The Ontario Securities Commission (OSC) has named Ben Ward, Peter Strang and Silvio Serrano in a fraud case relating to activities conducted at the helm of the Canada Cannabis Corporation.
The statement of allegations released today purports the three men, CEO and VPs of CCC respectively, raised over CAD$11M from investors in Ontario and accuses them of “leaving behind a company depleted of all investor funds without ever having engaged in the cultivation or distribution of cannabis.”
CCC’s management is accused by the OSC of syponing off more than $3M from the company through a personal loan to a company owned by Serrano, and making no attempt to collect either the principal amount nor any interest payments.
The documents released today paints a picture of a management team that habitually exaggerated their qualifications and the company’s capabilties with the aim of misleading investors.
Some of these allegations are as follows:
Prior to the incorporation of CCC, in January 2014, Ward, Strang and Serrano created an investor brief for CCC dated January 16, 2014 (the “Investor Brief”) and used it to solicit investors. The Investor Brief contained numerous untrue statements (collectively, the “Misleading Statements”), including:
(a) that CCC’s “Core Business” included Growlite Canada (“Growlite”), a
horticultural lighting company. This was false as CCC had yet to be incorporated;
(b) that “CCC has purchased 45% of [Growlite].” This was false as CCC had not yet
entered into an agreement to make the investment in Growlite. CCC had not made
the equity investment nor the loan to Growlite at this time;
(c) that Growlite sales in the first month of business totalled 2,000 units. This was false
as Growlite did not achieve this level of sales volume; and
(d) that Ward held a doctorate degree. This was false as Ward never obtained a PhD
The regulator has called for all three men named above cease trading securities or derivatives, to resign from any positions they may hold as a directors or officers of securities issuers, to pay a fine of $1M, and basically preclude themselves from the capital markets.
The full list of claims and reprimands against all three can be found on the OSC’s website. The allegations against Ward, Serrano and Strang have not been proven.