R.S.O. 1990, c. S.5, AS AMENDED
IN THE MATTER OF
STATEMENT OF ALLEGATIONS OF STAFF OF THE ENFORCEMENT BRANCH OF THE ONTARIO SECURITIES COMMISSION
1. The respondent, Michael McGuigan ("McGuigan") is an individual who resides inMississauga, Ontario. McGuigan and Nick Poanessa ("Poanessa") were, at all materialtimes, partners of Lifeline Publications ("Lifeline"), a partnership formed pursuant to thelaws of Ontario.
2. The sole business of Lifeline was to produce a newsletter on investing in securities offeredto subscribers over the Internet called "WealthLine". McGuigan wrote the contents ofWealthLine and Poanessa was responsible for the technical and design aspects of theWealthLine website.
3. A monthly subscription to WealthLine was available to subscribers upon payment of a fee.McGuigan, through WealthLine, provided advice to subscribers on the purchase and saleof specific securities in the North American market.
4. McGuigan also provided personal advice to subscribers regarding investing in securities inresponse to individual queries he received by electronic mail.
5. McGuigan held out to subscribers that WealthLine was in the business of giving advice oninvesting in securities. In addition to the payment of a fee to receive WealthLine,subscribers were told that advice could be sought from one of WealthLine's "seniorinvestment advisers". Also, researchers were advertised as being on staff and devotingtime and effort to "research and profits".
6. Certain statements made on the WealthLine website were misrepresentations designed toinduce individuals to subscribe. For example, the website falsely advertised "seniorinvestment advisors" and "researchers" when McGuigan was the only individual givingadvice.
7. Without disclosing his interest to subscribers, McGuigan invested for his personal accountin certain of the securities that he recommended through WealthLine.
Conduct Contrary to the Public Interest
8. The conduct of McGuigan in providing advice through WealthLine was contrary to thepublic interest in the following ways:
a. he acted as an adviser without registration in contravention of subsection 25(1)(c)of the Act;
b. he recommended the purchase and sale of securities in a publication withoutdisclosing his interest in those securities; and
c. he caused and permitted misrepresentations to appear on the WealthLine webpagewhich were designed to induce individuals to subscribe.
9. Such other allegations as Staff may make and the Commission may permit.
DATED at Toronto, this 9th day of September, 1999.