Business Court of Quebec Quebec White-collar crimes

Montreal man ordered to pay largest fine ever issued for Quebec securities offences

A Montreal man was fined $11.2 million, the largest fine ever issued in Quebec for securities offences, and sentenced to a three-month jail sentence for fraudulent penny stock practices commonly referred to as a “pump and dump” scheme.

Jean-François Amyot is among one of five people and two companies that plead guilty to charges laid against them nearly three years ago by the Quebec financial watchdog, Autorité des marchés financiers, during a trial earlier this year.

They were accused of market manipulation involving five companies, including Spencer Pharmaceutical Inc., Energy 1 Corp., Andes Gold, Kender Energy et Wanderport Corp. They were accused of attempting to influence the market price or the value of securities by means of unfair, improper or fraudulent practices, and misrepresentation, breaching articles 195.2 and 207 of the Quebec Securities Act.

A plea agreement reached earlier this year that was approved by the Court of Quebec led Amyot to plead to five counts of market manipulation and two counts of conspiracy.

  • Under the same deal, Francis Mailhot plead guilty to three counts of market manipulation and one count of conspiracy, and was fined $5 million.
  • Daniel Ryan plead guilty to two counts of market manipulation and was fined $500,000. Ryan plead guilty to another count of market manipulation in another matter and was fined $225,000.
  • Conseils Hilbroy Inc. plead guilty to one count of market manipulation and was fined $1 million.
  • IAB Média Inc. plead guilty to one count of market manipulation and was fined $500,000.
  • Andrew Barakett plead guilty to one count of market manipulation and was fined $50,000.
  • Eric Boyd plead guilty to one count of market manipulation and was fined $30,000.

“The manipulation of securities on the markets is a very serious offence that deserves appropriate sanctions,” said Louis Morisset, AMF’s president, in a statement. “The convictions obtained in this case are the culmination of lengthy investigative procedures and the sustained work of our teams of investigators and prosecutors.”

Amyot was involved in a similar scheme several years ago. In October 2015, the U.S. Securities and Exchange Commission (SEC) described Amyot as a “Canadian Pump-And-Dump Operator” and fined him, IAB Media Inc. and Hilbroy Advisory Inc. (two Canadian companies controlled by Amyot, according to the SEC) and Spencer Pharmaceutical Inc., a publicly-traded company with addresses in both Boston, Massachusetts, and Canada, to more than $7 million.

According to the SEC’s complaint, filed on December 17, 2012, Amyot, Spencer, Hilbroy, and IAB Media were involved in a “pump-and-dump” scheme in 2010 and 2011 involving Spencer’s publicly-traded stock.

According to the complaint, Amyot worked with the three companies, as well as Spencer’s two officers and directors, to create and disseminate false and misleading press releases and to otherwise promote Spencer’s stock, including via websites and newsletters.

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