TORONTO - The Ontario Securities Commission says a Toronto businessman charged last week with the fraudulent sale of hundreds of millions of dollars of securities to Chinese citizens has been arrested.

OSC manager of public affairs Kristen Rose says Xiao Hua Gong, also known as Edward Gong, was arrested Thursday night and released on bail on Friday morning. He is to make his first appearance in court on Jan. 31.

He was charged following an OSC investigation with fraud over $5,000, possession of property obtained by crime, laundering proceeds of crime and uttering a forged document. None of the allegations have been proven in court.

The OSC charges against Gong stem from the fraudulent sales of securities in two companies, O24 Pharma PLC and Canadian National TV Inc., from Jan. 1, 2012, to Dec. 20 of this year. It alleges both companies were controlled by Gong.

The OSC also alleges that a significant percentage of the money obtained by the scheme was directed to Gong's bank accounts in Canada which he then used for his benefit.

His arrest came one week after OSC staff, the RCMP and the Toronto police executed search warrants on Gong's residence and alleged place of business in North York.