Following an internal investigation into USI-Tech, on February 23rd Quebec’s Autorité des marchés financiers (AMF) filed for a securities fraud cease and desist.

The cease and desist named USI-Tech and promoters Cris Vegas and Johanne Brunelle as respondents.

Facebook, LinkedIn, Meetup, Steemit, Evensi and Mazarine Trade Inc. were listed as additional parties involved.

The AMF alleges USI-Tech, Cris Vegas and Johanne Brunelle have violated the Securities Act.

The February 23rd motion for a cease and desist was filed as an emergency motion “in order … to protect the investing public”.

On February 23rd Vegas and Brunelle were notified of the cease and desist through their various social media profiles.

USI-Tech was was emailed both on February 23rd and again on February 28th.

To date the company has not publicly acknowledged being contacted by the AMF.

On March 2nd a hearing was held before the Administrative Tribunal for Financial Markets to decide the AMF’s motion.

Counsel for the AMF argued that there are pressing grounds for prompt intervention by the Tribunal.

In this regard, she emphasized that the respondents are currently seeking investors illegally in Quebec through presentations, websites and various social media, thereby violating the Securities Act.

In addition, she indicated that the Authority’s investigation – which continues – revealed that several investors in Quebec have already invested significant sums in the forms of investment that were illegally proposed to them by the respondents.

She argued that these forms of investment, essentially investment contracts related to cryptocurrencies, are subject to the provisions of the Securities Act and that, therefore, the above-mentioned solicitation and investments of the Respondents constitute serious breaches of Articles 11 and 148 of that Law.

Although notified of the hearing well in advance, neither USI-Tech, Vegas or Brunelle responded or made an appearance.

Based on evidence presented by the AMF, the Tribunal ruled USI-Tech’s BTC Packages and upcoming Tech Coin ICO were ‘investment contracts subject to the provisions of the Securities Act‘.

Neither USI-Tech, Cris Vegas or Johanne Brunelle are registered with the AMF to offer securities in Quebec.

Moreover, the evidence shows that the respondents currently continue their illegal solicitation and investment activities and have succeeded in illegally collecting large sums of money from the investing public of Quebec.

Again, based on evidence submitted by the AMF, the Tribunal ruled USI-Tech, Vegas and Brunelle had violated the Securities Act.

These breaches are serious and contrary to the public interest, in particular because they are related to the heart of the registration and financial reporting regimes provided for by the Securities Act, and whose purpose is to protect the investing public and ensure the integrity of the financial center.

Subsequently the Tribunal prohibited USI-Tech, Cris Vegas and Johanne Brunelle from committing any further violations of the Securities Act.

With respect to USI-Tech as a business, this effectively makes USI-Tech’s BTC Package and Tech Coin ICO illegal across Quebec (both selling and promotion of).

USI-Tech was also ordered to redirect visitors to their website from Quebec to the Tribunal’s decision.

The Tribunal’s order acknowledges the AMF’s investigation into USI-Tech is ongoing.

On March 16th the Tribunal’s order appears to have been made final, with the AMF going public with the decision on March 27th.

For their part USI-Tech announced it was abandoning business operations in Canada back in January.

Investor losses in Quebec as a result of USI-Tech collapsing are at this point unknown.