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by Mike Caswell

The Alberta Securities Commission has imposed a permanent ban and $750,000 in financial penalties on Joseph Kostelecky, one of those cited for the collapse of former Toronto Stock Exchange listing Poseidon Concepts Corp. The regulator says that his actions are among the most serious kind of misconduct to come before it. He was the "architect of the deception" that caused Poseidon to overstate its revenues by over $100-million.

The penalties are contained in a decision that the ASC released on Thursday, June 8. Mr. Kostelecky's fine includes a $650,000 administrative penalty and the payment of $100,000 in hearing costs. The ASC has also permanently banned him from acting as an officer or director of any issuer.

The sanctions follow his role at Poseidon Concepts, a Calgary oil services company that collapsed amidst a massive problem with its accounts receivable. The company reported on Feb. 14, 2013, that between $95-million and $106-million of its revenue for the first nine months of 2012 was incorrect. The resulting restatement wiped out most of the company's $148-million in revenue for the period. The stock, which had traded as high as $16.90 in 2012, hit 27 cents that month. Two months later the company delisted from the TSX, and it is now defunct.

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