Robert L. Shirriff

Following a finding that the respondents engaged in an illegal scheme to induce vulnerable individuals to transfer locked-in RSPs into private companies, the Commission held a hearing on sanctions and costs.

The Commission ordered permanent cease trade orders, director and officer bans, and reprimands against the architects of the scheme.

The registrant involved had his registration terminated and was subject to a five-year cease trade order.

The respondents were ordered to pay costs totaling $108,000, apportioned based on their degree of responsibility.

The Ontario Securities Commission held a hearing to consider whether the respondent, a mutual fund salesperson, breached the Securities Act and acted contrary to the public interest by recommending an aggressive leveraging strategy to his clients.

The Commission found that the respondent failed to comply with the know-your-client and suitability obligations under OSC Rule 31-505 and failed to deal fairly, honestly, and in good faith with his clients.

The respondent recommended excessive leveraging that was entirely unsuitable given the clients' financial circumstances, risk tolerance, and investment objectives.

However, the Commission dismissed the allegation that the respondent gave undertakings relating to the future value of the investments in breach of section 38(2) of the Act.

A sanctions hearing was ordered to follow.

The Ontario Securities Commission held a hearing regarding allegations that the respondents participated in an illegal distribution of shares in four private companies.

The scheme involved convincing individuals to access locked-in retirement savings plans by transferring funds to purchase shares in the private companies, after which the respondents would lend a portion of the invested amount back to the investors.

The Commission found that Cornwall, Simpson, and Xavier participated in an illegal distribution of securities without a prospectus or available exemption.

Xavier, a registrant, was also found to have failed his know-your-client and suitability obligations and failed to process trades through his sponsoring dealer.

All respondents, including Cook who provided qualification letters, were found to have engaged in conduct contrary to the public interest.

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

A parallel proceeding involving some of the same respondents and allegations was pending before the Alberta Securities Commission (ASC).

The respondent requested that the settlement agreement and hearing transcripts remain confidential to avoid prejudicing the ASC proceeding.

The Commission granted the confidentiality order, directing that the materials remain confidential until the earlier of the release of the ASC decision or the commencement of the substantive OSC hearing, subject to Staff's disclosure obligations to the other respondents.

The applicant, acting as receiver and manager of a company, applied under s. 17(1) of the Securities Act for an order permitting the use of transcripts of compelled testimony in civil proceedings against the company's former auditor.

The Commission dismissed the application, holding that the public interest under s. 17 relates to balancing the integrity of the investigative process and the privacy of those investigated, and does not include facilitating civil actions by investors.

The Commission also confirmed that the applicant could ask relevant questions in the civil proceedings provided the transcripts were not used or referenced.

The Ontario Securities Commission approved a settlement agreement with a former vice president regarding allegations of insider trading and failure to disclose a material change.

The respondent admitted to exercising options and selling shares while aware of an undisclosed contract dispute, avoiding a loss of approximately $729,000.

The settlement included a 15-year trading ban, a 15-year ban on acting as a director or officer, and a $150,000 administrative penalty.

The Commission found the settlement to be in the public interest, noting mitigating factors such as the respondent's lack of experience, reliance on the company's CFO, and cooperation with Staff.

The respondent brought motions for immediate disclosure of materials generated during an investigation and for permission to use those materials to prepare for an interview by the United States Securities and Exchange Commission (SEC).

The Ontario Securities Commission ordered staff to disclose the materials immediately, finding that 'as soon as is reasonably practicable' means without delay if no herculean efforts are required.

The Commission also held that the respondent's use of the materials to prepare for the SEC interview would not breach the implied undertaking rule or section 16(2) of the Securities Act, given the intertwined nature of the SEC and Commission investigations.

Following a merits hearing where the respondents were found to have traded in securities without registration, engaged in an illegal distribution, and failed to disclose commissions, the Commission held a sanctions hearing.

The Commission ordered a permanent cease trade order and removal of exemptions against the principal respondent, along with a disgorgement order of $600,624.

The other respondents received seven-year cease trade orders and were each ordered to pay $7,500 in costs.

The respondent, a former principal of Eron Mortgage Corporation, was convicted of securities-related fraud and theft in British Columbia for his role in a massive scheme that caused $170 million in investor losses.

Staff of the Ontario Securities Commission sought permanent market prohibitions against him under s. 127 of the Securities Act, citing evidence that he intended to return to Ontario to promote a poker company upon his release from prison.

The Commission held that it had jurisdiction to make the order despite the conduct occurring in British Columbia, as an Ontario nexus is not a strict pre-condition but a factor to consider.

Given the egregious nature of the respondent's past conduct, his criminal convictions, and the reasonable apprehension of future harm to Ontario capital markets, the Commission ordered permanent trading and director/officer bans.

No costs were ordered due to the respondent's bankruptcy.

Staff of the Ontario Securities Commission alleged that the Respondents engaged in unregistered trading, illegal distribution of securities, failure to disclose commissions, and made prohibited representations using high-pressure sales tactics.

The Commission found that the Respondents acted as market intermediaries and traded in securities of Andromeda without registration, and distributed securities to non-accredited investors without a prospectus or exemption.

The Commission also found that Allen failed to disclose his 60% commission to investors.

The allegations regarding prohibited representations and high-pressure sales tactics were dismissed due to insufficient evidence.

A hearing on sanctions was ordered.

The applicant, a registered trader, sought a hearing and review of a decision by the hearing panel of Market Regulation Services Inc. (RS) finding him guilty of frontrunning contrary to Rule 4-204(1) of the Rules of the Toronto Stock Exchange.

The applicant argued he was denied procedural fairness, that the RS Panel erred in law by finding that risk and disadvantage to the client were not elements of the offence, and that the RS Panel overlooked evidence suggesting the trade was meant to facilitate a client order.

The Commission affirmed the RS Panel's decision, holding that the applicant had notice of the case to meet, that risk and disadvantage are not elements of Rule 4-204(1), and that the applicant's proposed inference was unsupported speculation.

The sanctions, including a $15,000 fine and a one-month suspension, were confirmed.

Staff of the Ontario Securities Commission alleged that the respondents, including Leslie and Douglas Brown, engaged in unregistered trading and illegal distribution of securities related to 'F.E.D.I. desks' at an investment seminar.

The Browns had invited friends to the seminar and introduced the main speaker, but did not receive compensation or act on behalf of the promoter.

The Commission found that the Browns' actions did not constitute acts in furtherance of a trade, as they were not acting to promote the sale on behalf of the seller.

The allegations against the Browns were dismissed.

The applicants brought an application under sections 104 and 127 of the Securities Act regarding an alleged issuer bid by Technovision Systems Inc. The respondents and Commission staff brought preliminary motions to stay or dismiss the application.

The Commission found that the applicant Urquhart had previously litigated the same issues in British Columbia and Ontario courts, where her claims were dismissed or stayed.

The Commission held that section 104 is intended for ongoing bids, not completed ones, and section 127 cannot be used to remedy private harm.

The application was dismissed as frivolous, vexatious, and an abuse of process against Urquhart, and permanently stayed against the other applicants, as the matter was a private dispute properly suited for civil courts.

The applicant, a group retirement plan administrator registered as a mutual fund dealer and portfolio manager, sought an exemption from the requirement to become a member of the Mutual Funds Dealers Association (MFDA).

The applicant argued its business model, which included discretionary trading, was incompatible with MFDA rules and that restructuring would be costly and confusing to clients.

The Commission denied the exemption, emphasizing that investor protection and the benefits of MFDA oversight outweighed the administrative and financial burdens of restructuring.

A temporary exemption was granted to allow the applicant time to apply for MFDA membership.

Dimethaid Research Inc. requested a hearing and review of the Director's decision objecting to the use of prospectus and registration exemptions for a proposed rights offering.

The Director objected because Dimethaid's annual financial statements did not comply with Canadian GAAP, specifically regarding the valuation of the consideration owing for the acquisition of Oxo Chemie AG.

Dimethaid argued that discounting equity was not required by Canadian GAAP and would be confusing.

The Ontario Securities Commission upheld the Director's decision, finding that the transaction was a business combination to be recorded at fair value, and that applying a proper discount to the non-interest bearing future payment obligations was the most appropriate method to determine fair value.