One of two men who masterminded a market manipulation scheme at Alberta-based Kilimanjaro Capital Ltd. has been ordered to pay a $450,000 penalty, disgorgement of more than $117,000 and costs of $120,000. 

The Alberta Securities Commission (ASC) said Ashmit Patel engaged in various acts relating to Kilimanjaro shares that contributed to an artificial price for those shares. Another man, Zulfikar Rashid, was also involved. 

The ASC ordered Patel to pay the fines and resign all positions he holds as a director or officer of any issuer or registrant and that he is subject to an array of permanent market bans. 

Pair implemented manipulation scheme 

In making its decision, the ASC said Patel implemented a market manipulation scheme in which shares in Kilimanjaro (now known as N1 Technologies Inc.) were promoted through a combination of misleading news releases and an online tout campaign, which was designed to inflate the share price and provide an opportunity to sell shares into an unsuspecting market. 

The pair’s manipulation scheme was carried out over a period of several months, during which Patel covertly exerted control over virtually all aspects of a pump and dump scheme while using Rashid as his nominee. The ASC panel also found that Patel and Kilimanjaro violated a cease-trade order and that Rashid made untrue statements to ASC investigators. 

Misconduct deemed “egregious” 

In its decision, the panel noted that Patel's misconduct “was an egregious breach of Alberta securities laws, done with planning and deliberation, and caused significant harm to investors and undermined confidence in the capital market." It went on to say that Patel "cannot be trusted to again participate in the capital market." 

Rashid was told to pay an administrative penalty of $75,000 and costs of $30,000, that he resign all positions he holds as a director or officer of any issuer or registrant, prohibited from becoming or acting as a director or officer (or both) of any issuer or registrant for a period of 10 years, and that he is subject to an array of other market bans for a period of eight years. In addition, Rashid was told to cease all trading in or purchasing securities or derivatives of Kilimanjaro and that Kilimanjaro cease trading in or purchasing securities.