The Alberta Securities Commission (ASC) has officially charged four individuals, including a former CEO and a director of a Canadian technology company, with orchestrating a market manipulation scheme and failing to meet insider reporting obligations.
The charges were detailed in a notice of hearing issued against Calgary residents Rahim Shiraz A-K Mohamed and Alnoor Fatehali Nathoo, along with British Columbia residents Marc Evan Levy and Michael Baron.
From March 2019 to November 2020, the accused allegedly engaged in deceptive trading practices involving shares of Softlab9 Software Solutions Inc., which has since been rebranded as CleanGo Innovations Inc. During the period of the alleged offences, Mohamed served as CEO, and Nathoo was a director of the company.
The ASC's investigation claims that the group manipulated the market through a series of strategic trades, including upticks, downticks, high closes, wash trades, and bid support. These actions purportedly created a misleading impression of market activity and artificially manipulated the stock price of Softlab securities.
Further allegations in the notice of hearing include failures in compliance with insider reporting requirements. Levy, in particular, is accused of not adhering to the early warning requirements, which are triggered when an individual acquires more than 10 percent of a company’s outstanding shares.
The accusations laid out by the ASC have not yet been proven in court. The defendants will have the opportunity to respond to the charges at a procedural appearance scheduled for May 21. The hearing will occur in the ASC Hearing Room in Calgary, Alberta.
The ASC has extended its gratitude towards several regulatory bodies, including the British Columbia Securities Commission, Autorité des marchés financiers, Canadian Investment Regulatory Organization (CIRO), Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and Financial Industry Regulatory Authority (FINRA) for their assistance in the investigation.
A copy of the notice of hearing can be found on the ASC website.