Kevin J. Kelly

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

The Commission ordered cease trade orders, director and officer bans, and reprimands against the respondents.

Furthermore, the Commission ordered disgorgement of $900,000 from the CEO and $3,000,000 jointly and severally from the Taylor respondents.

The Commission declined to award costs to Staff due to various issues with Staff's conduct during the investigation and proceedings.

The moving party sought an adjournment of the sanctions hearing pending his application to the Divisional Court for judicial review of the decision on the merits.

He argued he was denied procedural fairness because the Commission failed to consider a settlement agreement he entered into with Staff.

The Commission denied the adjournment motion, finding it premature.

Granting the adjournment would place an incomplete record before the Divisional Court, as the sanctions applied to the moving party would be unknown.

The Commission also rejected the submission that the moving party was denied procedural fairness bringing him within the exception in Ontario (Liquor Control Board) v. Lifford Wine Agencies, noting little or no prejudice to him in proceeding with the sanctions hearing.

Following a merits decision finding that the respondents breached continuous disclosure obligations by failing to disclose the potential revocation of mining leases in Sierra Leone, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission declined to impose administrative penalties or order the corporate respondent to implement new disclosure policies because Staff failed to provide adequate notice of these specific sanctions in the Notice of Hearing.

The CEO, who was the driving force behind the non-disclosure, was reprimanded and banned from acting as a director or officer of any issuer for 10 years.

The CFO, who acquiesced in the failures, was reprimanded and banned for 12 months.

The corporate respondent and the CEO were ordered to pay $60,000 and $40,000 respectively towards the costs of the investigation and hearing.

The Ontario Securities Commission held a hearing to consider whether to approve settlement agreements between Staff and five respondents.

The respondents admitted to acting as market intermediaries and trading in securities of Imagin Diagnostic Centres Inc. without being registered, contrary to section 25(1) of the Securities Act.

The Commission approved the settlement agreements, imposing various prohibitions on the respondents acting as directors, officers, or registrants, and ordering one respondent to pay a $15,000 administrative penalty.

Staff of the Ontario Securities Commission brought a proceeding against the respondent for engaging in trading practices that contributed to a misleading price for shares of a publicly traded company.

The respondent, while employed at a registered firm but not registered himself, executed late-day trades with limit orders that resulted in upticks, creating a misleading appearance of market activity.

The parties reached a Settlement Agreement wherein the respondent admitted to conduct contrary to the public interest.

The Commission approved the Settlement Agreement, finding the agreed sanctions—including a four-month suspension of registration, a four-month cease trade order, two years of supervision, completion of a conduct course, and $7,000 in costs—to be within acceptable parameters and in the public interest.

The Ontario Securities Commission held a hearing to determine whether Rex Diamond Mining Corporation and its officers breached the Securities Act by failing to disclose material changes regarding the cancellation of its mining leases in Sierra Leone.

The Commission found that Rex failed to issue news releases and file material change reports when it received warning letters and notices that its leases were cancelled.

The Commission also found that Rex provided misleading disclosure in its public filings and provided an incomplete chronology to Market Regulation Services Inc. The CEO and CFO were found to have authorized, permitted, or acquiesced in these breaches, acting contrary to the public interest.

The respondents brought a motion for an order requiring Staff of the Ontario Securities Commission to make meaningful disclosure of documents relevant to the specific allegations against them.

Staff had provided a database containing over 4.3 million pages of documents obtained during a four-year investigation, without separating relevant from irrelevant material.

The Commission held that Staff had not satisfied its legal obligation to make meaningful disclosure simply by delivering the massive database.

Staff was ordered to apply reasonable judgment to identify and disclose the documents relevant to the specific allegations against each respondent, rather than foisting the obligation to sift through the material onto the respondents.