Mary Condon

The applicant brought a motion for a partial stay of a Canadian Investment Regulatory Organization (CIRO) disciplinary panel's sanctions decision pending a review application.

The applicant sought to stay his suspension as a registered representative and executive.

Applying the RJR-MacDonald test, the Capital Markets Tribunal found that while there was a serious issue to be tried, the applicant failed to establish that he would suffer irreparable harm if the stay was refused.

The applicant's evidence of potential financial loss and loss of clients was deemed speculative and unconvincing.

The motion for a stay was dismissed.

The respondents brought a motion mid-way through a merits hearing to permanently stay the enforcement proceeding against them, alleging the Ontario Securities Commission committed an abuse of process by repeatedly withholding relevant documents and misunderstanding its disclosure obligations.

The Capital Markets Tribunal determined it was appropriate to hear the motion before concluding the merits hearing.

On the merits of the motion, the Tribunal found that while the Commission made several errors regarding its disclosure obligations—including failing to disclose English translations of Chinese documents and certain correspondence—its conduct did not amount to an abuse of process warranting a stay.

The Tribunal dismissed the stay motion but ordered the Commission to conduct a further review of its disclosure and produce any additional relevant non-privileged documents, including new or different information obtained during witness preparation.

The Capital Markets Tribunal imposed sanctions on Phemex Limited and Phemex Technology Pte.

Ltd. for operating an unregistered crypto asset trading platform and selling securities to Ontario investors without a prospectus.

The respondents were permanently banned from participating in Ontario's capital markets and ordered to pay a $300,000 administrative penalty, disgorge US$39,712.43 in fees, and pay $134,975 in costs.

The Tribunal considered the respondents' cooperation as a mitigating factor in determining the administrative penalty.

The Ontario Securities Commission brought a motion to strike portions of the respondents' materials filed for a sanctions and costs hearing, arguing they contained references to communications protected by settlement privilege.

The respondents argued the materials fell under recognized exceptions to settlement privilege, including the right to make full answer and defence and relevance to costs.

The Capital Markets Tribunal granted the motion in part, striking all portions disclosing settlement discussions, finding no exceptions applied.

The Tribunal refused to strike claims that the respondents consistently cooperated with the Commission, as those did not offend settlement privilege.

The Ontario Securities Commission sought sanctions against Manticore Labs OÜ and Manticore Labs Inc. (operating as CoinField) following a merits decision finding they breached the Securities Act through unregistered trading, illegal distribution of securities, and making false and misleading statements to investors.

The respondents operated a crypto asset trading platform that went offline, leaving investors unable to withdraw their funds.

The Capital Markets Tribunal found the misconduct to be serious and ordered permanent market participation bans, an administrative penalty of $2.4 million, disgorgement of $537,034.46, and costs of $89,538.30.

Riot Platforms, Inc., the largest shareholder of Bitfarms Ltd., applied to the Capital Markets Tribunal for an order under s. 127(1) of the Securities Act to cease trade a shareholder rights plan adopted by Bitfarms.

The plan featured a 15% trigger, which was below the 20% threshold established in the take-over bid regime.

Riot did not allege a contravention of Ontario securities law but argued the plan was contrary to the public interest.

The Tribunal clarified the standard for intervening without a contravention, holding that an applicant must demonstrate the conduct undermines clearly discernible animating principles of securities law in a real and substantial way, with a public dimension.

The Tribunal found that the 15% trigger undermined the predictability and certainty of the take-over bid regime.

As Bitfarms failed to demonstrate exceptional circumstances justifying the departure from the 20% threshold, the Tribunal concluded it was in the public interest to cease trade the plan.

The applicant sought a review of a Canadian Investment Regulatory Organization (CIRO) decision finding that he engaged in unapproved outside business activities and securities-related business by recommending and facilitating the sale of syndicated mortgage investments.

The Capital Markets Tribunal dismissed the application, finding no error in the CIRO Panel's conclusions that the applicant's conduct constituted trading and an unapproved outside business activity.

The Tribunal also upheld the sanctions imposed, which included a permanent prohibition from conducting securities-related business, a $300,000 fine, and $30,000 in costs.

The respondents in an enforcement proceeding brought a motion challenging the adequacy of the Commission's witness summaries and seeking further disclosure, including unredacted transcripts and attachments to a letter from a foreign regulator.

The Tribunal found that some witness summaries lacked sufficient precision regarding the documents to be relied upon and ordered the Commission to provide revised summaries.

The Tribunal dismissed the request for unredacted transcripts, finding the redacted information irrelevant, but ordered the disclosure of the letter attachments and a table of concordance for exhibits.

The Ontario Securities Commission brought allegations against Manticore Labs OÜ and Manticore Labs Inc., operators of the CoinField crypto asset trading platform, for violations of the Securities Act.

The Capital Markets Tribunal found that the crypto contracts offered by CoinField were 'investment contracts' and therefore securities.

The Tribunal concluded that the respondents engaged in the business of trading securities without registration, distributed securities without a prospectus, and made false or misleading statements to investors regarding the safety of their funds and withdrawal delays.

The Tribunal also found that the respondents' failure to maintain proper custody of investors' assets and honour withdrawal requests justified a public interest order under s. 127(1) of the Act.

A subsequent hearing was ordered to determine sanctions and costs.

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 and the respondent sought approval of a settlement agreement regarding allegations that the respondent, as CEO of a reporting issuer, made misleading or untrue statements in news releases and filings.

The statements concerned an intellectual property licensing agreement and failed to disclose the relationship between the issuer and the licensee.

The Capital Markets Tribunal approved the settlement, which included a $75,000 administrative penalty, $15,000 in costs, and a five-year director and officer ban, finding the terms fell within a reasonable range of outcomes and were in the public interest.

The respondents entered into a settlement agreement with Staff of the Ontario Securities Commission regarding allegations of unregistered trading, illegal distribution, and making misleading statements in connection with the promotion and sale of cryptocurrency tokens (Axia Coin).

The respondents admitted to breaching multiple provisions of the Securities Act and agreed to pay administrative penalties, disgorgement, and costs, as well as to permanent market bans.

The Capital Markets Tribunal approved the settlement agreement, finding it to be in the public interest and within a range of reasonable outcomes.

The applicant brought an application for review of a decision by the Canadian Investment Regulatory Organization (CIRO) finding she had misappropriated client funds.

The applicant ceased participating in the proceeding in June 2021 and failed to attend the scheduled hearing despite receiving notice.

The Capital Markets Tribunal treated the application as abandoned and dismissed it.

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.