TORONTO, April 25, 2012 /CNW/ - In a decision released today, an Ontario Securities Commission (OSC) panel found that Richvale Resource Corp. (Richvale) and its president, Pasquale Schiavone, took approximately $753,000 from 27 Canadian investors in a fraudulent investment scheme operating out of Toronto.
According to the panel, Richvale "operated a fraudulent scheme akin to a one-man boiler room and made material misrepresentations to induce Richvale investors into purchasing shares." The respondents' conduct included perpetrating a fraud on the investors in Richvale, making prohibited representations, and trading and distributing securities without meeting the prospectus or registration requirements of the Act. Mr. Schiavone also was found to have acquiesced in this conduct as the president and a director of Richvale.
Richvale claimed to be an exploration company; however, the panel found that of the $753,000 raised from investors, Richvale used only 6 per cent of that amount for mining claims. The remainder of the Richvale investor funds went to cash withdrawals, sales commissions, payments to directors, officers or employees, and undocumented loans to friends of employees. According to the panel, "Richvale had no underlying legitimate business."
A sanctions and costs hearing will be scheduled. Documents relating to this matter are available on the OSC website at www.osc.gov.on.ca.
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.
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