CAN (ON): A $3 million fraud in the cannabis sector

The Ontario Securities Commission is mounting its first fraud case in Canada’s cannabis sector.

In a statement of allegations made public Friday, the regulator alleges that investor funds raised by Canada Cannabis Corp. were “misused.”

In addition, three individuals involved with the firm are accused of making misleading statements in communications with investors.

None of the allegations against Canada Cannabis, Benjamin Ward, Silvio Serrano and Peter Strang have been proven. An initial hearing is scheduled to take place Sept. 30 in Toronto

In the eight-page statement of allegations, OSC staff allege that Ward, Strang and Serrano “devised a scheme whereby CCC (Canada Cannabis) would use investor funds to purchase an interest in and make a loan to Growlite,” a company that was owned by Serrano.

The men are alleged to have reached a “handshake” agreement to use $1 million of investor funds to purchase a 45 per cent interest in Growlite, without hiring a valuator or addressing the conflict arising from investing in Serrano’s company.

They are accused of using a further $3 million of investor funds to finance a loan to Serrano’s firm.

Read more at business.financialpost.com


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