The Ontario Securities Commission has order defunct financial firm Coventree to pay $1 million for misleading investors, and directed two founders to personally pay an additional $500,000 each.

Coventree was one of the largest players in asset-backed commercial paper (ABCP) a form of debt which unravelled in 2007 and some say was a warning sign of the broader credit crisis to come.

ABCP is a type of short-term debt that was backed by assets such as mortgages, car loans and credit card receivables.

The multibillion-dollar industry froze up as concerns over the amount of U.S. subprime mortgage debt mounted. Coventree is the only Canadian firm that's faced formal sanctions for its role in the ABCP affair, although several banks have made confidential settlements.

In September, an OSC tribunal found evidence of wrongdoing at Coventree, saying the company didn't do enough to disclose to clients the depths of the financial concerns before the market publicly froze up.

Specifically, the ruling punished the company for "failing to disclose a material change" to its business on several dates in 2007.

The commission was originally seeking a total of $16.5 million in fines and penalties. Wednesday's ruling was significantly less than that. An OSC release offered no explanation for the difference.

The ruling Wednesday ordered the company wind up its operations, pay an administrative penalty of $1 million and pay $250,000 to the OSC itself to cover the costs of investigating the matter.

Co-founders Geoffrey Cornish and Dean Tai were also fined $500,000 each and banned from being a director or officer from any companies under the OSC's purview.