A Canadian who was accused of facilitating an illicit offshore trading scheme involving microcap companies has settled with the U.S. Securities and Exchange Commission (SEC).
Back in 2020, the SEC filed a complaint against a pair of Canadians — Steve Bajic, a dual citizen of Canada and Croatia, and a Canadian who lived in Vietnam, Rajesh Taneja — in connection with an alleged scheme that used a network of offshore companies that they controlled to help corporate insiders conceal their secret selling of large quantities of stock.
In its complaint, the SEC alleged that Bajic and Taneja conspired with various others to enable the insiders of various public companies to fraudulently to sell their stock to retail investors on the U.S. securities markets.
The SEC alleged that they “used various offshore nominee companies to provide a layer of disguise to public company insiders or control persons, who intended to defraud investors by secretly dumping large quantities of stock … in circumvention of registration and disclosure requirements imposed by the federal securities laws.”
The coordinated dumping involved the securities of at least 45 public companies, which generated net trading proceeds of about US$42.7 million, the regulator said. A portion of the proceeds was allegedly paid to the co-conspirators for facilitating the illegal trades.
Now, the SEC has filed a proposed final judgment against Bajic, who consented to its entry, which would order him to pay US$837,734 in disgorgement and imposes a permanent injunction and a penny stock ban against him.
The SEC’s order said that the disgorgement order is deemed satisfied by a forfeiture order against Bajic in a parallel criminal case. In 2023, Bajic pleaded guilty to one count of conspiracy to commit securities fraud.
The regulator also ordered that a brokerage firm, Haywood Capital Markets, is required to pay the cash portion of Bajic’s RRSP and TFSA accounts to U.S. authorities to help satisfy the forfeiture order.
The SEC entered a judgment against Taneja in 2021.