Decision in brief: Feng, Enforcement Proceeding, Sanctions and Costs, November 14, 2023
In an earlier decision, the Tribunal decided that CIM International Group Inc. and Jiubin Feng committed fraud. CIM and Feng raised $10 million from investors to develop a real estate project that Feng controlled, but they used the money for other purposes, causing investors to lose a lot of money.
In this decision, the Tribunal decided what sanctions and costs should be ordered against CIM and Feng because of their conduct.
The Tribunal decided that CIM and Feng were dishonest with investors about how their money would be used from the start, so they should jointly disgorge (give up to the Commission) $7.63 million. That amount is equal to the $10 million they raised from investors less the $2.37 million they repaid to an investor.
The Tribunal decided that CIM and Feng should each pay an administrative penalty of $500,000. These penalties are appropriate given prior decisions of the Tribunal and the seriousness of CIM and Feng’s misconduct.
The Tribunal decided that CIM and Feng should be permanently banned from participating in Ontario’s capital markets. However, Feng is allowed to trade securities in registered accounts (like a Registered Retirement Savings Plan or Tax-Free Savings Account) after he pays the money he owes the Commission.
Finally, the Tribunal dealt with costs. The Tribunal decided that CIM and Feng must jointly pay $206,769.34. The Tribunal calculated that amount by reducing OSC staff’s total costs to take into account how long the hearing was, how complicated the issues were, and the administrative penalties and disgorgement CIM and Feng must pay.