OSC levels new allegations against Agoracom’s Kondakos

In an amended statement of allegations, the Ontario Securities Commission has added new allegations to its list of charges against Agoracom Investor Relations Corp. and its two founders, Apostolis (Paul) Kondakos and George Tsiolis.

In the new filings (available here: http://www.osc.gov.on.ca/en/Proceedings_soa_20101110_agoracom.htm), the OSC describes how Agoracom’s website for retail investors included a “private messaging” service which ostensibly allows users to have “direct and private contact with other Agoracom members.”

The OSC alleges that from July 2008 to February 2009, “Kondakos intercepted private messages sent between public users for the purpose of gathering information about reporting issuers and issuers, in which he was personally invested.”

Furthermore, the OSC alleges Kondakos “forwarded private messages to a personal friend who was not associated with Agoracom and provided this individual with administrative access to the Agoracom website. This individual also intercepted private messages between public users, and forwarded these private messages to Kondakos.”

The OSC filed its original charges against Agoracom in April, alleging Kondakos and Tsiolis instructed their employees to post thousands of anonymous, promotional comments about client firms to each firm’s discussion forum.

(See original story here: http://www.northernminer.com/issues/story.aspx?aid=1000367660 )

The OSC claimed Agoracom employees used 670 aliases to post 24,000 disguised messages on client and non-client hubs. from September 2006 to July 2009.

Agoracom representatives allegedly made up 40 to 50 aliases each, though some created as many as 200 fake identities, and were required to make a requisite number of posts to each hub each day or risk a dock to their pay.

The OSC also alleged that the posts made by Agoracom employees using aliases “were promotional and promoted purchasing and/or holding stock.” The OSC’s Statement of Allegations concluded Agoracom “knew or ought to have known that the posting activity described above put their clients at risk of being in breach of the TSXV Corporate Governance Policies governing investor relations firm activities and compensation.”

The OSC has reached a settlement with Agoracom, Kondakos and Tsiolis in the matter, and it will be considered by a commission panel at a hearing Friday in Toronto.