Wayland Group (MRRCF)

[Stockshound]

Former Wayland Group CEO Accused of Fraud by Ontario Securities Commission

It’s been a rough week for former Wayland Group (CSE: WAYL) CEO Ben Ward, who has seen both a class action filed against him as well as a Notice of Hearing which was filed Friday. The Notice of Hearing is related to the time he spent at Cannada Cannabis Corp, wherein the Ontario Securities Commission has laid several allegations against Ward and two business partners, Peter Strang and Silvio Serrano.

This isn’t the first time that Canada Cannabis Corp (CCC) has come up between Ben Ward and the OSC. Back in February of 2018, Wayland Group, then known as Maricann, had to cancel a proposed $70 million raise at the time due to an ongoing investigation of Ben Ward in relation to CCC amongst other issues.

In the latest series of allegations, the Ontario Securities Commission alleges the following:

Ward and his two partners siphoned off more than $3.2 million of investor funds through making a loan to a company owned by one of the partners. The loan was written off with no attempt of recovery.
Making untrue statements in an investor brief prior to the raise, including that Growlite Canada was its “core business”, but the firm was not yet incorporated.
Claiming that CCC had a 45% stake in Growlite, yet no agreement was entered with Growlite, and no funds had been transferred at the time.
Falsification of sales figures for Growlite
Falsification of education background. Ward claimed he had a doctorate but this was found to be false.
Canada Cannabis Corp had raised money by stating that they would be focused on growing cannabis. While an initial application for a cultivation license was entered with Health Canada, the application was withdrawn subsequently two years later without informing investors of the change.
Misuse of investor funds. Growlite was owned by Serrano. No valuation was obtained on the company, the price of which was determined during a 20 minute meeting between the three partners.
In total, 45% of Growlite was to bought for $1 million, followed by a $3 million loan. The funds of which were instead sent to a number of corporations established among Serrano’s family members, and the loan was never repaid.
In mid-2015, $800,000 worth of Growlite inventory was stolen under suspicious circumstances. The trio never reported the matter to the police or made an insurance claim, resulting in the further misuse of investor funds.

In total, the Ontario Securities Commission is alleging the trio including Benjamin Ward committed securities fraud. The result is the breach of the following.

Ward, Strang, Serrano, and CCC directly or indirectly engaged in or participated in acts, practices or courses of conduct relating to securities that they each knew or reasonably ought to have known perpetrated a fraud on persons or companies, contrary to subsection 126.1(1)(b) of the Act;
Ward, Strang and Serrano, as officers and/or directors or de facto directors of CCC, authorized, permitted, and/or acquiesced in the breaches of subsection 126.1(1)(b) of the Act by CCC and thereby failed to comply with Ontario securities law pursuant to section 129.2 of the Act; and,
Ward, Strang, Serrano, and CCC have engaged in conduct that is contrary to the public interest.

As a the result of these actions, the Ontario Securities Commission is seeking that all securities in Canada Cannabis Corp cease to be traded for a period that is to be set by the commission.

The commission is also seeking that Ben Ward and his partners cease to be eligible to trade securities permanently, that they are stripped of any director or management title for a public company and not allowed to act in such capacity again, and that a maximum of a $1 million fine per each failure listed above to comply with securities law.

The hearing for Ben Ward and his associates has been set to take place on September 30, 2019. The full statement of allegations can be found herehttps://thedeepdive.ca/former-wayland-group-ceo-accused-of-fraud-by-ontario-securities-commission/