Geoffrey D. Creighton

The Ontario Securities Commission and the respondent agreed to a settlement regarding allegations that the respondent breached a director and officer ban imposed in a previous Tribunal order.

The respondent admitted to remaining a director and officer of two issuers for approximately three years in contravention of the ban.

The Tribunal approved the settlement, finding the proposed sanctions, which included an extended ban and a $6,000 administrative penalty, to be reasonable and in the public interest.

The Ontario Securities Commission and the respondent agreed to a settlement regarding allegations that the respondent breached a previous director and officer ban.

The respondent had remained a director and officer of one non-reporting issuer and became a director and officer of another, contravening a 2023 Tribunal order.

The respondent subsequently resigned and dissolved the entities.

The Tribunal approved the settlement, finding the proposed sanctions, including an extended ban until 2029 and a $7,000 administrative penalty, to be within a reasonable range and in the public interest.

The applicant, a private party, sought standing to bring an application under s. 127(1) of the Securities Act to cease trade the shares of the respondent corporation.

The applicant alleged the respondent's non-offering prospectus contained a misrepresentation regarding the completion of an amalgamation with its Peruvian subsidiary, which the applicant argued could prejudice its contingent creditor claim in Peru.

The Capital Markets Tribunal dismissed the motion for standing, finding that the applicant failed to raise its concerns with Commission staff first, the allegations did not raise a novel securities law issue, the Tribunal was not the appropriate forum to adjudicate Peruvian corporate law, and the applicant was not directly affected by the alleged conduct.

Following a merits decision finding that the respondents perpetrated a securities fraud and that Furtado misled the Commission, the Tribunal held a sanctions hearing.

The Tribunal found the misconduct to be very serious, though not the most egregious, as it involved a legitimate business and no registrable activity.

The Tribunal ordered 10-year market participation bans for all respondents, with a carve-out for Furtado's registered plans.

The respondents were ordered to jointly and severally disgorge $22,200,000, representing the amounts obtained from investors less redemptions and the investment of one fully informed investor.

Furtado was ordered to pay an administrative penalty of $1,000,000, and the corporate respondents $200,000 each.

Costs of $638,613.85 were awarded to the Commission.

The Ontario Securities Commission alleged that Oscar Furtado and his corporate entities defrauded investors in several real estate limited partnerships, traded securities without registration, and made misleading statements to the Commission.

The Capital Markets Tribunal found that Furtado perpetrated a securities fraud in five ways, including failing to disclose his intent to profit from a property acquisition, redeeming units contrary to representations, and misusing assets of other partnerships.

The Tribunal also found that Furtado made misleading statements to the Commission during its investigation.

However, the Tribunal dismissed the allegations that the respondents engaged in the business of trading securities without registration, finding they were raising capital for an underlying real estate business.

The Ontario Securities Commission alleged that the respondents engaged in an illegal distribution of Canopy Growth Corporation shares and that Cormark and Kennedy failed to deal fairly, honestly, and in good faith with Canopy, or alternatively, acted contrary to the public interest.

The allegations centered on a series of transactions involving a private placement, a securities loan agreement, and short sales executed when Canopy was added to the TSX composite index.

The Capital Markets Tribunal dismissed all allegations, finding that the transactions did not constitute an illegal distribution under the extended definition, Canopy was not a client of Cormark or Kennedy, and the respondents did not mislead Canopy or otherwise engage the Tribunal's public interest jurisdiction.

The Capital Markets Tribunal held a sanctions hearing after finding that the respondent breached a 2004 order permanently banning him from acting as a director or officer of an issuer and from trading in securities for 15 years.

The Tribunal ordered permanent market participation bans, disgorgement of over $3.2 million and US$10.7 million, administrative penalties totaling $1,000,000, and $300,000 in costs.

The Tribunal found the respondent's conduct to be a flagrant and recurrent breach of a Tribunal order, warranting significant specific and general deterrence.

Following a merits decision finding that the respondents perpetrated a Ponzi scheme fraud on investors and that the individual respondent misled investigators, the Capital Markets Tribunal held a sanctions and costs hearing.

The Tribunal denied the respondents' last-minute adjournment request, finding no exceptional circumstances.

The Tribunal ordered permanent market bans against all respondents, finding their conduct egregious and deliberate.

The Tribunal also ordered joint and several disgorgement of $661,077 and US$245,000 for the primary fraud (reducing the gross amount by principal repaid to investors) and $70,000 for a secondary fraud.

Administrative penalties of $800,000 were ordered jointly and severally for the frauds, with an additional $350,000 penalty against the individual respondent for his separate breaches.

Costs of $295,413.65 were awarded to the Commission.

Staff of the Ontario Securities Commission alleged that the respondent breached a 2004 settlement order which permanently banned him from acting as a director or officer of an issuer and banned him from trading in securities for 15 years.

The Tribunal found that the respondent breached the director and officer ban by acting as a director and/or officer of 38 Ontario corporations.

The Tribunal also found that the respondent breached the trading ban by participating in the sale of shares in an Ontario corporation and by participating in several offshore stock secured financings where he acted in furtherance of trades.

The allegation of conduct contrary to the public interest was dismissed as no additional conduct beyond the statutory breaches was identified.

Following a merits decision finding that the respondents illegally distributed securities and breached a temporary cease trade order in relation to a hotel development project, the Capital Markets Tribunal held a sanctions and costs hearing.

The Tribunal ordered permanent market bans against the respondents, with a limited carve-out allowing the individual respondent to remain a director and officer of his registered real estate brokerage.

The Tribunal also ordered the respondents to jointly and severally pay an administrative penalty of $600,000, disgorge $13.177 million and US$364,000, and pay $166,000 in costs.

The Canadian Investment Regulatory Organization (CIRO) brought confidential applications for authorization under s. 17 of the Securities Act to disclose information obtained pursuant to s. 11 investigation orders.

CIRO intended to use the compelled banking records in a regulatory proceeding against a registrant, both to make required disclosure and as evidence.

The Capital Markets Tribunal dismissed the applications, finding that under s. 16(2) of the Act, CIRO does not require a s. 17 order to use the compelled documents for its own regulatory purposes in its own proceeding.

In an enforcement proceeding, the moving parties (Cormark and Kennedy) sought a summons directing a non-party (Canopy) to produce documents listed in privilege logs previously provided to Staff.

The Capital Markets Tribunal found that the documents appeared relevant to the moving parties' ability to make full answer and defence, particularly regarding Canopy's state of mind.

The Tribunal issued the summons and ordered that the documents be produced to a third-party referee to conduct a privilege review, as the logs raised questions about the validity of the solicitor-client privilege claims.

Staff of the Ontario Securities Commission brought a preliminary motion to dismiss an application by four companies.

The companies had applied for disclosure-related orders under s. 17(1) of the Securities Act in anticipation of a contempt proceeding that Staff intended to bring for the companies' failure to comply with a summons.

The Tribunal granted Staff's motion and dismissed the companies' application.

The Tribunal held that a contempt proceeding under s. 13(1) is a proceeding under the Act, meaning s. 17(6) authorizes the Commission to disclose protected information without needing a s. 17(1) order.

The Tribunal also found that the companies' request for an order authorizing their own disclosure was premature, as the contempt proceeding had not yet been commenced.

The respondents operated a Ponzi scheme through Mughal Asset Management Corporation and Lendle Corporation, raising over $3 million from investors by falsely representing that funds would be invested in securities.

Instead, funds were used to pay simulated returns to existing investors and for the personal expenses of the directing mind, Usman Asif.

The Capital Markets Tribunal found that the respondents perpetrated a fraud on investors contrary to s. 126.1(1)(b) of the Securities Act.

The Tribunal also found that Asif made false and misleading statements to investigators, unlawfully disclosed an investigation order and summons, and engaged in conduct contrary to the public interest by interfering with the investigation.

An allegation that Asif breached s. 13 of the Act by failing to comply with a summons was dismissed on the basis that s. 13 does not create a positive obligation that can be breached.

During the merits hearing, after Staff closed its case and the parties filed an agreed statement of facts, the respondents requested additional time to gather and present evidence regarding the amount of money repaid to investors.

The respondents had previously stated they would not introduce evidence.

The Capital Markets Tribunal denied the request, finding it was brought too late, the respondents could not assure the evidence was accessible or helpful, and granting it would cause significant unfairness to Staff.

The respondent, Oscar Furtado, brought a motion to adjourn the merits hearing indefinitely due to serious physical and mental health issues.

He also requested that the motion be heard in confidence and that documents containing his personal health information be sealed.

The Capital Markets Tribunal found that Furtado's health constituted exceptional circumstances warranting an adjournment, but declined to grant an indefinite delay, rescheduling the hearing to November 2023.

Applying the Sherman Estate test, the Tribunal ordered that specific details regarding Furtado's symptoms, diagnosis, and treatment be redacted from the adjudicative record and hearing transcript to protect his personal dignity, while maintaining the public's right to know how his health issues affected his ability to participate.

Staff of the Ontario Securities Commission brought a motion for a further and better witness summary from the respondent, Oscar Furtado.

Furtado had provided an amended witness summary stating he would testify generally in accordance with his compelled interview transcripts and refer to documents in Staff's disclosure.

The Capital Markets Tribunal found the amended witness summary deficient under Rule 27(3) of the Tribunal's Rules of Procedure.

The Tribunal held that stating the witness would testify 'generally in accordance with' transcripts created ambiguity about the scope of evidence, failing to disclose its substance.

Furthermore, the broad reference to Staff's disclosure did not sufficiently identify the documents to be referred to.

The Tribunal ordered Furtado to deliver a further and better witness summary.

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.

Staff of the Ontario Securities Commission alleged that the respondent engaged in illegal insider trading contrary to s. 76(1) of the Securities Act.

The respondent obtained material non-public information about a proposed acquisition of a reporting issuer and traded on it, making a profit of $125,064.

The parties entered into a settlement agreement where the respondent admitted to the misconduct, agreed to pay an administrative penalty of $200,000, disgorge his profit, pay costs of $15,000, and be subject to a 5-year market access ban.

The Capital Markets Tribunal approved the settlement, finding the sanctions fell within a range of reasonable outcomes and achieved specific and general deterrence.

The applicant, who was examined as a witness in an OSC investigation, sought an order under s. 17 of the Securities Act authorizing him to disclose his compelled testimony in a U.S. court proceeding.

OSC Staff opposed the application, arguing that the Ontario Superior Court of Justice had jurisdiction over the U.S. court's letter of request and that the Tribunal should decline to exercise its jurisdiction.

The Tribunal found that it was in the public interest to grant the requested relief, as the proposed disclosure advanced the foreign regulatory proceeding resulting from the investigation, and the Ontario Court's involvement did not displace the Tribunal's statutory jurisdiction.