A couple of weeks after three more individuals linked with the bankrupt Montreal financial group Mount Real Corp. were ordered to pay fines ranging from $7,000 to $104,500, its former president now faces charges in an another alleged fraud that dates back to 1998.
Lino Matteo was accused yesterday of conspiring to divert more than $120 million from scandal-plagued Montreal animation company Cinar to several investment companies in the Bahamas tied to Norshield Asset Management, which collapsed into bankruptcy in 2005.
Matteo, who was ordered in three years ago to pay $18,000 in fines after being found guilty of ethical violations by a three-person disciplinary committee of the Quebec Order of Certified Management Accountants, asked for a legal-aid lawyer to represent him in future proceedings. Matteo, whose wife took out a $50,000 mortgage on a property to secure his release, cannot leave the country and is not allowed to take part in investment work.
Approximately 1,600 retail investors lost $130-million on unregistered investment notes issued by Mount-Real and its affiliated companies. Mount Real was a firm that provided management and accounting service and strategic advice to companies and individuals. Its principal business activity, though, was selling magazine subscriptions. In operation from 1997 to 2005, Mount Real’s structure was extremely complex, with up to 120 companies linked to it. A Toronto Stock Exchange listed company, the company boasted $5.7-million in revenues and $89.7-million in assets in fiscal 2004. In November 2005, the Quebec securities regulator shut down its offices after a probe.
On January 24, 2007, the AMF filed 619 charges against 24 individuals who acted as representatives in the matter of Mount Real Corporation and its subsidiaries. The Crown is still examining whether criminal charges will be laid. “We have to be patient with the file,” said Crown prosecutor Matthew Ferguson. “It’s complex evidence of an international scale and there’s an abundance of evidence as well, so we have to take our time. We have to be patient in order for this to come to court.”
In the meantime, on February 15, 2011, René Proteau was fined $7,000 by Court of Quebec justice Claude Parent after pleading guilty last November to seven counts of illegal practice as a securities dealer and adviser.
On February 8, 2011, William Marston, once one of Quebec’s most successful investment representatives, was fined $79,500 by Court of Quebec justice Jean Pierre Boyer after pleading guilty to 17 charges. He was also $25,000 for distribution without a prospectus in the Norshield case.
On February 2, 2011, Nick Mylonakis was fined $70,000 by Court of Quebec Justice Louise Villemure after pleading guilty last November to 22 charges, including 10 counts of illegally pursuing activities as a securities dealer, nine charges of aiding with an illegal distribution, and three charges of making misrepresentations.