Paul M. Moore, Q.C.

The Ontario Securities Commission approved a settlement agreement between Staff and John Bennett, former CEO and chairman of Bennett Environmental Inc. Bennett admitted to failing to disclose a material change regarding a contract dispute and to authorizing misleading disclosure, contrary to the Securities Act.

The Commission found the agreed sanctions, including a ten-year director and officer ban, a reprimand, a $250,000 administrative penalty, and $50,000 in costs, to be proportionate and in the public interest.

The Ontario Securities Commission approved a settlement agreement regarding Terrence William Marlow and his companies, which were in bankruptcy and receivership following the loss of investor funds.

The Commission noted that Marlow, a former chartered accountant, had lost everything and was on welfare.

Although no monetary penalty was imposed due to the ongoing receivership and limited recovery for investors, the Commission ordered permanent cease trade and director/officer bans against Marlow, finding the sanctions reasonable and in the public interest.

The Ontario Securities Commission approved a settlement agreement with a registrant who sold convertible debentures off-book without the knowledge or approval of his sponsoring dealer.

The registrant sold $171,000 worth of debentures and received $28,200 in commissions.

The Commission ordered terms and conditions on his registration, a reprimand, $5,000 in costs, and a settlement payment of $28,200 to be designated for the benefit of investors.

The Ontario Securities Commission held a hearing to consider a settlement agreement between staff and the respondents regarding repeated failures to file annual and interim financial statements and related certificates on time.

The respondents admitted their conduct was contrary to the public interest and Ontario securities laws.

The Commission approved the settlement, ordering the corporate respondents to institute procedural changes and each pay a $5,000 administrative penalty, and reprimanding all respondents, including the individual respondent.

The Applicants sought a hearing and review of a decision by the Director of the Investment Funds Branch, which approved a merger of six labour sponsored investment funds but required that the costs of the merger not be borne by the Funds.

The Applicants argued that the merger would benefit investors and that the Funds should bear the costs.

The Ontario Securities Commission confirmed the Director's decision, holding that it is generally inappropriate for merger costs to be charged to the funds, and the Applicants failed to provide compelling reasons to depart from this approach.

Staff of the Ontario Securities Commission brought a motion to extend a temporary cease trade order against Momentas Corporation and its principals.

Momentas had been raising capital by selling convertible debentures to accredited investors to fund its automated equity trading system and foreign currency trading.

The Commission found that Momentas was acting as a market intermediary because it employed a significant sales force to sell its own securities and used the proceeds to trade professionally for the indirect benefit of its investors.

As a market intermediary, Momentas could not rely on the accredited investor exemption and was required to be registered.

The Commission extended the temporary cease trade order pending the hearing on the merits, with limited carve-outs allowing Momentas to continue developing its trading system and to close out foreign currency positions.

The Ontario Securities Commission held a hearing to determine whether it was in the public interest to impose sanctions against Pierre Alfred Montpellier and his companies under section 127 of the Securities Act.

Montpellier had previously pleaded guilty to criminal fraud and theft for operating a Ponzi scheme that defrauded 128 investors of over $5.3 million.

The Commission found that Montpellier's egregious conduct demonstrated he could not be trusted to participate in the capital markets.

The Commission ordered that Montpellier's registration be terminated, that he and his companies permanently cease trading in securities (with no RRSP carve-out), and that he be permanently prohibited from acting as a director or officer of any issuer.

The Special Committee of Financial Models Company Inc. applied for orders under sections 104(1) and 127(1) of the Securities Act to cease-trade a take-over bid by a significant shareholder, Katotakis.

The Special Committee alleged the bid did not comply with Part XX of the Act and was contrary to the public interest because it relied on locked-up shares to meet minority approval thresholds for a follow-on transaction and improperly relied on a valuation exemption.

The Ontario Securities Commission dismissed the application, finding no technical breach of Rule 61-501 and no abuse of the capital markets, as the transaction was not artificial and did not defeat the reasonable expectations of shareholders given the prior disclosure of the shareholder agreement.

The Ontario Securities Commission approved a settlement agreement with Mark Edward Valentine, former chair of Thompson Kernaghan & Co. Valentine pleaded guilty to securities fraud in the US and admitted to creating a culture of conflict of interest and noncompliance in Ontario.

The Commission found the settlement, which included a permanent director/officer ban, a 15-year cease-trade order, termination of registration, and a $100,000 costs payment, to be in the public interest.

Staff of the Ontario Securities Commission brought a motion for an order authorizing the disclosure of certain documents for a hearing on the merits.

The receiver of Philip Services Corp. claimed solicitor-client privilege over the documents.

The Commission found that privilege over the documents was waived when they were disclosed to the company's auditors, who were acting as third parties rather than agents for the purpose of obtaining legal advice.

The Commission also found that the company failed to take reasonable steps to protect the privilege and had put the legal opinions in issue.

The motion was granted, and the documents were ordered to be disclosed.

Following his criminal conviction for insider trading, the Ontario Securities Commission held a hearing to determine whether to impose public interest sanctions against the respondent under s. 127 of the Securities Act.

The respondent, while an officer and director of a reporting issuer, had sold shares with knowledge of undisclosed material negative assay results, avoiding significant losses.

The Commission found his conduct egregious and a breach of fiduciary duty.

To protect the capital markets, the Commission ordered a 15-year cease trade order and a 15-year ban on acting as a director or officer of any reporting issuer, with limited carve-outs for personal trading.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and advising, and distributed securities without a prospectus, in relation to an 'Asset Securitization Management Portfolio' promoted on their website.

The Commission found that the Trading Program was an investment contract and therefore a security.

The Commission held that offering the program on the internet constituted an act in furtherance of a trade, and that the respondents held themselves out as being in the business of advising.

Given the individual respondent's past criminal convictions for fraud and the highly questionable nature of the investment scheme, the Commission ordered permanent cease trade and director/officer bans.

The Staff of the Investment Dealers Association of Canada applied for a hearing and review of a District Council decision regarding a registered representative who traded for a client attempting to manipulate the market price of a security.

The District Council had dismissed the allegation that the respondent facilitated the business of an unregistered entity and imposed a penalty without a fine or disgorgement.

The Ontario Securities Commission found that the District Council misapprehended the evidence of facilitation and the public interest in strong sanctions for willful market manipulation.

The Commission set aside the dismissal, imposed a fine of $128,504.55 (including disgorgement of commissions), and suspended the respondent's approval for seven years.