Drabinsky Hit With Markets Ban 16 Years After Case Began

(Bloomberg) -- Garth Drabinsky has been banned from capital markets some 16 years after a Canadian regulator first began its probe of the former theater executive who was convicted of carrying out one of the biggest frauds in Canadian history.

Drabinsky was barred from serving as a director or officer of a publicly traded company, and prohibited from trading securities except in his own personal account or registered pension plan, the Ontario Securities Commission said in a statement Friday.

“Mr. Drabinsky was responsible for one of the most significant Canadian financial frauds in recent decades,” the commission wrote.

The ruling brings to an end a process that began in 2001 when the regulator first made allegations against Drabinsky, co-founder of production company Livent Inc. The regulator’s case was pre-empted by criminal proceedings, in which Drabinsky was eventually sentenced to five years imprisonment. He completed his sentence in September.

“It is not in the public interest to allow Mr. Drabinsky’s participation in Ontario’s capital markets as he was a senior director and officer of a public company who abused his positions of trust by carrying out a large-scale fraud,” the Toronto-based commission wrote.

Drabinsky and partners founded Livent in 1990, expanding it into North America’s biggest theatrical producer, with shows including “Ragtime,” “Fosse” and “The Phantom of the Opera.”

Drabinsky, onetime chief executive officer, was charged in 2002 with lying about company finances for nine years after the firm raised about C$500 million ($378 million) in public markets to buy theaters and put on shows.

Drabinksy’s lawyer, Richard Shekter, said it’s too early to say if there will be an appeal of the decision. He said the OSC rejection of a request for an exemption allowing Drabinsky to act as a director of family-owned companies was “a major disappointment.”

Still, the ruling won’t prohibit Drabinsky from staying active with Teatro LP, a theatre company, he said.

“He wants to continue to be involved in theatrical productions and this allows him to do that,” Shekter said.

To contact the reporter on this story: David Scanlan in Toronto at dscanlan@bloomberg.net.

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Carlos Caminada, Steven Frank