The Ontario Securities Commission has filed securities fraud charges against Weizhen Tang, a Toronto businessman who billed himself as "the Chinese Warren Buffett" and was accused of running a Ponzi scheme.
Yesterday, the province's stock market watchdog laid a total of 12 charges against Tang and his companies, Oversea Chinese Fund Limited Partnership and Weizhen Tang & Associates.
Tang "will be defending the allegations. He will speak when his time comes during the court process," his lawyer, Calvin Barry, said yesterday.
A hearing is scheduled for June 24 in the Ontario Court of Justice.
The commission alleges that Tang collected more than $40 million from more than 100 investors, including residents of Ontario.
The charges include securities fraud, unregistered trading in securities, illegal distributions of securities and making prohibited undertakings with the intention of effecting trades in securities, which were alleged to have taken place between Jan. 1, 2006, and March 31, 2009. The province's Securities Act states that no person or company can give written or oral representations on the future value or price of a security.
Each offence carries a maximum fine of $5 million, or a jail sentence of five years less a day, or both.
In March, the OSC slapped Tang and his companies with a court order to freeze assets, as well as a cease trade order.
The OSC said in its release yesterday that it has been working with the U.S. Securities and Exchange Commission in its investigation.
Tang is also facing similar charges by the U.S. Securities and Exchange Commission. The SEC alleges that Tang raised capital from U.S. investors by offering and selling limited partnership interests in WinWin Capital Limited Partnership, a Texas-based company he controls.
The OSC first raised allegations in March that Tang may have been operating a Ponzi scheme worth as much as $60 million (U.S.). Tang reportedly told investors that money from new investors was being used to pay out existing investors.
He also told OSC investigators that the fund lost $15 million in 2007, but he did not disclose the loss to investors.
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