VAUGHAN, Ont. — Three former directors and officers at cannabis company CannTrust Holdings Inc. have been charged with several offences under the Securities Act.
The Ontario Securities Commission and Royal Canadian Mounted Police say they have charged former vice-chairman Mark Litwin, former chairman Eric Paul and former chief executive Paul Aceto.
Each is facing charges of fraud, making false or misleading statements to the OSC and the market and authorizing, permitting or acquiescing in the commission of an offence.
Litwin and Paul also face insider trading charges and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus.
The charges come after CannTrust's licences were suspended for illegally growing thousands of kilograms of dried cannabis in unlicensed rooms in 2018 and 2019.
The OSC and RCMP allege the accused did not disclose to investors that about 50 per cent of the growing space at CannTrust’s Pelham, Ont. facility was not licensed by Health Canada and they allegedly used corporate disclosures to assert that they were compliant with regulatory approvals.
They also allege Litwin and Aceto signed off on prospectuses used to raise money in the U.S., which stated that CannTrust was fully licensed and compliant with regulatory requirements, and Litwin and Paul traded shares of CannTrust while in possession of material, undisclosed information regarding the unlicensed growing.
This report by The Canadian Press was first published June 22, 2021.
The Canadian Press