OSC uses inter-jurisdictional order to ban U.S. fraudster

The Ontario Securities Commission has permanently banned Morrie Tobin, a California resident who was formerly registered as an Ontario limited market dealer, for his role in a U.S. pump-and-dump scheme.

Tobin pleaded guilty in Massachusetts to conspiracy to commit securities fraud for his role in a scheme involving microcap companies between 2013 and 2018.

According to the OSC Capital Markets Tribunal’s reasons and decision, Tobin “admitted to committing securities fraud by disguising his ownership and control of various securities, and employing paid promotional campaigns and manipulative trading techniques to artificially inflate the price and trading volume of those stocks so that he and others could secretly sell their shares of those stocks at a substantial profit.”

Tobin was sentenced in Massachusetts in 2020 to more than a year in prison. He was also ordered to forfeit US$4 million and to pay almost US$2 million in restitution. In 2021, his sentence was amended to four months incarceration plus eight months home confinement, with two years of supervised release.

The OSC used an inter-jurisdictional enforcement order to ban Tobin, who was previously registered with the commission from 2004 to 2005 as a trading officer under the category of limited market dealer with Powerone Capital Markets Limited.

The Capital Markets Tribunal can make inter-jurisdictional orders when a person or company has been convicted of securities offences in another jurisdiction and a ban is deemed to be in the public interest.

“Serious fraudulent conduct warrants permanent removal from the capital markets to protect investors and to deliver a deterrent message to others who might contemplate similar misconduct,” the decision stated.

Tobin’s status as a former registrant was also “an important consideration.”

The investigation of Tobin’s securities fraud played a key part in the U.S. college admission’s scandal, which revealed wealthy California parents conspired to get their children into universities. Tobin tipped prosecutors to the bribery scheme.

Mark Burgess

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Mark was the managing editor of Advisor.ca from 2017 to 2024.