PyroGenesis Sees AMF Launch Proceedings Against Company, CEO, Director

The securities regulator in Quebec, Autorité des marchés financiers (AMF), has elected to take regulator action against that of PyroGenesis Canada (TSX: PYR), along with CEO Peter Pascali and director Alan Curleigh. The actions relate to dealings with Phoenix Haute Technology, a company that was controlled by the late father of Pascali, from which certain IP was acquired in 2011.

The AMF has elected to take action in relation to a settlement agreement entered into in 2018 between Phoenix and PyroGenesis, which saw a $5.5 million claim related to the purchase of IP rights in 2011 settled via the issuance of $3.7 million in units of the company.

The charges by the AMF include a breach of section 199.1(2) of the Securities Act (Quebec), by Pascali, which alleges that Pascali perpetrated a fraud. The AMF also alleges a breach of sections 196 and 197 by both Pascali and the company, which relates to alleged misrepresentations in the filing of a prospectus or transacting in a security.

Allegations also include that Pascali and the company failed to comply with disclosure obligations under securities legislation, and that Pascali and Curleigh failed to comply with fiduciary duties as directors of the company.

In total, the regulator is seeking to impose $4.2 million in administrative penalties against Pascali along with a disgorgement order of $9.57 million. Against the company, the AMF is seeking penalties of $550,000. Finally, the AMF is looking to prohibit Pascali and Curleigh from acting as an officer or director for a reporting issuer for a period of five years.

READ: PyroGenesis Blames Declining Revenue On Slow “Technology Adoption”

“It is disappointing that after several years of an extensive investigation by the AMF and cooperation by PyroGenesis, the AMF felt that these proceedings were warranted. The Company will welcome its day in court where we are confident the truth will prevail and the motives behind those who supported this outcome will be exposed,” commented Pascali.

The company has stated that “management expects to be less distracted by these proceedings compared to the investigation process over the past several years,” and that it is committed to continue to operate PyroGenesis in the ordinary course. All three parties meanwhile denied the allegations, saying they are without merit and that they will vigorously defend themselves.

PyroGenesis last traded at $0.89 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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