Abraham Grossman Sentenced to Three Years in Jail for Breaching Ontario Securities Act

TORONTO, June 16, 2011 /CNW/ - Justice Joseph Kenkel of the Ontario Court of Justice yesterday sentenced Abraham Grossman to three years in jail for his role in running a "boiler room" operation involving shares of Shallow Oil and Gas Inc. This sentence is consecutive to a sentence of 21 months imposed on Mr. Grossman on May 4, 2011 for previous violations of the Act in the Maitland Capital Inc. matter.

Justice Kenkel sentenced Mr. Grossman to a total of three years in jail for fraud, trading in securities without registration, trading in securities without a prospectus, trading in securities of Shallow Oil and Gas Inc. when he was prohibited from trading in securities by an order of the Ontario Securities Commission (OSC) and providing misleading or untrue statements to OSC staff.

On May 18, 2011, Justice Kenkel found Mr. Grossman, Eric O'Brien, Abel DaSilva and Shallow Oil and Gas Inc. each guilty on several counts of breaching the Act, including fraud, in relation to the boiler room operation.

The OSC laid quasi-criminal charges against Mr. Grossman, Mr. O'Brien, Mr. DaSilva and Shallow Oil and Gas Inc. on June 12, 2008 in relation to this matter. The boiler room operation started in the fall of 2007 and was terminated in January 2008 when the OSC executed a search warrant at the Shallow Oil and Gas Inc. office in Markham, Ontario. At the time of the raid, the accused were actively soliciting investors across Canada using high pressure sales tactics along with false and misleading information. They had raised approximately $250,000 before the OSC shut down the operation.

A sentencing hearing for Mr. O'Brien, Mr. DaSilva and Shallow Oil and Gas Inc. is scheduled for July 14, 2011 at 9:30 a.m. in Courtroom 200 at the Ontario Court of Justice, 50 Eagle Street, Newmarket, Ontario.

Mr. Grossman, Mr. O'Brien and Mr. DaSilva continue to be subject to a cease trade order prohibiting them from trading in securities. The cease trade order was first made by the OSC on January 16, 2008 in relation to this matter. The cease trade order and other documents related to this matter are available on the OSC website at www.osc.gov.on.ca.

Under section 122 of the Act, the OSC has the authority to lay quasi-criminal charges against individuals or companies in the Ontario Court of Justice for alleged violations of the Act. Quasi-criminal means that a jail term is a possible sanction if a defendant is convicted of a violation of the Act. The OSC pursues cases in court in order to seek sanctions and penalties that send a strong message of deterrence to those who try to exploit investors.

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.

SOURCE Ontario Securities Commission

For further information:

For Media Inquiries:

Wendy Dey
Director, Communications & Public Affairs
416-593-8120

Carolyn Shaw-Rimmington
Manager, Public Affairs
416-593-2361

Dylan Rae
Media Relations Specialist
416-595-8934

For Investor Inquiries:  

OSC Contact Centre
416-593-8314
1-877-785-1555 (Toll Free)


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