the $ 15,000,000 that they allegedly made as a result of their trades in MJW L , ICOA and AAPT securities; In light of this evidence, it is imperative to implement a set of measures aimed at protecting the integrity of financial markets and the investing public , as well as maintaining public confidence in these markets. Maintaining this confidence is vital to the proper functioning of the market economy of our contemporary society and it is essential to preserve it;A preliminary analysis of the movement of funds in the respondents' accounts, carried out as part of the Autorité's investigation, indicates that they would have already used a significant part of the gains - which would have been illicitly made within the framework of the present business - to acquire real estate[80] worth several million dollars in Quebec. The respondents would also have transferred to third parties - outside Quebec - sums that would amount to several million dollars[81] ;Without immediate intervention by the Court, it is to be feared that the substantial sums - which would have been collected by the respondents as a result of illicit activities - would be squandered by these respondents , which would have the effect, in particular, of rendering illusory any possible recourse aimed at to recover the sums obtained from these activities , in particular to compensate investors from the public who could have been harmed by these activities .
[43] Therefore, in the opinion of the Tribunal, the AMF has demonstrated the urgency and the risk that irreparable harm will be caused to the public and to the integrity of the markets by the apparent breaches and the apparent acts contrary to the public interest allegedly committed by the respondents in this case , all of which justifies immediate intervention by the Tribunal.
Question no . 3 : If applicable, what are the preventive, protective and conservatory measures that must be implemented, in the public interest, by the Tribunal?
[44] In this case, the orders sought by the Authority - under articles 93, 94, 97 al. 2 (3 ° ), 97 par. 2 ( 7° ), 115.1 and 115.15.3 of the Act respecting the regulation of the financial sector as well as sections 249, 250 and 265 of the Securities Act and sections 119 , 120 and 131 of the Act respecting derivative instruments - are preventive, protective and protective in nature.
[45] These orders are primarily intended to prevent - during the AMF's investigation - the squandering of the respondents' assets that may have been obtained through breaches of the law or acts contrary to the public interest by ordering them not to dispose directly or indirectly of funds, securities or other assets which they have in their possession or which have been entrusted to them and not to withdraw or appropriate funds, securities or other assets from the hands of another person who has them in safekeeping or who has custody or control of them, including the contents of safety deposit boxes, at any place.
[46] In this regard, the Court recalls that section 249 of the Securities Act and section 119 of the Derivatives Act allow it to issue a general freeze order against respondents personally, and towards third parties who may have in their hands and under their control property or sums of money belonging to the respondents or due to them.
[47] Pursuant to sections 250 of the Securities Act and 120 of the Derivatives Act , freeze orders take effect from the time the persons concerned are informed of them and, unless there is no provided otherwise, remain in effect for a period of 12 months. They may, however, during this period, be revoked or otherwise modified by the Tribunal in the public interest.
[48] ??Given that the evidence presented by the AMF shows that the respondents allegedly committed numerous and serious apparent breaches of sections 195.2 and 199.1 of the Securities Act as well as acts contrary to the public interest and that, moreover, this evidence contains serious indications that the respondents could be presently pursuing these illicit activities by using the securities or derivatives market, the Court considers that the prohibition orders sought by the regulator must be issued immediately , all in order to protect the integrity of financial markets, protect the investing public and preserve public confidence in the integrity of these markets . Sections 265 of the Securities Act and 131 Derivatives Act allow the Tribunal, in the public interest, to issue such orders.
[49] In this regard, the Tribunal points out that breaches of sections 195.2 and 199.1 of the Securities Act as well as acts contrary to the public interest that undermine the integrity of financial markets and the confidence of the investing public in these markets are among the most serious under the Securities Act , because they undermine the very foundations of the market economy on which the standard of living of citizens and of our society as a whole ultimately depends contemporary .
[50] The Court must therefore, in the public interest, take very seriously into consideration the detailed evidence presented to it - urgently - by the Autorité in the context of this case , in particular because the market regulator alleges that such serious breaches and acts contrary to the public interest have been committed and would probably still be committed by the respondents.
[51] Consequently, after having duly considered the evidence and arguments presented to it by the AMF during the ex parte hearing held on April 12, 2022, the Tribunal has come to the conclusion that it is in the public interest in implementing all of the conclusions sought in the Autorité's amended request.
FOR THESE REASONS, considering that the evidence presented by the Autorité demonstrates that this decision must be rendered in a context of urgency or in order to prevent irreparable harm from being caused and justifies immediate intervention without a hearing of the respondents and the mis en cause in order to protect the public interest, the Financial Markets Administrative Tribunal, by virtue of articles 93, 94 , 97 al. 2 (3 ° and 7° ), 115.1 and 115.15.3 of the Act respecting the regulation of the financial sector , sections 249, 250 and 265 of the Securities Act and sections 119, 120 and 131 of the Derivatives Act :
WELCOMES the amended request from the Autorité des marchés financiers and, in the public interest ;
Restraining orders
PROHIBITS the Respondent Ramy Kamaneh from engaging in any activity with a view to carrying out, directly or indirectly, a securities transaction on any form of investment covered by the Securities Law ;
PROHIBITS the respondent Ramy Kamaneh from engaging in any activity with a view to carrying out, directly or indirectly, a transaction on any derivative covered by the Derivatives Act ;
PROHIBITS the respondent Mohamed Kada Mesli from engaging in any activity with a view to carrying out, directly or indirectly, a securities transaction on any form of investment covered by the Securities Act ;
PROHIBITS the respondent Mohamed Kada Mesli from carrying out any activity with a view to carrying out, directly or indirectly, a transaction on any derivative covered by the Derivatives Act ;
restraint orders
ORDERS the respondent Ramy Kamaneh and the mis en cause SDIT inc. and SDET inc. not to, directly or indirectly , withdraw or dispose of funds, securities or other property that they have in their possession or of funds, securities or other property in the possession of another person who has custody, custody or control for Ramy Kamaneh, SDIT inc. and SDET inc. , in particular in the following bank accounts and brokerage accounts :
No Account
Branch
Incumbent
[...]
04350
Ramy Kamaneh
[...]
04350
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
00471
Ramy Kamaneh
[...]
00471
Ramy Kamaneh
0152412
00471
SDET Inc.
0038210
00471
SDET Inc.
0055417
00471
SDET Inc.
0147915
00471
SDIT inc.
0053112
00471
SDIT inc.
ORDERS the respondent Ramy Kamaneh and the mis en cause Doua'a Ismail not to , directly or indirectly , assign, encumber, alter, destroy and/or alienate the building with the building constructed on it bearing the civic number [... ] , Montreal (Île-Bizard), province of Quebec, [...] , known and designated as being lot number [...] ( [...] ) of the Cadastre of Quebec, in the registration division of Montreal ;
ORDERS the Officer of the Registry Office of the registration division of Montreal to proceed with the publication of the blocking order and this decision with respect to the immovable with the building erected on it bearing the civic number [.. .] , Montreal (Île-Bizard), province of Quebec, [...] , known and designated as being lot number [...] ( [...] ) of the Cadastre of Quebec, in the registration division of Montreal;
ORDERS the mis en cause Banque Toronto Dominion inc. , having a branch at 3720, boulevard des Sources , in the city of Dollard-des-Ormeaux, province of Quebec, H9B 1Z9, not to dispose, directly or indirectly, of the funds, securities or other property that it has in filing or of which it has custody or control for the respondent Ramy Kamaneh and the mis en cause SDIT inc. and SDET inc. , in particular in the following bank accounts :
No Account
Branch
Incumbent
[...]
04350
Ramy Kamaneh
[...]
04350
Ramy Kamaneh
ORDERS the mis en cause TD Waterhouse Canada inc. , having a place of business at 7250, rue du Mile End, 6th floor, in the city of Montreal, province of Quebec, H2R 3A4, not to dispose, directly or indirectly, of the funds, securities or other property she has on deposit or of which she has custody or control for the respondent Ramy Kamaneh and the mis en cause SDIT inc. and SDET inc. in particular in the following brokerage accounts :
No Account
Branch
Incumbent
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
[...]
N / A
Ramy Kamaneh
ORDERS the mis en cause Banque Scotia , having a branch at 3828 , boulevard de la Côte-Vertu , in the city of Montreal ( S ain t-Laurent ) , province of Quebec, H4R 1P8, not to divest, directly or indirectly, funds, securities or other property that it has on deposit or of which it has custody or control for the respondent Ramy Kamaneh and the mis en cause SDIT inc. and SDET inc. , in particular in the following bank accounts :
No Account
Branch
Incumbent
[...]
00471
Ramy Kamaneh
[...]
00471
Ramy Kamaneh
0152412
00471
SDET Inc.
0038210
00471
SDET Inc.
0055417
00471
SDET Inc.
0147915
00471
SDIT inc.
0053112
00471
SDIT inc.
ORDERS the respondent Mohamed Kada Mesli , 7350341 Canada inc. and Auriga ERP Consulting not to, directly or indirectly , withdraw or dispose of funds, securities or other property they have in their possession or funds, securities or other property in the possession of another person who has the deposit, custody or control for the respondent Mohamed Kada Mesli and 7350341 Canada inc. and Auriga ERP , in particular in the following bank accounts and brokerage accounts :
No Account
Branch
Incumbent
[...]
03051
Mohamed Kada Mesli
[...]
03051
Mohamed Kada Mesli
[...]
03051
Mohamed Kada Mesli
[...]
03051
Mohamed Kada Mesli
[...]
N / A
Mohamed Kada Mesli
[...] (CAD)
N / A
Mohamed Kada Mesli
[...] (USD)
N / A
Mohamed Kada Mesli
[...]
N / A
Mohamed Kada Mesli
1040120
03051
7350341 Canada inc.
4006987
03051
7350341 Canada inc.
1049006
03051
Auriga ERP Consulting Inc.
4002028
04541
Auriga ERP Consulting Inc.
ORDERS the mis en cause Noel-Chafei not to, directly or indirectly , withdraw or dispose of funds, securities or other property in the bank accounts bearing the numbers [...] and [...] with the third party Royal Bank of Canada having a branch at 3131 , boulevard de la Côte Vertu, room F-1, in the city of Montreal ( S ain t-Laurent ) , province of Quebec, H4R 1P8 ;
ORDERS the respondent Mohamed Kada Mesli not to , directly or indirectly , assign, encumber, alter, destroy and/or alienate the immovable with the building erected on it bearing the civic number [...] , in the city of Montreal ( Saint-Laurent), province of Quebec, [...] , known and designated as being lot number [...] ( [...] ) of the Cadastre of Quebec, in the registration division of Montreal;
ORDERS the Officer of the Registry Office of the registration division of Montreal to proceed with the publication of the blocking order and this decision with respect to the immovable with the building erected on it bearing the civic number [.. .] , in the city of Montreal (Saint-Laurent), province of Quebec, [...] , known and designated as lot number [...] ( [...] ) of the Cadastre of Quebec, in the registration division of Montreal;
ORDERS the third party Royal Bank of Canada , having a branch at 3131 , boulevard de la Côte - Vertu, local F-1, in the city of Montreal ( S ain t-Laurent ) , province of Quebec, H4R 1P8, to not to dispose, directly or indirectly, of the funds, securities or other property that it has on deposit or of which it has custody or control for the respondent Mohamed Kada Mesli , 7350341 Canada inc. and Auriga ERP Consulting inc., in particular in the following bank accounts :
No Account
Branch
Incumbent
[...]
03051
Mohamed Kada Mesli
[...]
03051
Mohamed Kada Mesli
[...]
03051
Mohamed Kada Mesli
[...]
03051
Mohamed Kada Mesli
1040120
03051
7350341 Canada inc.
4006987
03051
7350341 Canada inc.
1049006
03051
Auriga ERP Consulting
ORDERS the mis en cause Banque Royale du Canada , having a branch at 4119, rue Jean-Talon Est, in the city of Montreal ( Saint-Léonard ) , province of Quebec, H1S 1J5, not to divest, directly or indirectly , funds, securities or other property that it has on deposit or of which it has custody or control for the respondent Mohamed Kada Mesli, 7350341 Canada inc. and Auriga ERP Consulting Inc. , in particular in the following bank account :
No Account
Branch
Incumbent
4002028
04541
Auriga ERP Consulting Inc.
ORDERS the mis en cause RBC Direct Investing inc. , having a branch at 1, Place Ville-Marie, ground floor, in the city of Montreal, province of Quebec, H3B 3Y1, not to dispose, directly or indirectly, of the funds, securities or other property that she has on deposit or of which she has custody or control for the respondent Mohamed Kada Mesli , 7350341 Canada inc. and Auriga ERP Consulting inc., in particular in the following brokerage accounts :
No Account
Branch
Incumbent
[...]
N / A
Mohamed Kada Mesli
[...] (CAN)
N / A
Mohamed Kada Mesli
[...] (US)
N / A
Mohamed Kada Mesli
[...]
N / A
Mohamed Kada Mesli
DECLARES that, given the risk to the integrity of the financial markets and to the public as well as the urgency of the situation, this decision comes into force, without a prior hearing, subject to giving the parties the opportunity to file to the Court a notice of contestation within fifteen (15) days ;
ORDERS the Autorité des marchés financiers to notify this decision to the parties.
Under the third paragraph of section 115.1 of the Act respecting the regulation of the financial sector , the parties have 15 days from this decision to file a notice of their contestation with the Tribunal . A form for this purpose is available on the Tribunal's website.
Any party has the right to be represented by a lawyer. However, legal persons and entities that do not have legal personality are required to be represented by a lawyer before the Tribunal.
Pursuant to Section 250 of the Securities Act and Section 120 of the Derivatives Act , the freeze orders come into effect on April 18, 202 2 and will remain in effect for a period of 12 months , i.e. until April 17, 202 3 , unless they are modified or revoked before the expiry of this term.
The other conclusions become effective on the date of the decision, unless otherwise provided, and will remain in effect until they are modified or revoked.
Mr. Jean-Pierre Cristel
Administrative judge
Mr. Jean-Benoît Hébert and Mr. Isabelle Bouvier
( Financial Markets Authority litigation )
For the Financial Markets Authority
Hearing date :
April 12, 2022
[1] CQLR, c. V-1.1.
[2] CQLR, c. I -14.01.
[3] CQLR, c. E-6.1.
[4] Exhibit D-1.
[5] Exhibit D-5.
[6] Exhibit D-4.
[7] Exhibit D-6.
[8] Exhibit D-7.
[9] CQLR, c. E-6.1, r. 1.
[10] The Autorité's request was amended during the hearing, on April 12, 2022, by replacing in paragraph 193 the figure 2,346,536.00 USD by 2,298,196.00 USD .
[11] These three issuers are listed on the OTC Markets Group (“ OTC Markets ” ) stock exchange in the United States and are commonly referred to in the English-speaking world as “ penny stocks ”.
[12] Act respecting the regulation of the financial sector , p rec , note 3, s. 115.1.
[13] Exhibit D-28.
[14] Exhibit D-3, page 90, lines 24 and 25.
[15] Exhibit D-30.
[16] Exhibits D-8 and D-40 to D-49.
[17] Exhibits D-64, D-65 and D-66.
[18] Exhibits D-8, D-41, D-42 and D-67 to D-70.
[19] Exhibits D-35, D-35-1, D-36, D-36-1, D-37 and D-37-1 to D-37-7.
[20] Exhibit D-33.
[21] Exhibit D-33-1.
[22] Exhibits D-109, D-110 and D-122.
[23] Exhibit D-31.
[24] Exhibit D-107.
[25] Exhibits D-109 and D-110.
[26] Exhibit D-123.
[27] Exhibit D-88.
[28] Exhibit D-89.
[29] Exhibit D-62. Between March 29 and September 27, 2021, Respondent Ramy Kamaneh allegedly purchased a total of 94,201,395 shares of MJWL at an average price of USD 0.00566, all for a sum of USD 524,648 . The Court notes that the evidence collected by the AMF also reveals that on October 30, 2020, this respondent entered into a consumer proposal in the context of bankruptcy proceedings and that he then declared a liability of $248,544 and an asset of $ 1,507 (Exhibit D-2).
[30] Exhibit D-52.
[31] Exhibit D-11.
[32] Exhibit D-57.
[33] Exhibits D-58, D-58-1 to D-58-22, D-71 and D-116.
[34] Exhibit D-59.
[35] Exhibit D-52.
[36] Exhibit D-52 (Between January 13, 2020 and April 29, 2021, MJWL's closing stock price fluctuated between $0.000001 and $0.00485).
[37] See paragraph[23]of this decision as well as exhibits D-35, D-35-1, D-36, D-36-1, D-37, D-37-1 to D-37-7.
[38] See paragraph[21]of this decision as well as exhibits D-8 and D-40 to D-49.
[39] Exhibit D-63.
[40] See paragraph[26]of this decision as well as exhibits D-109 and D-110.
[41] Exhibit D-17.
[42] Exhibit D-10.
[43] Parts D-10 and D-81
[44] Exhibits D-10 and D-81.
[45] Exhibits D-10 and D-81 as well as D-77.
[46] Exhibit D-72.
[47] See paragraphs[26]and[32]of this decision as well as exhibits D-109 and D-110.
[48] Exhibit D-17.
[49] Exhibit D-83.
[50] Exhibit D-84.
[51] Exhibits D-76 and D-76-1 to D-76-11.
[52] Exhibit D-79.
[53] Exhibit D-72.
[54] Exhibit D-72 (Between January 6, 2020 and July 25, 2021, ICOA's closing stock price fluctuated between $0.000001 and $0.002465).
[55] See paragraph[22]of this decision as well as exhibits D-8, D-41, D-42 and D-67 to D-70.
[56] Exhibit D-82.
[57] Exhibit D-8.
[58] Exhibit D-85. As of October 31, 2021, the respondent Ramy Kamaneh still held 17,050,000 ICOA shares (Exhibit D-86).
[59] Exhibits D-10 and D-98.
[60] Exhibit D-94.
[61] Exhibit D-95 to D-95-3.
[62] See paragraphs[21],[23]and[32]of this decision.
[63] Exhibit D-88.
[64] Exhibit D-89.
[65] Exhibit D-97.
[66] Exhibit D-96.
[67] Exhibit D-90.
[68] Exhibit D-90 (Between January 3, 2020 and May 17, 2021, AAPT's closing stock price fluctuated between $0.000001 and $0.0022).
[69] Exhibit D-100.
[70] Exhibit D-99.
[71] Exhibits D-17 and D-101.
[72] Exhibit D-17.
[73] See paragraphs[21],[22]and[23]of this decision.
[74] See paragraphs[24]and[25]of this decision.
[75] See paragraph[26]of this decision.
[76] On May 27, 2021, MJWL issued a press release in which it refers to Caduceus Software System (Exhibit D-116).
[77] Exhibit D-115.
[78] Exhibits D-109, D-110 and D-114.
[79] Exhibit D-8.
[80] Exhibits D-117, D-118, D-126 and D-127.
[81] Exhibits D-107, D-109, D-110 and D-122.
NOTICE:
The reader must ensure that the decisions consulted are final and without appeal; consulting the plumitif proves to be a useful precaution.
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