Judge adds extra six months to securities fraud sentence

Judge adds extra six months to securities fraud sentence

Judge adds extra six months to securities fraud sentence

An Ontario judge added an additional six months in jail to the sentence of Abraham Grossman after the accused plead guilty to two counts of breaching cease-trade orders and one count of unregistered trading contrary to the Ontario Securities Act, the Ontario Securities Commission said in a statement.

Grossman was also sentenced to two years of probation following his jail term and was ordered to pay $155,000 in restitution. The sentence, handed down by Justice Peter Bourque of the Ontario Court of Justice, is consecutive to a three-year sentence he received in 2011 for his role in running a “boiler room” operation involving shares of Shallow Oil and Gas Inc.

Grossman admitted that between October 2009 and February 2011, he and the Strategic Gifting Group, an Ontario sole proprietorship registered by Grossman, ran a fundraising/donor introduction share-gifting program involving the trading of Dixon Perot & Champion Securities (DPC Securities) with four Ontario charities and approximately 50 donors in Ontario and elsewhere in Canada. 

In exchange for arranging introductions between the charities and the donors, Grossman and Strategic Gifting were paid 90% of the cash donations received by the charities. Grossman then delivered returns in the form of DPC Securities to the donors in amounts that exceeded their original donations.

The OSC said Grossman recruited advisors to promote the program to the public and were instructed to tell donors that they could receive tax receipts for 4-12 times the value of their original cash donation via DPC Securities. A total of $332,620 was received by Strategic Gifting as a result of this scheme. 

Grossman had previously been subject to two temporary cease trade orders (TCTO). The first TCTO came into effect in January 2006 and involved a company named Maitland Capital Ltd. The second TCTO came into effect on January 2008 and involved a Shallow Oil and Gas Inc.