OSC Panel Releases Decision Against Sulja Bros. Building Supplies, Ltd., Kore International Management Inc. and Andrew DeVries for Breaches of Ontario Securities Act

TORONTO – In a decision released today, an Ontario Securities Commission (OSC) panel issued its reasons supporting findings of breaches of sections 25, 53, 126.1 and 126.2(1) of the Securities Act (Ontario) against Sulja Bros. Building Supplies, Ltd. (Sulja Nevada), Kore International Management Inc. (Kore Canada) and Andrew DeVries (DeVries) for their involvement in what Staff alleged was a “pump and dump” scheme involving Sulja Nevada securities. The scheme resulted in a profit of approximately US $5.6 million by these and other Respondents.

In its decision, the OSC panel found that, between February 6, 2006 and January 31, 2007, press releases about the prospects of Sulja Nevada were widely disseminated to the market, which contained “gross exaggerations” or were “just plain false.” These included false claims that the company had entered into cement deals that would generate hundreds of millions of dollars of revenue for Sulja Nevada.

Additionally the OSC panel found that, while these press releases were being issued, approximately half a billion shares were being illegally drawn from the treasury of Sulja Nevada and issued to numerous nominee accounts throughout North America. These nominees would, in turn, sell the shares into the market at prices inflated by the misrepresentations in the press releases, resulting in millions of dollars of trading profits.

In connection with the above scheme, the OSC panel found DeVries to have engaged in fraud, unregistered trading and an illegal distribution, contrary to the Securities Act. Kore Canada was found to have engaged in market manipulation and Sulja Nevada was found to have issued misleading and untrue press releases throughout the material period, contrary to the Securities Act.

The OSC panel had earlier rendered decisions against Petar Vucicevich, Pranab Shah, Tracey Banumas, Steven Sulja and Sam Sulja for breaches of the Securities Act in connection with their involvement in the scheme. These Respondents did not contest the allegations of Staff.

A sanctions hearing in this matter was held on November 30, 2010 with a decision on sanctions pending.

A copy of the Reasons and Decisions of the OSC panel in respect of Sulja Nevada, Kore Canada and DeVries; Vucicevich, Shah and Banumas; and Steven and Sam Sulja are available on the OSC website at www.osc.gov.on.ca.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. Investors are urged to check the registration of any person or company offering an investment opportunity and to review the OSC’s investor materials available at www.osc.ca.

 

-30-