Friday, May 18, 2007

Owner of Ottawa Senators pays fine to Ontario Securities Commission

But bear in mind that he has not admitted to any wrongdoing through his settlement.

Yahoo!: Ottawa Senators owner pays $1 million to settle with securities regulator
By Laura Bobak
TORONTO (CP) - An Ontario Securities Commission panel has formally reprimanded Ottawa Senators owner Eugene Melnyk, who will pay $1 million and be barred from being a director of the drug company that he founded for one year.
Melnyk, who founded Biovail Corp. (TSX:BVF) and helped it grow into one of Canada's biggest drug manufacturers, was accused last July of failing to file trading reports and other required disclosures in connection with offshore accounts in the Cayman Islands.

What's notable about this is neither the penalty, nor the lack of an admission of guilt. Both of those are par for the course. What's notable is that he was prosecuted for unreported offshore transactions. Offshore "tax haven" investments are often touted alongside High Yield Investment Programs (HYIPs in the parlance) by investment scammers looking to fleece unwary investors. It's a common pitch that banks and High Net Worth individuals conduct tax free offshore transactions all the time, and because of some clever loopholes in Canada's tax code, it's all perfectly legal.

Guess what, it's not.

Exhibit A is this High Net Worth individual who was prosecuted for doing just that. Of course, if some slippery joker starts pissing on your leg and telling you it's raining, and rationalizing why this won't happen to you if you give him your money, walk away.

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