D. Grant Vingoe

During a merits hearing, the Chair of the Panel was announced as the incoming Acting Chair and CEO of the Ontario Securities Commission.

The Panel raised the issue of whether this created a reasonable apprehension of bias, given the Chair's future management responsibilities over Staff.

After receiving submissions, the Panel concluded that a reasonable and informed person might perceive a bias in favour of Staff.

The Chair recused himself from the remainder of the merits hearing and a pending disclosure motion, and the hearing proceeded with the remaining two Panel members.

Staff of the Ontario Securities Commission and the respondent audit firm jointly submitted a settlement agreement for approval regarding the respondent's audits of two investment funds.

The respondent admitted to failing to conduct its audits in accordance with generally accepted auditing standards, including failing to obtain sufficient audit evidence, lacking professional skepticism, and failing to complete required engagement quality control reviews.

The Commission approved the settlement, finding it in the public interest, and ordered the respondent to be reprimanded, pay an administrative penalty of $3.5 million, and pay costs of $500,000.

The respondent brought a motion to halt a section 127 enforcement proceeding, alleging that the Ontario Securities Commission lacked jurisdiction due to institutional bias.

The respondent argued that the Commission's overlapping functions as policy-makers, adjudicators, and board members, particularly regarding the allocation of funds received from a prior settlement agreement, created a reasonable apprehension of bias.

The Commission dismissed the motion, finding that the overlapping functions were statutorily authorized by the Securities Act and did not go beyond what was permitted.

The Commission also found no evidence to overcome the presumption of impartiality or to justify interfering with Staff's discretion in choosing the venue for enforcement.

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

The respondents brought a preliminary motion seeking the panel chair's recusal for bias, which was dismissed as it merely reflected disagreements with findings from the merits hearing.

The Commission found that the respondents raised over $267,000 from investors through fraudulent misrepresentations and misappropriated the funds for personal use.

The Commission ordered permanent market bans with limited carve-outs for personal registered accounts, administrative penalties totaling $650,000, full disgorgement of $267,203, and costs of $267,806.59 apportioned among the respondents.

The Ontario Securities Commission approved a settlement agreement between Staff and The Toronto-Dominion Bank regarding allegations of supervisory inadequacies in TD's foreign exchange trading business from 2011 to 2013.

Staff alleged that TD failed to promote a culture of compliance, allowing traders to inappropriately share confidential customer information with competitors.

TD acknowledged the conduct and agreed to a voluntary payment of $9,300,900 and $800,000 in costs.

The Commission found the settlement to be in the public interest, noting TD's significant remediation efforts and exemplary cooperation.

The Ontario Securities Commission approved a settlement agreement between Staff and Royal Bank of Canada (RBC) regarding allegations of supervisory inadequacies in RBC's foreign exchange (FX) trading business from 2011 to 2013.

Staff alleged that RBC failed to promote a culture of compliance, allowing FX traders to inappropriately share confidential customer information with competitors in electronic chat rooms.

RBC acknowledged the conduct was contrary to the public interest, engaged in significant remediation efforts, and agreed to make a voluntary payment of $13,552,000 and pay $800,000 in costs.

The Commission found the settlement to be in the public interest.

The Ontario Securities Commission approved a settlement agreement with CoinLaunch Corp., an unregistered crypto-asset service provider.

CoinLaunch admitted to engaging in the business of trading in securities without registration by marketing and promoting two security token offerings (BCZERO and ECOREAL).

The Commission found the tokens constituted investment contracts.

The settlement included a $30,000 administrative penalty, disgorgement of $12,233.06, $10,000 in costs, and a five-year ban on trading or acquiring securities.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading, illegal distribution, and fraud in relation to the sale of shares in Natural Bee Works Apiaries Inc. The Commission found that the respondents made fraudulent misrepresentations to investors, including false claims about an imminent NASDAQ listing, a $200 million line of credit, and substantial assets.

The respondents also misused investor funds for personal expenses.

The Commission concluded that all respondents committed fraud, and that Ms. Chickalo and the company engaged in unregistered trading and illegal distribution.

The Commission declined to make separate findings for misleading statements and prohibited listing representations to avoid overlapping contraventions.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondent under subsections 127(1) and 127(10) of the Securities Act.

The respondent had previously pleaded guilty to five counts of fraud over $5,000 under the Criminal Code for misappropriating investor funds intended for a biofuel venture.

The Commission found that the criminal convictions arose from a course of conduct related to securities.

Concluding that a permanent ban was necessary to protect investors, the Commission ordered permanent market bans against the respondent, subject to a limited carve-out allowing him to trade in certain registered and tax-free savings accounts.

The respondent in an Ontario Securities Commission proceeding brought a motion to strike certain paragraphs of an affidavit and factum filed by Staff on an upcoming jurisdiction motion, arguing the paragraphs were irrelevant.

The Commission dismissed the motion to strike, holding that Rule 25.11 of the Rules of Civil Procedure provides an appropriate guideline for striking evidence in Commission proceedings, and that irrelevance alone is insufficient to warrant striking evidence on a preliminary motion.

The relevance of the impugned evidence is best determined by the panel hearing the main motion after the evidence develops in cross-examination.

Mangrove Partners applied for a joint hearing before the Alberta Securities Commission (ASC) and the Ontario Securities Commission (OSC) regarding a proposed transaction between TransAlta Corporation and Brookfield.

TransAlta brought a motion arguing the OSC should decline to hear the application due to an insufficient nexus with Ontario.

The OSC found that while it had jurisdiction, there were no compelling circumstances to warrant exercising it concurrently with the ASC, which was the principal regulator and had stronger connections to the dispute.

The OSC declined to exercise its jurisdiction to hear the application.

Staff of the Ontario Securities Commission sought to extend a temporary cease trade order against the respondents.

Staff requested the extension as part of a Statement of Allegations in a separate proceeding rather than by filing a motion in the existing proceeding as required by the Rules of Procedure.

The Commission waived the procedural requirement under Rule 3, noting that the respondents had notice of the request and did not appear.

The temporary cease trade order was extended until the conclusion of the merits hearing.

The Respondents engaged in unregistered trading of securities in a mortgage investment entity and failed to ensure the investments were suitable for their clients.

Upon discovery, the Respondents cooperated with Staff, voluntarily ceased trading, and offered rescission to investors who made unsuitable investments.

The Ontario Securities Commission approved a joint settlement agreement, imposing a reprimand, an administrative penalty of $100,000, and conditions regarding future redemption requests.

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 decision by the British Columbia Securities Commission (BCSC).

The BCSC had found that the respondents engaged in unregistered trading and illegal distributions of securities, and imposed monetary and non-monetary sanctions.

The Ontario Securities Commission found that the statutory requirements for a reciprocal order were met and that it was in the public interest to protect Ontario investors by imposing substantially similar non-monetary sanctions, including trading bans and director/officer prohibitions, against both the individual respondent and the dissolved corporate respondent.

Following a merits decision finding that the respondent engaged in unregistered trading and advising, the Commission held a written hearing to determine sanctions and costs.

The respondent had placed over 440 discretionary trades in a senior retiree's locked-in retirement account, resulting in a loss of over $56,000.

The Commission ordered 10-year market bans, a 15-year ban on acting as a registrant, investment fund manager or promoter, and a $100,000 administrative penalty.

The Commission also ordered the respondent to pay costs of $35,871.51.

The market bans included an exception for the respondent's own RRSP and RRIF accounts, but only after the administrative penalty and costs are paid in full.

A minority shareholder of the respondent company brought an application under s. 127 of the Securities Act seeking to block a going-private transaction structured as a plan of arrangement.

The applicant alleged the controlling shareholders improperly relied on the 90 percent exemption from minority approval requirements by engaging in a multi-step strategy to dilute minority interests.

The Commission dismissed the application for standing, finding that the applicant delayed in bringing the application, failed to establish a prima facie case of abusive conduct, and had adequate alternative remedies under the CBCA to address concerns regarding price and fairness.

Staff of the Ontario Securities Commission and the respondents entered into a settlement agreement regarding allegations of market manipulation.

During the material time, the respondents engaged in approximately 60 incidents of "spoofing" on the Montreal Exchange, using non-bona fide direct electronic access orders to manipulate the National Best Bid or Offer and trade at artificial prices, profiting by approximately $250,000.

The respondents admitted to breaching s. 126.1(1)(a) of the Securities Act.

The Commission approved the settlement agreement, finding the agreed sanctions, which included administrative penalties totaling $970,000, trading bans, and costs of $30,000, to be reasonable and in the public interest.

Staff of the Ontario Securities Commission commenced an enforcement proceeding against Caldwell Investment Management Ltd. (CIM) alleging failure to provide best execution of trades.

CIM brought a motion seeking disclosure of communications between Staff and potential experts, as well as information regarding the best execution practices of other OSC registrants.

The Commission denied the motion, finding that communications with potential experts were protected by litigation privilege and that the practices of other registrants were irrelevant and confidential.

The Commission ordered disclosure of only one factual notation from the expert materials.

Staff of the Ontario Securities Commission sought approval of a settlement agreement with eToro (Europe) Limited, a Cyprus-based brokerage firm. eToro admitted to breaching Ontario securities law by operating an online trading platform that allowed Ontario residents to trade contracts for differences (CFDs) without being registered or filing a prospectus.

Despite previous assurances to Staff that it did not accept trades from Ontario residents, eToro opened nearly 2,500 accounts for Ontario investors.

The Commission approved the settlement, finding it in the public interest, and ordered an administrative penalty of $550,000, disgorgement of $1,791,163, and costs of $25,000, noting eToro's cooperation and implementation of enhanced compliance procedures.

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 order by the Alberta Securities Commission.

The ASC had found that the respondents engaged in unregistered trading, advising, and fraud.

The Ontario Securities Commission found that the statutory threshold was met and that it was in the public interest to issue a protective order.

The Commission ordered market-access bans and other restrictions against the respondents to protect Ontario's capital markets.