Yan Zhu, also known as Rachel Zhu, and Guan Qiang Zhang, have also been permanently banned from public markets as a result of the offences, which also included illegally distributing securities, withholding information from regulators and instructing their employees and investors to do the same.
In its decision announced Monday, the British Columbia Securities Commission also fined and permanently cease-traded Bossteam E-Commerce, the company co-founded by Zhu and Zhang.
Bossteam described itself on its websites, in documents and in presentations as an online advertising business. A primary part of the business was its website with platforms, including one where advertisers could post links to their own web pages as advertising to be viewed by others.
The securities commission panel said that Zhu, Zhang and Bossteam committed fraud when they created the false impression among investors in Bossteam that well-known local and international businesses were paying Bossteam to advertise on its websites.
"This was untrue, as the majority of ads appearing on Bossteam's websites were associated with Bossteam's own accounts and not to accounts for parties that had paid Bossteam to post their links," the panel said in a statement.
"Their activities were at the most serious end of the range of misconduct under the act, caused serious harm to investors and damaged the integrity of our capital markets."
Zhu and Zhang were each ordered to pay a $14 million administrative penalty for a total of $28 million, and to disgorge to the commission an additional $14 million "obtained as a result of their misconduct."
"At this time, we are not aware of where the respondents are residing," Richard Gilhooley, a spokesman for the BCSC, said Monday in an email.
"In this case, we have frozen a significant amount," Gilhooley said, adding that whether the funds would be used for fines or disgorgement depends on the results of an appeal currently before the BC Court of Appeal.
With limited exceptions, Zhu and Zhang have also been permanently banned from trading in securities, purchasing securities or exchange contracts and from becoming or acting as a director or officer of any issuer or registrant.
They are also permanently prohibited from becoming or acting as a registrant or promoter, from engaging in investor relations activities and from acting in a management or consultative capacity in connection with the securities market.