M. Cecilia Williams

Staff of the Ontario Securities Commission and the respondents sought approval of a settlement agreement.

The respondents admitted to operating multilateral trading facilities for fixed income securities in Ontario without being recognized as an exchange or exempted, contrary to subsection 21(1) of the Securities Act.

The respondents cooperated with Staff, self-reported the issues, and proactively implemented a remediation program.

The Commission approved the settlement, ordering disgorgement of $663,305.20 and an administrative penalty of $2,506,011.80, finding the terms fell within a range of reasonable outcomes and were in the public interest.

Following a merits decision finding that the respondents breached a cease trade order by issuing approximately US$7.4 million in convertible debentures, the Commission held a sanctions and costs hearing.

The Commission ordered permanent market bans against the individual respondents, finding their conduct egregious and demonstrating a serious risk to the public.

The Commission ordered disgorgement of the funds obtained from new debentures, but excluded the value of rolled debentures as no new funds were obtained.

Administrative penalties totaling $600,000 and costs totaling $100,000 were also ordered against the individual respondents.

Staff and the respondents agreed to adjourn the start of a complex insider trading merits hearing to allow Staff to present investigator evidence by affidavit, reducing the number of hearing days required.

The Commission held that while a formal motion for an adjournment was not required in these circumstances, the parties still had to establish 'exceptional circumstances' under Rule 29(1) despite their agreement.

The Commission found that the pandemic and the efficient use of affidavit evidence to eliminate eight days of live testimony constituted exceptional circumstances.

The adjournment was granted.

The applicant applied for a hearing and review of an IIROC decision.

He sought a further adjournment of the hearing and an extension of time to file reply submissions due to the continued unavailability of his counsel for health reasons.

The Ontario Securities Commission granted the adjournment, finding that the medical note provided exceptional circumstances justifying the delay.

The Commission also ordered that the medical note be marked as confidential to protect the counsel's privacy.

The Ontario Securities Commission approved a settlement agreement with Coinsquare Ltd. and its executives regarding market manipulation and whistleblower reprisal.

Coinsquare admitted to inflating trading volumes on its crypto asset platform through wash trades and taking reprisals against an internal whistleblower.

The settlement included significant administrative penalties, bans on the executives acting as directors or officers, and requirements for corporate governance improvements.

The moving parties, respondents in an insider trading and tipping enforcement proceeding, brought a motion seeking further documentary disclosure from Staff of the Ontario Securities Commission.

They requested all relevant, non-privileged investigator notes, internal communications, and a log of privileged documents.

The Commission dismissed the motion, finding that the requested documents, including investigator notes and internal emails, constituted internal analysis, commentary, or opinion, which have no probative value and are therefore irrelevant.

The Commission also declined to order Staff to conduct a document-by-document relevance review or provide a privilege log, as no documents were withheld on the basis of privilege.

Staff of the Ontario Securities Commission and the respondents sought approval of a settlement agreement regarding the respondents' operation of a crypto asset mining business.

The respondents admitted to engaging in unregistered trading, illegal distribution of securities, and making prohibited representations to investors.

The Commission found that the respondents raised over $364,000 from 43 investors through investment contracts promising guaranteed returns, while failing to purchase the necessary mining rigs or protect the funds.

The Commission approved the settlement, ordering administrative penalties, disgorgement, costs, and market bans, noting the respondents' cooperation and partial repayment to investors.

The applicant sought a 60-day extension to serve his hearing materials and an adjournment of his hearing and review of an IIROC decision to September 2020.

He cited his counsel's health issues, the unavailability of one of his lawyers, and difficulties accessing physical files due to COVID-19 restrictions.

Staff of IIROC and the OSC opposed the request.

The Commission found that while COVID-19 restrictions and the need to await a decision on a summons did not justify the delay, the combination of lead counsel's health issues, the departure of co-counsel, and the applicant's inability to retain new counsel constituted exceptional circumstances.

The Commission granted the 60-day extension for materials and adjourned the hearing to July 2020, balancing the applicant's right to participate with the public interest in timely proceedings.

Starlight Investments Capital LP applied for exemptive relief on behalf of certain mutual funds to permit a fund-on-fund structure.

The relief sought exemptions from restrictions prohibiting an investment fund from knowingly making an investment in a person or company in which it is a substantial securityholder, and from restrictions regarding investments in issuers where an officer, director, or substantial securityholder has a significant interest.

The Ontario Securities Commission granted the requested relief, subject to conditions including that the investments are compatible with the funds' fundamental investment objectives and are effected at an objective price.

Staff of the Ontario Securities Commission alleged that MOAG Copper Gold Resources Inc. and its directors, Gary Brown and Bradley Jones, violated a temporary cease trade order by issuing and selling approximately US$7.4 million in convertible debentures to Taiwan residents.

The Commission found that the issuance of both new debentures for cash and rolled debentures in exchange for forbearance of repayment constituted trades in securities.

The Commission further found that Brown and Jones engaged in acts in furtherance of these trades, thereby contravening Ontario securities law.

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.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order under subsection 127(10) of the Securities Act reciprocating sanctions imposed by the British Columbia Securities Commission (BCSC).

The BCSC had found that the respondents perpetrated a fraud and imposed permanent and long-term market bans.

The Commission found that the statutory test was met and that it was in the public interest to issue an order substantially replicating the BCSC's non-monetary sanctions to protect Ontario investors.

The Filer, Gluskin Sheff + Associates Inc., applied for exemptive relief from the prohibitions in the securities legislation against an investment fund knowingly making an investment in a person or company in which it is a substantial securityholder, or in an issuer in which an officer, director, or substantial securityholder has a significant interest.

The relief was sought to permit certain top funds to invest in underlying funds managed by an affiliate in a 'fund-on-fund' structure.

The Ontario Securities Commission granted the requested relief, subject to several conditions including disclosure requirements and restrictions on fee duplication.

The Ontario Securities Commission approved a settlement agreement with CoinLaunch Corp., an unregistered crypto-asset service provider.

CoinLaunch admitted to engaging in the business of trading in securities without registration by marketing and promoting two security token offerings (BCZERO and ECOREAL).

The Commission found the tokens constituted investment contracts.

The settlement included a $30,000 administrative penalty, disgorgement of $12,233.06, $10,000 in costs, and a five-year ban on trading or acquiring securities.

The applicant sought a hearing and review of an IIROC hearing panel's decisions on merits and sanctions.

The IIROC panel had found that the applicant engaged in personal financial dealings with a client and made false and misleading representations to his firm, resulting in a two-year suspension, fines, and disgorgement.

The Commission dismissed the application, finding that while the IIROC panel erred in its analysis of the transition rules regarding a repealed rule, the rule remained applicable to the applicant's conduct.

The Commission found no other errors of law or incorrect principles in the IIROC panel's findings of fact, its conclusion that the applicant's statements were false and misleading, or its sanctions order.

The applicant applied for exemptive relief on behalf of several mutual funds to be exempted from the ETF Prospectus Form Requirement, the Underwriter's Certificate Requirement, and the Take-Over Bid Requirements.

The Ontario Securities Commission granted the requested exemptions, allowing the funds to file a simplified prospectus and annual information form in respect of the ETF Securities, and exempting purchasers of ETF Securities from the Take-Over Bid Requirements.

The applicant, an investment fund manager, applied to the Ontario Securities Commission for exemptive relief from subsection 5.1(a) of National Instrument 81-105.

The applicant sought permission to pay participating dealers for direct costs related to cooperative marketing initiatives where the primary purpose is to provide educational information concerning financial planning matters.

The Commission granted the requested exemption, subject to several conditions, including that the applicant does not require dealers to sell its funds and that the educational materials contain only general information.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order under subsection 127(10) of the Securities Act against the respondents, who had previously entered into a settlement agreement with the Alberta Securities Commission for unregistered trading and illegal distribution.

The respondents consented to the requested order.

The Commission granted the order, imposing reciprocal market prohibitions and trading bans in Ontario until August 17, 2023.

Big 8 Split Inc. applied to the Ontario Securities Commission for an order declaring that it has ceased to be a reporting issuer in all jurisdictions of Canada.

The applicant represented that it has fewer than 51 securityholders worldwide, its securities are not traded on any marketplace, and it has no intention to seek public financing.

The Commission granted the order, finding that the test under the legislation was met.

Claret Asset Management Corporation applied for exemptive relief from the substantial securityholder investment restrictions under subsections 111(2)(b) and 111(4) of the Securities Act (Ontario).

The Filer sought to implement a multi-fund structure allowing its top funds to invest more than 20% of their net asset value in underlying funds, including a Cayman Master Fund, to achieve economies of scale and tax optimization.

The Ontario Securities Commission granted the requested relief, subject to several conditions including prospectus exemption requirements, objective pricing, and disclosure obligations.