Talk about a double standard and invasion of privacy. These guys are no different than those other guys.

OSC's Agoracom targets to pay $150,000

Ontario Securities Commission (C:*OSC)
Monday November 15 2010 - Street Wire

by Mike Caswell

The Ontario Securities Commission has secured $150,000 in penalties against Agoracom Investor Relations Corp. and two of its directors, George Tsiolis and Apostolis Kondakos, and has terminated the limited dealer registration of Agoracom Capital Inc. The penalties are part of a negotiated settlement announced Friday, in which the men admitted that they had Agoracom employees create over 24,000 forum posts about client companies. Mr. Kondakos also admitted to snooping through private messages sent by users of Agoracom's forums.

The settlement comes seven months after the OSC initially filed a statement of allegations against Mr. Kondakos, Mr. Tsiolis and Agoracom Investor Relations. The regulator claimed that the men had Agoracom employees creating the forum posts over nearly three years, starting on Sept. 1, 2006. Neither the public nor Agoracom's clients were aware that Agoracom employees were writing the posts.

OSC's statement of allegations

The five-page statement of allegations identified Agoracom as a company that "caters to the IR and marketing needs of small and micro cap public companies." The OSC listed its founder as Mr. Tsiolis, who lives in Toronto, and one of its directors as Mr. Kondakos, who also lives in Toronto.

As with most IR firms, Agoracom performed investor relations work in return for a monthly fee, plus stock options. Agoracom would usually ask for an option to buy 250,000 shares, or 0.5 per cent of a company's float, whichever was greater. In return, clients would receive a "hub" on Agoracom's website, which would include a discussion forum moderated by Agoracom employees.

According to the OSC, Mr. Tsiolis and Mr. Kondakos required employees to author large numbers of anonymous posts in those forums using aliases. Agoracom employees created fictitious user names and posed as investors, blending in with other users. "Representatives had between 40-50 aliases (some had up to 200) and were required to make a requisite number of posts per hub per day or risk having their pay docked. On occasion, Agoracom staff conversed with themselves on the forums using different aliases," the statement of allegations read. In all, there were more than 24,000 alias posts created from within Agoracom.

The OSC said the extra posts helped bolster monthly reports that Agoracom made to clients. Agoracom routinely reported traffic and activity to its customers, including the number of forum posts. For some clients, posts authored by Agoracom employees represented a significant portion of the total posts, according to the statement of allegations.

The first public hint that there was a problem appeared in March, 2009, when a company employee, Scott Purkis, revealed that he had created posts in the forums using an alias. Mr. Tsiolis and Mr. Kondakos responded by issuing an "official statement" in which they said that Mr. Purkis was the only employee making such posts, and that Agoracom would ensure that there would be no similar problems in the future. The OSC said that the message "was false and misleading given that Tsiolis and Kondakos knew and instructed many representatives to create and use multiple aliases to post on all of the client forums."

(In a separate settlement reached in August, 2010, Mr. Purkis agreed to pay $23,862 and to serve a seven-year officer and director ban. He also agreed to testify in any proceedings against Agoracom.)

Settlement

On Friday, Nov. 12, the OSC announced that it had reached a settlement with Agoracom and its two directors. In settling the case, Mr. Tsiolis and Mr. Kondakos admitted to the information contained in the statement of allegations and agreed to fines and bans. Mr. Kondakos also admitted that he intercepted private messages sent between members of Agoracom's forums. He used the messages to gather information about companies that he had personally invested in, and forwarded them to a friend who was not associated with Agoracom.

The terms of the settlement call for the two men and Agoracom to jointly pay a $125,000 fine, plus $25,000 for the costs of the OSC investigation. The OSC will also terminate the registration of Agoracom Capital, a limited market dealer that operates as a subsidiary of Agoracom Investor Relations. Other sanctions include a five-year officer and director ban for Mr. Tsiolis and Mr. Kondakos and a 10-year suspension preventing the two men from acting as an investment fund manager or a registrant. Mr. Tsiolis and Mr. Kondakos also must not trade shares in any Agoracom client companies. The final term calls for Agoracom to make a copy of the settlement available on its website for six months.

� 2010 Canjex Publishing Ltd.