After having vowed to fight accusations he manipulated the share price of a medical device company, former Liberal MP Tony Ianno accepted a plea deal with the Ontario Securities Commission Friday.

In a hearing before OSC vice-chair James Turner, Ianno agreed to a five-year ban on trading securities, and agreed to pay the OSC $100,000.

“Mr. Ianno has admitted to what we view as serious misconduct and has agreed to serious consequences,” OSC lawyer Alexandra Clark told Turner.

“I think the sanctions are within a reasonable range,” Turner said.

Ianno was the MP for the downtown Toronto riding of Trinity-Spadina from 1993 until 2006, when he lost to the NDP’s Olivia Chow.

Ianno’s lawyer Jay Naster told the hearing that his client had lost roughly $5 million from his investments in Covalon Technologies Ltd., which trades on the TSX Venture Exchange.

Naster said Ianno wasn’t aware what he had been doing was against the rules.

“There is absolutely no indication of dishonesty. He acknowledges the effect of the conduct,” Naster told Turner. “While Mr. Ianno now understands that the trades at issue were contrary to the public interest, at the time of engaging in the trades, Mr. Ianno had so such knowledge.”

Naster also argued in a submission to Turner that Ianno should have been warned by brokers that the trades weren’t permitted.

“All of the trading was done through . . . registrants (brokers) who took Mr. Ianno’s instructions, and executed the trades, and ultimately received commission for those trades; none of these registrants ever refused to execute the trade,” Naster said, suggesting that Ianno was actually a victim in the case.

“Mr. Ianno is . . . among the members of the investing public who the registrants are intended to protect. Unfortunately Mr. Ianno did not receive the benefit of that protection in this matter,” Naster argued in his submission.

Ianno at one point owned up to 4 million shares of Covalon, the majority of them purchased on margin (credit) funded by brokerages, using the shares themselves as collateral. He had also encouraged four other people to open accounts at BMO Investorline and buy Covalon shares with the accounts.

Ianno had purchased 1.89 million shares at an average price of $1.53 per share; between June 2007 and April 2008, he bought a further 1.97 million at an average price of $2.80 per share. The thinly-traded stock is now worth 18 cents per share.

In an attempt to avoid margin calls (requiring him to repay the brokerages), Ianno had made several further small purchases late in the day, which boosted the share’s closing price. To keep shares eligible to be used as collateral, they must maintain a minimum price.

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While the original accusations by the OSC last year said Ianno had been facing 27 margin calls, Friday’s settlement only mentioned one. That, said Naster in an e-mailed statement, is evidence Ianno did fight the accusations, despite settling.

“The statement of allegations . . . contained just that, allegations. Mr. Ianno was adamant at that time that he would vigorously defend against those allegations. That is precisely what he did,” Naster said.