After escaping ASC sanctions, man faces new charges

Last month, an Alberta court ruled that a man who owed $600,000 in regulatory sanctions didn’t have to pay as the debt didn’t survive his bankruptcy proceedings.  Now that same man is facing new charges from the Alberta Securities Commission (ASC).

The ASC and the Integrated Market Enforcement Team (IMET) in Alberta announced that Theodor Hennig has been charged with two counts of violating an ASC ban against him. He is accused of trading while prohibited, and acting as director or officer while prohibited.

The allegations have not been proven. His first court appearance in the case is slated for March 15 in Calgary.

Back in 2008, an ASC hearing panel imposed sanctions on Hennig after finding that violated securities rules. He was banned from trading for 20 years (to 2028), permanently banned from serving as an officer or director, and ordered to pay $575,000 in monetary sanctions.

Now, the ASC is alleging that he violated the prohibitions ordered against him by purchasing securities under the accredited investor exemption in 2018, and by acting as the CEO and director of an issuer, Octopus Technologies Inc., from October 2019 to June 2020.

The new charges follow a ruling in December 2021 by the Court of Appeal of Alberta, which found that the monetary sanctions ordered against Hennig by the ASC didn’t survive his bankruptcy (he was discharged from bankruptcy in 2015).

Sanctions involving fraud, and sanctions ordered by courts, can’t be wiped out by bankruptcy, but the court found that the ASC didn’t allege fraud against him in its 2008 regulatory case.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.