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An Alberta man who illegally sold investors on a failed cryptocurrency scheme that promised spectacular returns has been ordered to pay a $40,000 penalty and banned from trading for at least eight years.
‘WhaleClub members were exposed to significant financial risks that they did not fully appreciate when they invested’
An Alberta man who illegally sold investors on a failed cryptocurrency scheme that promised spectacular returns has been ordered to pay a $40,000 penalty and banned from trading for at least eight years.
Jan Gregory Cerato raised at least $200,000 from 16 investors who paid a minimum of $10,000 or the equivalent in bitcoin, an Alberta Securities Commission investigation found.
Cerato, who must also pay the $125,000 cost of the ASC investigation and related hearings, was not registered with the ASC or authorized to sell securities.
An ASC panel heard he launched his WhaleClub team in December 2017 through online forums and in-person workshops, targeting investors new to cryptocurrency trading. Club members had to contribute at least $10,000 and were told they’d be repaid their principal investment and 75 per cent of any profit after 90 days.
Cerato did not file a prospectus for WhaleClub and failed to explain the risks to investors, the ASC said.
“One WhaleClub promotion suggested that an investment could double every few weeks, and Cerato told an investor that his capital would multiply tenfold in a short period of time,” the decision states.
The trading scheme instead failed to generate any profits and investors received only a small portion of their initial investment, the investigation found.
“WhaleClub members were exposed to significant financial risks that they did not fully appreciate when they invested,” according to the decision.
Cerato told investigators his WhaleClub was “an experiment with cryptocurrency” and a “casual situation,” it said.
The hearing panel noted Cerato, who also uses the surname Strzepka, is a significant risk to investors and that he “accepted little or no responsibility or regret and instead blamed others and exhibited contempt towards those who were harmed by his actions.”
The investigation found he sent threatening messages to at least three investors ahead of the ASC hearing.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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