Julie Winget, the common-law spouse of Arvind Sanmugam and lead director of investment firm Bunting & Waddington, is also barred from being a director of any investment fund manager for seven years.
The firm is permanently prohibited from trading or acquiring any securities, according to terms of the settlement announced Wednesday, which is still subject to a public hearing.
The OSC said the firm and Winget contravened Ontario securities law by trading without being registered.
Sanmugam was sentenced to five years in prison last November and ordered to pay $1 million in restitution after pleading guilty to three counts of fraud. He was described by the settlement as the "directing mind" and de facto director of the Toronto-area firm.
Investors were promised eight per cent monthly returns on $100,000 investments in exchange for a $3,500 monthly retainer.
The securities regulator said Sanmugam misrepresented himself as a successful trader, when in fact, he had lost more than $3.6 million of investors' funds between February 2006 and June 2010 alone.
Winget, who incorporated the company in 2001, transferred more than $500,000 into her personal bank account from Bunting & Waddington. In addition to repayment of the amount, she was ordered to pay a $50,000 administrative penalty and $25,000 in investigation costs to the securities commission.
Her prohibition period will also be extended beyond seven years if all monies owed are not paid in full.