Fraudster banned by Ontario tribunal

The perpetrator of an alleged RRSP unlocking scheme that raised $20.1 million from hundreds of investors has been permanently banned by Ontario’s Capital Markets Tribunal, based on his fraud conviction.

The Ontario Securities Commission (OSC) sought the ban on Stephane Gagnon, who was convicted last year of one count of fraud over $5,000 and one count of forgery, in connection with the alleged scheme.

According to the regulator’s application for the sanction, between August 2015 and the end of May 2021, Gagnon — who was not an advisor and wasn’t registered — fraudulently solicited $20.1 million from investors seeking access to funds in their locked-in retirements accounts.

While investors received about $12.2 million of their money back, almost $7.8 million remains outstanding, the OSC said — as he took approximately 30% of that money, and forged tax opinions in an effort to sustain the scheme.

Many of the investors were also left with tax liabilities as a result of the scheme, in addition to losing their money, the regulator noted.

Following his conviction, Gagnon was sentenced in the Ontario Superior Court of Justice to five years in custody, less time served in pre-trial custody (leaving him with 610 days to serve), ordered to pay $4 million in restitution, and he received a fine in lieu of forfeiture of $7.4 million, along with other sanctions.

The OSC sought a ban against him “to restrain potential future misconduct” and to deter others, it said.

The application was brought without Gagnon having an opportunity to be heard.

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.