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by Mike Caswell

Imran Husain, the California man who admitted to running a seven-year shell factory scheme, has received a probationary sentence, avoiding jail entirely. Prosecutors did not request any prison time for Mr. Husain, citing his extensive co-operation with authorities. Much of that co-operation remains under seal, but it must have been of some substance, given the 18-month jail term that prosecutors would ordinarily have requested.

Mr. Husain's sentencing comes over three years after the U.S. Securities and Exchange Commission accused him of fraudulently creating nine public companies, including one with a Toronto address that purported to offer movie previews. The companies, which were ripe for use by market manipulators, each had fake business plans, allowing them to bypass the normal requirements for shells, the SEC said. The companies also had straw shareholders and puppet officers, according to the SEC. Mr. Husain and a co-accused sold the companies for hundreds of thousands of dollars each, generating $2.25-million in proceeds. (All figures are in U.S. dollars.)

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