Cathy Singer

Staff of the Ontario Securities Commission brought a motion to adjourn the merits hearing because its lead counsel left the Commission and newly retained external counsel was unavailable for the first five scheduled dates.

The Tribunal dismissed the motion, finding that Staff failed to establish exceptional circumstances under Rule 29(1) of the Rules of Procedure.

Staff did not provide evidence of any steps taken to avoid an adjournment, such as considering internal counsel or searching for other available external counsel.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading, illegal distribution of securities, and made false or misleading statements in connection with raising funds for a hotel redevelopment project.

The Capital Markets Tribunal found that the respondents distributed securities without a prospectus and breached a temporary cease trade order.

However, the Tribunal dismissed the allegations of unregistered trading, finding that the capital raising was ancillary to the underlying hotel business, and dismissed the allegations of false statements because no trading relationship existed.

The Tribunal also found the respondents engaged its public interest jurisdiction by failing to segregate funds and maintain accurate records.

Following a merits decision finding the respondents perpetrated securities fraud, engaged in unregistered trading, and distributed securities without a prospectus, the Capital Markets Tribunal determined the appropriate sanctions and costs.

The Tribunal ordered disgorgement of $43.61 million against the primary individual respondents, with a reduced amount of $13 million for a less culpable respondent.

Administrative penalties totaling $3 million were imposed, along with permanent market participation bans for most respondents and a costs award of $600,000 to the Commission.

The respondents raised $10 million from investors through secured debentures, representing that the funds would be used exclusively to finance a specific real estate project (Bayview Creek).

Instead, the respondents diverted approximately $3.39 million of the proceeds back to the corporate respondent and to other real estate projects controlled by the individual respondent.

The Capital Markets Tribunal found that the respondents engaged in a course of conduct that they knew perpetrated a fraud on investors, contrary to s. 126.1(1)(b) of the Securities Act.

The applicant brought a motion for a stay of two decisions of the Investment Industry Regulatory Organization of Canada (IIROC) pending the disposition of his application for a hearing and review.

The applicant also requested that his oral testimony at the stay motion hearing be kept confidential.

The Tribunal applied the three-part test for a stay and found that while there was a serious issue to be tried, the applicant failed to establish that he would suffer irreparable harm if the stay was not granted.

The Tribunal dismissed the stay motion.

Regarding the confidentiality request, the Tribunal applied the open court principle and found that only limited portions of the transcript containing sensitive health and personal information should be redacted to prevent an affront to the applicant's personal dignity.

Staff of the Ontario Securities Commission sought sanctions and costs against Taylor Carr and Dmitri Graham following a merits decision finding they contravened the Securities Act.

Carr was found to have engaged in tipping and insider trading, while Graham was found to have made a misleading statement to Staff during the investigation.

The Capital Markets Tribunal ordered Carr to pay a $15,000 administrative penalty, disgorge $1,215.03, pay $5,000 in costs, and serve a three-year market ban.

Graham, who failed to participate in the sanctions hearing, was ordered to pay a $40,000 administrative penalty, pay $15,000 in costs, and serve a five-year market ban.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondents under subsection 127(10) of the Securities Act, based on a prior decision of the Alberta Securities Commission (ASC).

The ASC had found that the respondents made materially misleading omissions in offering memoranda and perpetrated a fraud by diverting investor funds, imposing significant market bans and financial penalties.

The Capital Markets Tribunal found that the threshold under subsection 127(10) was met and that it was in the public interest to issue a protective order under subsection 127(1).

The Tribunal ordered market bans against both respondents that substantially mirrored the sanctions imposed by the ASC to protect Ontario investors and capital markets.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondent under s. 127(10) of the Securities Act.

The respondent had previously pleaded guilty in the United States to conspiracy to commit securities fraud and securities fraud for his role in a pump-and-dump scheme.

The Capital Markets Tribunal found that the respondent's conviction arose from a course of conduct related to securities.

Given the egregious nature of the fraud and the respondent's status as a former registrant, the Tribunal concluded it was in the public interest to permanently prohibit him from participating in Ontario's capital markets, including permanent trading and director/officer bans.

Staff of the Ontario Securities Commission alleged that the respondents engaged in insider trading and tipping regarding shares of WeedMD Inc. prior to a public announcement of a major expansion.

Carr, an employee of WeedMD, admitted to illegally tipping Rosborough and trading shares while in possession of material non-public information.

Staff alleged that Rosborough subsequently tipped Graham, who then traded WeedMD shares.

The Tribunal found that while the timing of Graham's trades was suspicious, Staff failed to prove on a balance of probabilities that Graham possessed the material non-public information when he traded.

However, the Tribunal found that Graham made materially misleading statements to Staff during the investigation regarding his work relationship with Rosborough, contrary to s. 122(1)(a) of the Securities Act.

A hearing regarding sanctions and costs was ordered to be scheduled.

The respondent Silvio Serrano brought a motion and application seeking disclosure of a Confidential Order and related reasons that authorized redactions to transcripts of a co-respondent's compelled interview.

Prior to the hearing on the merits, the term of the Commissioner who had presided over preliminary procedural matters expired, and a new panel was assigned.

Serrano brought a motion challenging the new panel's jurisdiction, arguing the original Commissioner's term should be extended under s. 4.3 of the SPPA or the matter heard de novo.

The Commission dismissed the panel composition motion, finding the original Commissioner only made procedural rulings and did not participate in the merits, so s. 4.3 did not apply and procedural fairness was not breached.

On the disclosure motion, the Commission ordered that the respondents be provided with redacted versions of the Confidential Order and Reasons, as well as information regarding the legal basis for the redactions, balancing the need for procedural fairness with the interests protected by the confidentiality.

The Filer, Sustainable Real Estate Dividend Fund, applied to the Ontario Securities Commission for an exemption from the prospectus requirement in connection with the distribution of units repurchased or redeemed by the Filer.

The Commission granted the exemption, subject to conditions including that the units are sold through the facilities of the TSX, the Filer complies with resale restrictions under National Instrument 45-102, and the Filer limits the aggregate number of units resold in a calendar year to 5% of outstanding units.

The Filer applied to the Ontario Securities Commission for exemptive relief from the dealer registration and prospectus requirements in respect of trades in exchange-traded funds to capital accumulation plans (CAPs) and non-tax assisted CAPs.

The Commission granted the requested relief, revoking and replacing a previous decision to include exchange-traded funds as an investment choice, subject to various conditions regarding disclosure, fees, performance reporting, and contribution limits.

The Filer, California Gold Mining Inc., applied for an order to cease being a reporting issuer in all applicable Canadian jurisdictions following its acquisition by Stratabound Minerals Corp. via a plan of arrangement.

The Filer became an indirect wholly owned subsidiary of Stratabound and its shares were delisted.

The Filer was subject to a failure-to-file cease trade order but concurrently applied for its revocation.

The Ontario Securities Commission granted the requested relief, ordering that the Filer has ceased to be a reporting issuer.

The applicants applied to the Ontario Securities Commission for exemptive relief from the prospectus requirement for specific trades in non-voting limited partnership units, and for exemptions from short form prospectus and at-the-market distribution eligibility requirements.

The Commission granted the requested relief, revoking a previous initial decision and allowing the exemptions subject to specified conditions.

The Filers applied to the Ontario Securities Commission for exemptive relief from the related issuer investment restrictions and management company reporting requirements under securities legislation.

The relief was sought to allow the Investment Funds to invest in Northleaf Funds, which are related entities due to indirect ownership by Power Corporation of Canada.

The Commission granted the requested relief, subject to conditions including approval by the independent review committee of the Investment Funds and compliance with reporting requirements.

The applicant, a French corporation, applied for exemptive relief from the prospectus and dealer registration requirements under Ontario securities legislation.

The relief was sought to allow the applicant to offer ordinary shares to its Canadian employees through a global employee share offering plan involving temporary and principal collective shareholding vehicles.

The Ontario Securities Commission granted the requested relief, subject to conditions including that the first trade of the securities must occur outside of Canada or to a person outside of Canada, and that the applicant remains a foreign issuer.

The Filers applied to the Ontario Securities Commission for exemptive relief from the Related Issuer Investment Restriction and the Management Company Reporting Requirement under securities legislation.

The relief was sought to permit certain fixed income mutual funds managed by the Filers to invest in Sagard Credit Partners II, a private credit fund in which a substantial securityholder of the Filers holds a significant interest.

The Commission granted the requested relief, subject to conditions including that the investments be consistent with the funds' objectives, approved by the independent review committee, and reported annually.

The applicant, Leith Wheeler Investment Counsel Ltd., applied for exemptive relief from the dealer registration and prospectus requirements under Ontario securities legislation.

The relief was sought to permit the applicant to trade in its proprietary mutual funds to capital accumulation plans (CAPs) and non-tax assisted CAPs sponsored by plan sponsors for which the applicant provides services.

The Ontario Securities Commission granted the requested relief, subject to conditions including disclosure requirements, provision of investment decision-making tools, and compliance with Part 2 of NI 81-102.

The Filer applied to the Ontario Securities Commission for exemptive relief on behalf of proposed and future exchange-traded funds (ETFs).

The requested relief sought exemptions from the requirement to include an underwriter's certificate in the ETFs' prospectuses and from the take-over bid requirements for purchasers of ETF securities in the normal course on a marketplace.

The Commission granted the requested exemptions, noting that authorized dealers do not perform conventional underwriting services and that the application of take-over bid requirements could adversely impact the liquidity of the ETF securities.

The Filer, Great Canadian Gaming Corporation, applied to the Ontario Securities Commission for an order to cease being a reporting issuer following a statutory plan of arrangement and subsequent amalgamations.

The Filer's shares and notes were delisted from the TSX, and all outstanding securities are now held by private entities or sophisticated investors under specific indentures.

The Commission granted the order, satisfied that the Filer met the requirements to cease being a reporting issuer.