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
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:
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Director, Communications & Public Affairs
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OSC Contact Centre
1-877-785-1555 (Toll Free)