OSC hits Agoracom's Tsiolis and Kondakos with 10-year ban, $150,000 fine

Settlement follows probe into alleged on-line posting activity by Agoracom and its management

The Ontario Securities Commission has announced a settlement deal with Agoracom Investor Relations Corp., one that resulted in a $150,000 fine and sanctions against the company’s vice-president of operations Apostolis (Paul) Kondakos and founder George Tsiolis.

The settlement, announced on Friday, comes after the OSC unveiled a revised statement of allegations against Agoracom, Kondakos and Tsiolis.

Agoracom is a Toronto-based service that caters to the investor relations and marketing needs of small and micro cap public companies, through online content, including webcasts, podcasts and blogs.

It features an online discussion forum that is available on a specific companies’ hub and allows for discussion about the companies securities.

Friday’s settlement has been reached more than a year after the OSC alleged that much of the talk on the discussion forum was actually generated by Agoracom employees, who used fake names in discussions about the companies’ shares.

The OSC alleged that Agoracom representatives had between 40-50 aliases (some had up to 200) and were required to make up to two posts per hub per day or risk having their pay docked.

On occasion, Agoracom staff conversed with themselves on the forums using different aliases, according to the settlement.

But neither the public users nor the majority of Agoracom’s clients knew that representatives of Agoracom were posting on their hubs, using aliases.

The posting activity described above and mandated by Kondakos and Tsiolis was undertaken, in part, to create an appearance of greater interest in the securities of some of Agoracom’s clients.

Under the November 10 settlement agreement:

Tsiolis and Kondakos (the respondents) are suspended and prohibited from becoming or acting as a registrant or as an investment fund manager for a period of 10 years.

The respondents are permanently prohibited from becoming or acting as a director or officer of any client of Agoracom or any client of Agoracom’s affiliates or subsidiaries;

The respondents will not trade or invest in any client of Agoracom or any client of Agoracom’s affiliates or subsidiaries, save and except for options or placements that are part of a contractual compensation arrangement.

The respondents will pay $125,000 for the benefit of third parties and $25,000 to cover the cost of the Commission’s investigation.

OSC staff allege that the respondents’ course of conduct spanned from September 1, 2006 to July 31, 2009.

During the material time:

• More than 24,000 alias posts were created from within Agoracom on client and non-client hubs;
• More than 670 alias user names were created by representatives of Agoracom and used on client and non-client hubs;
• Alias posts originated from Tsiolis’ residence; and
• Posts by Agoracom representatives, using their aliases, were occasionally promotional and promoted purchasing and/or holding stock.

According to the OSC, Agoracom offers pricing models for its clients incorporating a monthly fee and stock options equaling the greater of 250,000 shares or 0.5% of a company’s fully-diluted outstanding share total at current prices.