Alan J. Lenczner

The applicant, a minority shareholder of a holding company that previously owned an investment dealer, sought a hearing and review of IIROC's approval of a recapitalization transaction that diluted the holding company's interest.

The respondents brought motions to dismiss the application.

The Commission granted the motions to dismiss, finding that the applicant was not 'directly affected' by the regulatory decision, the application was filed well beyond the 30-day statutory time limit, and the relief sought was a private commercial dispute properly belonging before the courts, where the applicant's civil claims had already been dismissed as statute-barred.

Multiple groups of investors and the respondents brought motions before the Ontario Securities Commission seeking to revoke Freeze Directions, allocate disgorged funds to specific investors, and facilitate the sale of frozen real property.

The respondents also sought to vary the disgorgement amount or set aside the previously approved settlement agreement.

The Commission dismissed the motions, holding that it lacks adjudicative jurisdiction to order restitution to individual investors or to vary an approved settlement agreement.

The Commission noted that the allocation of disgorged funds is an administrative function and directed Staff to apply to the Superior Court of Justice for directions on distributing the frozen funds and facilitating the sale of the real estate.

The Ontario Securities Commission alleged that the respondents engaged in unregistered trading and illegal distribution of securities without a prospectus in relation to the sale of preference shares to 11 Chinese investors seeking to immigrate under Ontario's Provincial Nominee Program.

The Commission dismissed the allegations, finding that the respondents were pursuing legitimate business interests in developing a solar energy business, and their fundraising activities were not mainly the sale of securities.

Furthermore, the Commission held that the prospectus requirements did not apply to the distribution outside Ontario absent fraudulent conduct, and that the sales fell under the private issuer exemption.

Following a merits hearing where the respondents were found to have engaged in unregistered trading, illegal distribution of securities, and fraud, the Ontario Securities Commission held a sanctions and costs hearing in writing.

The Commission ordered permanent market bans against the principal respondent and his company, and multi-year bans against the other respondents.

The respondents were ordered to disgorge a total of $905,591, pay administrative penalties totaling $375,000, and pay costs of $288,496.25.

Staff of the Ontario Securities Commission alleged that the respondents engaged in a fraudulent forex trading scheme, unregistered trading, and illegal distribution of securities.

The respondents raised over $1.2 million from investors through promissory notes, promising high returns from forex trading, but used the funds for personal expenses and to pay earlier investors in a Ponzi-like manner.

The Commission found that the promissory notes were investment contracts and therefore securities.

The Commission concluded that Todorov perpetrated fraud, and that Todorov, Banik, Guerenska, and Setenterprice engaged in unregistered trading and illegal distribution.

Furthermore, Todorov and Nikolov, as de facto and actual directors of Setenterprice, were deemed responsible for the company's breaches of the Securities Act.

The applicants moved the Ontario Securities Commission for an order requiring Enforcement Staff to disclose information and materials obtained through investigative powers subsequent to a sanctions order.

The applicants argued that Stinchcombe disclosure obligations applied as the proceeding was ongoing.

The Commission dismissed the application, finding it had no statutory authority to make the order sought because the proceeding before the Commission had been completed and it had no further jurisdiction under section 127 of the Securities Act.

The Ontario Securities Commission issued its decision on sanctions and costs following a merits decision that found the respondents contravened the Securities Act by engaging in insider trading and tipping.

The respondents included a mergers and acquisitions lawyer who instigated the tipping scheme and several investment advisors who traded on and further disseminated the material non-public information.

The Commission imposed 10-year trading bans, permanent or 10-year director and officer bans, and 10-year registration bans for the investment advisors.

The Commission also ordered disgorgement of profits totaling $84,698, administrative penalties totaling $2,150,000, and costs of $500,000 apportioned among the respondents based on their respective culpability and involvement in the proceedings.

Following a merits decision finding the respondents engaged in unregistered trading, illegal distribution, and fraudulent practices, the Ontario Securities Commission held a hearing in writing to determine sanctions and costs.

The respondents, who misappropriated substantial funds from investors, did not participate.

The Commission ordered permanent market bans against the respondents, an administrative penalty of $300,000, disgorgement of CAD $1,543,924 and USD $311,667, and costs of $233,013.75.

The Ontario Securities Commission held a hearing in writing to consider allegations against Peter Balazs and several corporate entities he controlled.

The respondents solicited over $2.6 million CAD and $900,000 USD from investors for foreign currency exchange trading.

The Commission found that the respondents engaged in unregistered trading and illegal distribution of securities.

Furthermore, the Commission concluded that the respondents perpetrated a fraud on investors by misrepresenting the profitability of the trading, using investor funds for personal expenses, and paying existing investors with new investor funds.

Balazs was found liable as a director and officer for authorizing and acquiescing in the corporate respondents' breaches of the Securities Act.

A sanctions hearing was ordered to follow.

The respondents Miller, Azeff, and Bobrow brought non-suit motions to dismiss certain allegations of insider trading and tipping at the close of Staff's case.

The Commission dismissed Miller's motions regarding Masonite and Dynatec, but granted his motion to strike an allegation regarding Dynatec as barred by the six-year limitation period.

Bobrow's motion regarding MDSI was granted as Staff failed to make out a prima facie case.

Azeff's motions regarding Dynatec and MDSI were dismissed, as Staff's evidence gave rise to reasonable inferences supporting the allegations.

The Ontario Securities Commission held a sanctions hearing for a respondent who admitted to trading without registration and illegal distribution of securities in relation to a Ponzi scheme.

While Staff sought a disgorgement order of $207,641 and an administrative penalty of $50,000, the Commission declined to impose monetary sanctions.

The Commission found that the respondent was unaware the investment was a Ponzi scheme, was genuinely remorseful, and had no ability to pay due to her age and financial circumstances.

Non-monetary sanctions, including a 15-year trading ban, were imposed.

The respondents brought a motion to revoke or vary an investigative order issued under section 11 of the Securities Act.

The respondents argued that the Commission lacked jurisdiction to issue the order because its purpose was to enforce a sanctions order, which they claimed was not part of the due administration of Ontario securities law.

The Commission dismissed the motion, finding that the enforcement of sanctions is an essential object of the Act and that Staff may use investigative orders to gather information about potential asset transfers intended to negate sanctions.

The moving parties sought an adjournment of a scheduled merits hearing regarding insider trading and tipping allegations, arguing that their expert consultant had lost approximately 600 hours of work product.

Staff opposed the adjournment and brought a cross-motion to sever the matter against one respondent if the adjournment was granted.

The Commission dismissed the adjournment motion, finding that the expert consultant was sufficiently prepared to assist counsel with cross-examinations and that the matter, which had been outstanding for four years, needed to proceed in a timely manner.

The cross-motion for severance was also dismissed.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondent pursuant to subsection 127(10) of the Securities Act, based on a prior order of the Alberta Securities Commission.

The respondent did not appear or file materials in the written hearing.

The Commission found it in the public interest to issue a reciprocal order, prohibiting the respondent from trading in or acquiring any securities until June 6, 2023.

The Ontario Securities Commission held a sanctions and costs hearing following a merits decision that found the respondents engaged in unregistered trading and illegal distribution of securities related to land and solar panel agreements.

The Commission imposed market participation bans of 10 years for the corporate respondents and their directing mind, Chaddock, and 5 years for the subordinate sales employees, Baum and Strumos.

The Commission ordered significant administrative penalties and disgorgement, finding that the respondents obtained over $3 million from investors through their non-compliance with Ontario securities law.

Costs were also awarded against the respondents.

Staff of the Ontario Securities Commission brought proceedings against the respondents for operating fraudulent advance-fee schemes.

The respondents solicited investors to pay upfront fees for the purported exchange or sale of virtually worthless shares, but the transactions never occurred and investors suffered complete losses.

The Commission found that the respondents engaged in the business of trading in securities without registration, contrary to s. 25(1) of the Securities Act, and perpetrated a fraud on investors, contrary to s. 126.1(b).

The Commission ordered permanent trading and acquisition bans against the corporate respondents and ordered disgorgement of the funds obtained through the fraudulent schemes.

The Ontario Securities Commission held a sanctions hearing regarding Michael Chomica following his guilty plea and criminal conviction for fraud under the Securities Act.

Chomica and Commission Staff submitted an Agreed Statement of Facts and a Joint Submission on Sanctions.

The Commission found that Chomica's fraudulent misconduct required strong sanctions.

The Commission ordered permanent trading, acquisition, and exemption bans, permanent director and officer bans, a permanent ban from acting as a registrant, and a $550,000 disgorgement order.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and illegal distribution of securities through the sale of Land Agreements and Solar Panel Agreements.

The respondents argued they were selling tangible goods and real estate, not securities.

The Commission applied the Pacific Coast Coin test and found that both types of agreements constituted investment contracts, as investors provided money with the expectation of profit from a common enterprise managed by the respondents.

The Commission concluded the respondents breached sections 25 and 53 of the Securities Act, but dismissed the allegation of prohibited representations under section 44(2).

Enforcement Staff of the Ontario Securities Commission brought a motion to waive service of a Notice of Hearing and Statement of Allegations on the respondents.

The Commission found that Staff had taken all reasonable steps to locate and serve the individual respondent, who was actively avoiding service, and granted the waiver of service against him.

However, the Commission declined to waive service on the corporate respondent because Staff provided no evidence of attempts to serve the corporation or its officers.