Garth Drabinsky banned from becoming director or officer of public company: OSC
Theatre producer Garth Drabinsky is pictured in the rehearsal studio at Elgin Theatre as he prepares for the debut of his new production "Sousatzka", in Toronto on Thursday, January 12, 2017. THE CANADIAN PRESS/Chris Young
Alexandra Posadzki, The Canadian Press
Published Friday, June 16, 2017 3:17PM EDT
Last Updated Friday, June 16, 2017 5:07PM EDT
TORONTO -- Ontario's securities watchdog has permanently banned Garth Drabinsky from becoming a director or officer of any company, bringing to a close a 16-year-old case against the former theatre impressario.
Drabinsky, who defrauded investors of an estimated $500 million, is also prohibited from acting as or becoming a registrant in the province, the Ontario Securities Commission said Friday.
The OSC case against Drabinsky was first launched in 2001, but was put on hold until the conclusion of his criminal case for his role in the Livent Entertainment scandal.
Drabinsky was found guilty of two counts of fraud and sentenced to a five-year prison term back in 2009 for manipulating company financial statements and orchestrating a kickback scheme. He appealed the convictions all the way up to the Supreme Court of Canada, which dismissed the application.
Two other executives, Gordon Eckstein and Myron Gottlieb, were also found guilty of fraud in the Livent scandal and later banned from serving as a director or officer of a public company under settlements reached with the OSC.
Drabinsky is also prohibited from buying or trading securities but with several exceptions, including if the trading takes place in an RRSP or through a registered dealer in accounts opened in his name only.
In its decision released Friday, the OSC said it imposed only limited trading bans because it does not feel that prohibiting Drabinsky from making routine personal investments is necessary to protect the public.
Drabinsky's lawyer, Richard Shekter, had said his client had offered to settle the case but was turned down because the OSC didn't agree that he should be permitted to set up an RRSP or a family company that he can use to minimize personal taxes and assist with estate planning.
During hearings, staff for the OSC had argued that the restrictions are needed in order to deter Drabinsky and others involved in the public markets from committing financial fraud and send a strong message that abusing public trust will lead to both criminal and regulatory consequences.
Drabinsky's counsel had argued that he has unique and valuable talents as a creative producer that the entertainment industry can benefit from. Drabinsky cannot function as a creative producer -- his only means of making a living -- if he cannot interact with investors, his lawyers said.
At its height, Livent produced shows including "The Phantom of the Opera" and "Ragtime" across North America, the United Kingdom and Australia. The company sought bankruptcy protection in 1998 and was sold off three years later.