Lawrence P. Haber

The respondent Alli brought a motion for a stay of proceedings, alleging that Staff's former outside counsel was in a conflict of interest and had concocted a fraud allegation to bully him into a settlement.

Staff brought a motion to dismiss Alli's motion on a preliminary basis.

The Capital Markets Tribunal granted Staff's motion and dismissed the request for a stay, finding that Alli had significantly delayed bringing the motion without reasonable explanation, the issues raised were irrelevant to the proceeding, and he failed to meet the high bar for a stay.

The Tribunal also dismissed Alli's request for declaratory relief and granted Staff's request to strike portions of Alli's affidavit and closing submissions that improperly disclosed privileged and irrelevant information.

The applicant sought an order to keep portions of the adjudicative records and written submissions confidential in a proceeding before the Capital Markets Tribunal.

The records contained compelled evidence from an investigation that had already been made public in a related receivership application.

The Tribunal dismissed the request, finding that the applicant failed to meet the high bar required to depart from the open court principle, especially given that the material had been publicly available for over a year.

The respondent, a mutual fund dealing representative, managed the investments of an elderly, vulnerable client who was diagnosed with terminal cancer.

Shortly before her death, the client executed a will and powers of attorney naming the respondent as her power of attorney for property and personal care, alternate executor, and sole beneficiary of her estate.

The respondent failed to report these appointments and the testamentary gift to his dealer firm, contrary to MFDA Rules and the firm's policies and procedures regarding conflicts of interest.

The Capital Markets Tribunal found that the respondent breached MFDA Rules and his firm's policies, and that his failure to address these conflicts of interest constituted a breach of his statutory obligation under OSC Rule 31-505 to deal with his client fairly, honestly, and in good faith.

Following a merits decision finding that the respondents obstructed an investigation by Staff of the Ontario Securities Commission, the Capital Markets Tribunal held a sanctions and costs hearing.

The Tribunal declined to rule on whether the respondents' crypto assets were securities, finding it inappropriate for a sanctions hearing.

The Tribunal imposed a reprimand, ordered immediate resignation from any director or officer positions, and imposed a five-year ban on acting as a director, officer, registrant, or promoter.

The Tribunal also ordered the respondents to pay $184,000 in costs, split equally between them, after applying discounts to Staff's requested amount.

The applicant sought to revoke a section 11 investigation order after the Ontario Securities Commission publicly disclosed his compelled testimony in a receivership application without first obtaining a section 17 disclosure order.

The Tribunal held that the Commission is bound by the confidentiality provisions of section 16 and cannot publicly disclose compelled evidence without a section 17 order.

However, the Tribunal concluded that revoking the section 11 investigation order was not an appropriate remedy for the improper disclosure, as the disclosure occurred after the order was issued and revocation would be purely punitive.

Staff of the Ontario Securities Commission alleged that the respondents obstructed an investigation into their raising of funds through a crypto asset token.

The respondents sent an email to subscribers advising them not to comply with Commission summonses and disparaging the Commission's mandate.

The Commission found that the respondents were responsible for the conduct, which successfully obstructed the investigation.

The Commission held that it was not required to seek a contempt order under s. 13(1) of the Securities Act, and that the respondents' conduct engaged the animating principles of the Act and was abusive of the capital markets, warranting a sanctions and costs hearing under s. 127.

Wilks Brothers, LLC applied for a review of a decision by TSX Inc. granting exemptive relief to Calfrac Well Services Ltd. The relief allowed Calfrac to retroactively correct a shareholder vote related to its recapitalization, in which votes from an ineligible shareholder (AIMCo) were inadvertently included.

The Commission found that Wilks had standing to bring the application as it was directly affected by the TSX decision.

However, the Commission dismissed the application on the merits, finding that the TSX did not consider irrelevant grounds, did not impose an illegal condition, did not overlook material evidence, and appropriately considered the public interest.

The Commission concluded that the agreement to rescind AIMCo's subscription was not an issuer bid under NI 62-104.

The Mutual Fund Dealers Association of Canada (MFDA) Staff applied to the Ontario Securities Commission for a hearing and review of an MFDA hearing panel decision.

The MFDA panel had permanently banned the respondent from the industry and ordered costs, but declined to impose a financial penalty for his misappropriation of $39,270 from a client's line of credit, citing his inability to pay and the fact that the bank reimbursed the client.

The Commission found that the MFDA panel erred in law and principle by permitting the respondent to retain the benefit of his misconduct, relying on irrelevant mitigating factors, and overemphasizing his inability to pay.

The Commission substituted its own decision, varying the MFDA order to include a fine of $52,270, representing disgorgement of the retained misappropriated funds plus an administrative penalty.

Staff of the Ontario Securities Commission sought to extend a temporary cease trade order against the respondents, who were allegedly operating a crypto-asset investment scheme in breach of registration and prospectus requirements.

The Commission found sufficient evidence of conduct that may be harmful to the public interest, noting the respondent's admission that the crypto-assets continued to circulate and that he was engaging with a potential new investor.

The temporary order was extended until 14 days after the release of the merits decision in a related proceeding.

Staff of the Ontario Securities Commission and the respondents sought approval of a settlement agreement concerning allegations of unregistered trading and illegal distributions.

The respondents, foreign related parties, operated online trading platforms offering contracts for difference to Ontario investors without being registered or filing a prospectus.

The Commission approved the settlement agreement, which included a $600,000 administrative penalty, disgorgement of approximately $3 million USD, and $10,000 in costs, finding it to be in the public interest and within a range of reasonable outcomes.

Katanga Mining Limited applied to vary a 2018 settlement order requiring an external review of its accounting practices, which was substantially complete but delayed by the pandemic.

Staff of the Commission consented to the variation.

The Commission waived service on the individual respondents, dismissed a former investor's request for intervenor status, and granted the variation, allowing the review to conclude on terms acceptable to Katanga and the consultant.

Following a merits hearing where the respondents were found to have engaged in unregistered trading, illegal distributions, and fraud by raising approximately $11 million from investors, the Ontario Securities Commission held a sanctions and costs hearing.

The Commission ordered permanent market bans against the respondents, with limited carve-outs.

The respondents were ordered to jointly and severally disgorge $8,711,138, representing the funds obtained through non-compliance less amounts loaned in conformance with investor promises.

Administrative penalties of $750,000 each were imposed on Morteza Katebian and Money Gate Corp., and $600,000 on Payam Katebian.

The respondents were also ordered to pay $597,122.58 in costs.

Epix Resource Finance Corporation applied for an order under section 127 of the Securities Act against Aberdeen International Inc., alleging Aberdeen failed to comply with obligations applicable to non-redeemable investment funds.

The Commission considered whether Epix should be granted standing to proceed as a private party.

The Commission dismissed the application, finding that Epix failed to demonstrate it was in the public interest to bypass Commission Staff's usual gatekeeper processes and policy-based filtering.

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

The investigation involved allegations of unregistered trading and illegal distributions.

Staff presented evidence that the investigation was ongoing but had been obstructed by the conduct of two respondents, who were subject to a separate Statement of Allegations for obstruction.

The Commission found sufficient evidence of conduct harmful to the public interest and extended the temporary order against all respondents until the conclusion of the merits hearing in the related obstruction proceeding.

The respondent, Sean Daley, brought a motion for further disclosure from Staff of the Ontario Securities Commission in a proceeding alleging obstruction of an investigation into crypto-asset ventures.

Daley sought broad disclosure of all materials from the underlying investigation, specific documents including internal Staff communications, and an order under s. 17 of the Securities Act permitting him to share disclosure with his non-participating co-respondent.

The Commission dismissed the motion, finding that Staff's disclosure obligations were limited to the four corners of the obstruction allegations, that internal analysis and opinions were irrelevant, and that sharing disclosure with the co-respondent posed an unacceptable risk to confidentiality given the co-respondent's past conduct.

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

The BCSC had found that the respondents committed securities fraud by diverting investor funds from mortgage investment corporations to related companies for start-up costs.

The BCSC imposed permanent market bans and administrative penalties.

The Ontario Securities Commission found it in the public interest to reciprocate the BCSC's order, imposing permanent trading, acquisition, and director/officer bans against the respondents in Ontario to protect the capital markets.

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.

Staff of the Ontario Securities Commission alleged that Money Gate Mortgage Investment Corporation (MGMIC), Money Gate Corp. (MGC), Morteza (Ben) Katebian, and Payam Katebian engaged in unregistered trading, illegal distributions, and fraud.

The Commission found that MGMIC, Ben, and Payam engaged in the business of trading in securities without registration and distributed securities without a prospectus or valid exemptions.

Furthermore, the Commission concluded that all four respondents perpetrated a fraud on investors by failing to disclose the true nature of MGMIC's operations, failing to abide by lending parameters, and improperly diverting loan advances to the benefit of the respondents or their controlled companies.

The Applicants sought a hearing and review of a decision by the Director of the Ontario Securities Commission refusing to issue a receipt for The Bitcoin Fund's prospectus.

The Director had refused the receipt on the grounds that bitcoin is an illiquid asset under NI 81-102 and that issuing the receipt was not in the public interest due to concerns about valuation, safeguarding of assets, and auditability.

The Commission set aside the Director's decision, finding that Staff failed to prove bitcoin is an illiquid asset given the evidence of substantial trading volumes on regulated exchanges.

The Commission also found that the Applicants had taken reasonable steps to mitigate operational risks through the fund's static buy-and-hold structure, the use of a regulated index for valuation, and the engagement of professional custodians and auditors.

The Director was ordered to issue a receipt for the prospectus.