OSC Panel Releases Decision regarding Shaun Gerard McErlean and Securus Capital Inc. related to Breaches of the Ontario Securities Act

TORONTO, July 23, 2012 /CNW/ - In a decision released on July 19, 2012, an Ontario Securities Commission (OSC) panel found that Shaun Gerard McErlean (McErlean) and Securus Capital Inc. (Securus) breached the Ontario Securities Act in connection with raising approximately $14 million from eight offshore investors.

In its decision, the Panel found that McErlean and Securus breached the Securities Act by committing a fraud upon investors, trading securities without being registered, trading securities without filing a prospectus with the Commission and advising respecting securities without being registered.

The Panel held that Mr. McErlean represented to all investors that their money would be segregated in a separate account and would be used as collateral for investments in guaranteed, high-return trading.  None of the money from the investors was used for that purpose.  None of the money was kept separate and apart from the Securus bank account as was represented to investors.

The Panel found that steps were taken by Mr. McErlean, through the use of screen shots and false bank account numbers, to deceive investors into thinking their funds were separate and secure.  All the investors funds were used by Mr. McErlean to pay personal expenses, to repay previous investors and to invest in private companies in which he or his family members had a financial interest.  Ultimately the Panel found that Mr. McErlean's dishonest acts caused investors' funds to be placed at risk or lost entirely.

The Panel ordered the parties to appear before the panel on August 13, 2012 to set a date 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.

SOURCE: Ontario Securities Commission

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