TORONTO – The Ontario Securities Commission (OSC) today announced that Mujahid Ali Syed and Sanjiv Katyal have been charged with fraud and other offences under the Securities Act.
Mr. Syed, a former registrant, allegedly accepted approximately $2 million from Ontario investors, most of whom were Pakistani-Canadians, on the pretense that he would invest the funds and generate significant returns. Mr. Katyal, a registrant and CIBC bank manager at the time, is alleged to have referred the potential investors to Mr. Syed after selecting them from the lineup at a Mississauga bank branch he managed based on their shared background and ethnicity.
The allegations describe a scheme in which investors were encouraged to borrow against their homes and in the names of family members to raise more funds to invest, with one elderly investor paying over $1 million to the accused. Investor funds were allegedly directed into Syed’s company, Global Marketing Inc., and subsequently diverted for personal use by Syed and his family, withdrawn in cash or paid to Katyal for referring investors.
“As alleged, Mr. Syed and Mr. Katyal preyed on the trust of vulnerable members of their community to raise funds for their fraudulent scheme by exploiting their shared cultural heritage and role as gatekeepers of the investment industry,” said Jeff Kehoe, Director of Enforcement at the OSC. “The OSC will continue to pursue individuals who commit affinity frauds, as well as those who abuse the trust placed in them as registrants and are responsible for stopping this type of conduct.”
Mr. Syed’s charges include fraud, contrary to s. 126.1(1)(b) of the Securities Act, trading without registration, contrary to s. 25(1), and distributing securities without a prospectus, contrary to s. 53(1). Mr. Katyal was also charged with fraud and trading without registration, as well as advising in securities without registration, contrary to s. 25(3) of the Securities Act. The accused are scheduled to appear in court on Monday, February 7, 2022, at 9:00 a.m. in Courtroom #104 at A. Grenville and William Davis Courthouse, 7755 Hurontario Street, Brampton, Ontario.
The OSC acknowledges the collaborative assistance of the Peel Regional Police Fraud Bureau to help bring this investigation to a successful conclusion.
This investigation was conducted by a team within the OSC Enforcement branch that investigates quasi-criminal and criminal offences related to securities, including the investigation of alleged recidivists. Their primary objective is to protect investors and further enhance confidence in the Canadian capital markets through effective enforcement.
To date, OSC Enforcement has pursued 57 quasi-criminal and criminal matters involving 82 accused.
Charges laid under the Securities Act are prosecuted by the OSC. Charges laid under the Criminal Code are prosecuted by the Ministry of the Attorney General.
Visit the OSC’s website for tips on how to avoid falling victim to an affinity fraud scheme.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at https://www.osc.ca.
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