NSSC orders fraudsters to pay nearly $2M

A pair of fraudsters have been banned and ordered to pay almost $2 million in penalties, costs and disgorgement by the Nova Scotia Securities Commission (NSSC).

In May, the NSSC found that the two men, Douglas Rudolph and Peter Mill, and their companies (CFG CN Ltd., and CanGlobe International Capital Inc.) defrauded investors and acted as dealers without registration, among other violations.

The regulator has now ordered $1 million in penalties against them ($600,000 for Rudolph and $400,000 for Mill). It has also ordered that they each pay $435,205 in disgorgement, and that they jointly pay $69,500 in costs.

Both men have been permanently banned.

“Given the extent of the fraud, the number of victims impacted and the sheer volume of breaches of securities laws in question, it is necessary and appropriate for the respondents to be prohibited from participating in the Nova Scotia capital markets,” the NSSC said in its decision.

NSSC staff sought larger monetary penalties in the case. They asked for $1.8 million against Rudolph and $600,000 against Mill.

However, the commission ruled that lower amounts were warranted, noting, “The panel must ensure that any administrative penalty issued is sufficiently high to act as a deterrent for similar activities in the future, proportionate to the offences in question and fit [and] proper for the respondents.”

The commission also ordered disgorgement, which was not originally sought, ruling that Rudolph and Mill should “each to pay one-half of the net amounts they inveigled from the witnesses,” which was calculated as $870,410.

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.