TORONTO, Sept. 28, 2012 /CNW/ - In a decision released yesterday, an
Ontario Securities Commission panel found that Gordon Driver (Driver),
Axcess Automation LLC and other companies (the Axcess Companies),
Steven M. Taylor (Taylor), Berkshire Management Services Inc. and other
companies (the Taylor Companies), Reynold Mainse and World Class
Communications Inc. (WCC) breached the Ontario Securities Act in
connection with raising more than $15 million from 252 investors (all
figures in US dollars).
In its decision, the Panel found that Driver, the Axcess Companies,
Taylor and the Taylor Companies breached the Securities Act by
committing a fraud upon investors, trading securities without being
registered and trading securities without filing a prospectus with the
Commission. Reynold Mainse and WCC traded securities without
registration, but were not party to the fraud.
The Panel found that two schemes were operated. Both schemes were
premised on Driver's purported use of investors' funds to trade E-mini
S & P 500 futures using proprietary software to generate superior
returns. In fact, of more than $15 million received from investors by
Driver, only about $3.6 million was used to trade in E-mini 500 S & P
futures, and Driver incurred a cumulative net loss of about $3.5
million. The Panel found that despite this, Driver represented that the
Axcess Investments were generating substantial returns, clearly knowing
that his fraudulent acts would cause deprivation to investors. The
Panel held that Taylor was aware of the fraudulent nature of his and
Driver's actions, and made false and misleading representations to
investors and put their funds at significant risk.
As part of the schemes, about $10 million was returned to investors. The
Panel found that even though not all investors suffered losses, their
money was put at significant risk because most of it was diverted to
pay Driver's personal expenses, commissions, or returns to investors.
In many cases, investors were paid with proceeds of investments made by
The Panel ordered the parties to appear before the panel on November 7,
2012 for a hearing with respect to sanctions and costs.
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. Cease
trade orders prohibit individuals or companies from trading in
securities. Investors are urged to check the registration of any person
or company offering an investment opportunity and to review the OSC
investor materials available at www.osc.gov.on.ca.
Staff acknowledge and appreciate the assistance provided in this matter
by staff of the U.S. Securities and Exchange Commission and the
Commodity Futures Trading Commission.
SOURCE: Ontario Securities Commission
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