Lawrence E. Ritchie

David Berry, a former employee of Scotia Capital Inc., applied for a hearing and review of a decision by a hearing panel of Market Regulation Services Inc. (RS) that dismissed his motion to stay an RS proceeding against him.

Berry argued that the Universal Market Integrity Rules (UMIR) were not validly adopted by the TSX and that RS lacked jurisdiction over him as a former employee.

The Ontario Securities Commission dismissed the application, finding that UMIR are rules of RS, approved by the Commission, and enforceable against TSX Participants and their employees.

The Commission also held that the TSX Act provides the basis for RS's jurisdiction to proceed against Berry as a former employee.

Pala Investments Holdings Limited and its subsidiary applied to the Ontario Securities Commission for an order to cease trade a shareholder rights plan (poison pill) adopted by the board of Neo Material Technologies Inc. in response to Pala's hostile partial take-over bid.

The Commission dismissed the application, finding that the board had acted in accordance with its fiduciary duties to protect the long-term interests of the corporation, and that an overwhelming majority of Neo's shareholders had made an informed decision to approve the rights plan in the face of the outstanding bid.

The Commission concluded it was not in the public interest to interfere with the board's decision or the shareholders' ratification at this time.

The RCMP (Crown) applied under s. 17(1) of the Securities Act for disclosure of compelled evidence obtained by the Ontario Securities Commission during an investigation.

The evidence was sought to assist the Crown in a criminal fraud proceeding against the respondent.

The Commission found that the respondents whose evidence was sought had provided written consent as required by s. 17(3).

Applying the factors from Re Black, the Commission determined it was in the public interest to authorize disclosure, as the consenting respondents waived confidentiality, and the disclosure would not prejudice the respondent's right to make full answer and defence.

The application was granted subject to strict confidentiality and use conditions.

The Royal Canadian Mounted Police (the Crown) applied under section 17(1) of the Securities Act for disclosure of compelled evidence obtained by the Ontario Securities Commission during an investigation.

The evidence was sought to assist in the criminal prosecution of the respondent for fraud.

The Commission granted the application, finding that the relevant witnesses had provided written consent to the disclosure and that authorizing disclosure to the Crown, subject to strict confidentiality and use conditions, was in the public interest and would not prejudice the respondent's right to make full answer and defence.

The applicant, Y, applied under section 17 of the Securities Act for disclosure of compelled and voluntary evidence obtained by the Ontario Securities Commission during an investigation.

Y sought the evidence to make full answer and defence to criminal fraud charges.

The Commission balanced Y's right to make full answer and defence against the privacy interests of the witnesses who provided the evidence.

The Commission granted disclosure for witnesses who consented or did not object, and for those who opposed but were on the Crown's witness list, subject to strict confidentiality terms.

Disclosure was denied for opposing witnesses not on the Crown's witness list.

The Ontario Securities Commission held a hearing to consider a proposed Settlement Agreement between Staff and the respondents, Swift Trade Inc. and Peter Beck.

The respondents admitted to making non-wilful misleading statements regarding the beneficial ownership of a major client during a compliance review.

The Commission approved the settlement, finding it fair and reasonable, and ordered a reprimand, the removal of terms and conditions on Swift Trade's registration, and $20,000 in costs.

The Filer applied for exemptive relief from the self-dealing prohibitions in the Securities Act to permit in specie transfers of portfolio securities between its separately managed accounts and pooled funds.

These transfers would facilitate purchases and redemptions of fund units without incurring significant transaction costs.

The Ontario Securities Commission granted the relief, subject to conditions including prior written client consent, valuation requirements, and the absence of compensation or charges other than nominal administrative fees.

The Filer applied for exemptive relief under section 147 of the Securities Act to extend the lapse date of the mutual fund prospectus for several funds until August 17, 2009.

The extension was requested to permit the continued distribution of securities pending the merger of the funds, after which they would be wound up.

The Ontario Securities Commission granted the exemption, finding that the extension would not affect the currency or accuracy of the prospectus information and would not be prejudicial to the public interest.

The respondent, Claudio Fernando Maya, contested the extension of a temporary order prohibiting him from trading in securities.

Staff alleged that the respondent engaged in trading activity without being registered, failed to conduct due diligence, and unjustifiably relied on the representations of others.

The Commission found that the respondent did not provide satisfactory information to justify not extending the temporary order, balancing the public interest and the seriousness of the allegations against the respondent's submissions.

The temporary order was extended to September 30, 2009.

Pala Investments Holdings Limited and its subsidiary applied to the Ontario Securities Commission for an order to cease trade the shareholder rights plans of Neo Material Technologies Inc. The application was brought in the context of Pala's takeover bid for Neo.

The Commission dismissed the application, finding that the Second Shareholder Rights Plan was adopted by the Neo Board in response to the Pala Offer, was approved by an overwhelming majority of Neo shareholders, and there was no evidence of coercion or that the Board did not act in the best interests of the corporation.

The Commission concluded it was not in the public interest to grant the relief sought at this time.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and Kwok-On Aloysius Lo.

Lo admitted to executing trades that created a misleading appearance of trading activity and price, including wash trades, and to trading in the accounts of two other individuals without being registered.

The Commission approved the settlement agreement, finding it in the public interest, and ordered a 10-year registration ban, a 5-year trading ban with an RRSP carve-out, disgorgement of $18,641, and $5,000 in costs.

The filers, McDonald's Restaurants of Canada Limited and its associated marketing funds, applied to the Ontario Securities Commission for exemptive relief from the prospectus and dealer registration requirements.

The relief was sought to allow the distribution of Class A shares to franchisees once the number of shareholders exceeded 50, which would otherwise preclude reliance on the private issuer exemption.

The Commission granted the requested relief, subject to conditions including restrictions on share transfers and the provision of specific disclosure documents to prospective purchasers.

In an insider trading proceeding, the respondents brought a motion for unrestricted disclosure of forensic images of a third party's computer hard drives.

Staff had withheld two images citing the third party's privacy and sensitive commercial information.

The Commission held that while respondents are entitled to a high standard of disclosure akin to Stinchcombe to make full answer and defence, this right must be balanced against the legitimate privacy interests of third parties.

The Commission ordered disclosure of the disputed images but imposed strict conditions, including that the images remain in the custody of counsel or their expert, not be electronically copied, and be used solely for the purpose of the proceeding.

TSX Inc. sought intervenor status in a hearing and review requested by the respondent regarding a decision of Market Regulation Services Inc. (RS).

The respondent had challenged the validity of the Universal Market Integrity Rules (UMIR) and the TSX's delegation of market regulation to RS.

The Commission granted TSX limited intervenor status, finding that the TSX had a direct interest in the proceeding because its market regulation and enforcement regime was being challenged, and that its participation would be useful without unfairly prejudicing the existing parties.

The filer applied for exemptive relief from the substantial securityholder and related person securities prohibitions under the Securities Act to permit its pooled funds to purchase securities of a related issuer in the secondary market.

The Ontario Securities Commission granted the relief, subject to conditions including approval by the funds' independent review committee and compliance with pricing and transparency requirements for non-exchange traded securities.

The Filer, CHC Helicopter LLC, applied for a decision under the securities legislation of multiple Canadian jurisdictions to be deemed to have ceased to be a reporting issuer.

Following a corporate reorganization and the acquisition of all its outstanding shares, the Filer's securities were delisted and it had fewer than 15 security holders in each jurisdiction.

The Ontario Securities Commission, acting as principal regulator, granted the requested exemptive relief, revoking the Filer's reporting issuer status.

The applicant applied for exemptive relief from the requirement under the Securities Act to pay for securities deposited under a take-over bid within 10 days of the expiry date.

Due to the global financial crisis and delays in processing international wire transfers from Russia, the applicant requested an extension.

The Ontario Securities Commission granted the relief, permitting payment within 12 days of the expiry date.

Staff of the Ontario Securities Commission sought to extend a temporary cease trade order prohibiting short selling in the common equity securities of certain financial sector issuers interlisted in the United States.

The initial order was issued to prevent regulatory arbitrage following emergency orders by the United States Securities and Exchange Commission.

The Commission found it in the public interest to extend the order to parallel the SEC's extensions, thereby promoting fair and orderly markets in Ontario.

The temporary cease trade order was extended with amendments.

The filers applied for exemptive relief from various requirements under the Securities Act and National Instruments in connection with a corporate reorganization involving the wind-up of John Hancock Canadian Corporation into John Hancock Financial Services, Inc., and a subsequent merger with The Manufacturers Investment Corporation.

The Ontario Securities Commission granted the requested relief, including reporting issuer designations, prospectus exemptions, continuous disclosure exemptions, and insider reporting exemptions, subject to certain conditions.

Nortel Networks Limited applied for exemptive relief from the dealer registration and prospectus requirements under the Securities Act for trades in units of proprietary pooled mutual funds to members of its defined contribution pension and savings plans.

The Ontario Securities Commission granted the relief, varying a prior order to permit certain fund-of-fund investments, subject to conditions ensuring compliance with the spirit and intent of the capital accumulation plan exemption.