The Ontario Securities Commission (OSC) has permanently banned the woman behind a large real estate investment scheme that illegally distributed securities and misled investors — but it didn’t pursue any monetary sanctions in the case, given that she’s already bankrupt and embroiled in litigation from investors.
Ontario’s Capital Markets Tribunal approved a proposed settlement between the OSC and Claire Drage, who admitted to violating securities rules through two now-bankrupt companies that she controlled, when selling promissory notes to investors to finance real estate developments.
According to the settlement, between 2021 and 2024, Drage and her companies — Lion’s Share Group Inc. and Windrose Group Inc. — raised $285.8 million from investors, without disclosing significant liquidity and leverage issues at some of their borrowers.
Those promissory notes were securities, and their sales didn’t comply with registration or prospectus requirements, the OSC said. And, it alleged that misleading investors amounted to perpetrating a fraud on investors.
“In particular, Drage and Lion’s Share falsely portrayed the borrowers of the promissory notes as financially successful, not overleveraged and likely to repay their debts,” the settlement said. “Contrary to these representations, by no later than 2021, Drage and Lion’s Share were aware of severe liquidity issues that they and the other borrowers were facing.”
In addition, “by the time Drage, Lion’s Share Group and Windrose Group were declared bankrupt in 2024, nearly $90 million remained owing to nearly 450 investors,” the settlement noted.
In settling the regulator’s allegations, Drage agreed to be permanently banned from the capital markets.
However, the OSC didn’t pursue any financial sanctions, in the case, given her financial circumstances.
In the settlement, the regulator noted that Drage remains undischarged from bankruptcy, that she has sold her house and liquidated her RRSP, and turned over the proceeds to the receiver, which is charged with recovering assets for her primary creditor — the investors that lost money in the scheme.
“But for the appointments of the receiver/trustees in bankruptcy, who have overseen the disposition of all available assets and collection of all available Drage surplus income, the commission would be seeking significant monetary sanctions, including costs and disgorgement, as against Drage,” the settlement said.
In addition to turning over her assets to the receiver, the settlement said that she’s working three part-time jobs, and making required payments from her earnings to the bankruptcy trustee. And, it noted that Drage is also a defendant in several civil proceedings being brought by at least 179 investors.
The settlement also said that Drage is remorseful, and cooperated with the OSC’s investigation.