A businessman who recently reached a settlement with the P.E.I. Securities Commission says he believes he has been the target of a smear campaign mounted by local investors and officials within the P.E.I. government.
Paul Maines, director of business development with Capital Markets Technologies, among other business ventures, says his dealings with the Securities Commission have been a “tragic waste of time, effort and money. I’ve been demonized, there’s no question this was a calculated smear campaign.”
Last February, the Justice Department sent out a news release saying it was seeking a temporary stop-trade order against Maines, Capital Markets Technologies (CMT) and another company of which Maines is also an officer.
The superintendent of securities listed several grounds for seeking the order, including an allegation Maines and the companies traded in securities without issuing receipts for a prospectus.
A prospectus is a document that provides details about an investment that will be for sale to the public. It discloses information necessary for investors to make an informed decision.
Recently, a settlement was reached between the CMT and Katherine Tummon, the superintendent of securities in P.E.I. As part of the settlement, CMT was ordered to pay a total of $15,000 in administrative penalties and investigative costs.
For his part, Maines agreed to drop an appeal he filed in court of Tummon’s ruling that he could not cross-examine witnesses at a securities hearing where concerns about his trading activities were to be heard.
A few hours after the settlement between Maines and the securities superintendent was signed, the Department of Environment and Justice issued a press release, highlighting the fact CMT was ordered to pay penalties.
Maines and the lawyer for CMT say they believe the release was “out of keeping with the spirit of compromise and good faith” that helped the parties reach a settlement.
“Please understand that the superintendent never indicated during the settlement negotiations that she was going to issue a press release, let alone within an hour of signing the consent order, nor did she allow us an opportunity to approve the substance of the release,” CMT’s lawyer Gary Jessop wrote in an email to one of the company’s investors.
Maines claims he spent months fighting rumours he swindled a woman who was dying of cancer of her life’s savings, among other innuendo that surfaced after government issued the first press release about him back in February. He believes his treatment by the Securities Commission was, from the beginning, an attempt to discredit him and his companies.
“The Securities Act is meant to be used as a shield for investors,” Maines said. “I fully believe with this whole process it was used as a sword against the company. I don’t see the relevance of how this helped any investor.”
Steven Dowling, counsel for the commission, said it is standard practice to issue press releases when an order is issued.
“I’m a little bit confused as to why they would take issue with the press release, this is something that is done as a normal course for security regulators across the country where there is a resolution of a matter such as this,” Dowling said.
He admitted this has rarely, if ever, happened in P.E.I., but said this is because issues of this nature do not often come up.
When asked why all affidavits and information filed with the Securities Commission regarding this case were not available for public viewing, as court documents are, Dowling said this too is ‘standard practice.’
“A standard provision in our Securities Act… mandates the confidentiality of the investigative process, it is not something that is directly comparable to a court process,” he said.
Dowling said he could not comment on the details of the investigation.
Maines says he plans to purse all legal options available in order to clear his name.
“I’m fully planning to find out who was at the root of this and hold them accountable.”
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