Russell Juriansz

Katanga Mining Limited applied under section 17 of the Securities Act for permission to disclose confidential documents obtained during an Ontario Securities Commission investigation to its parent company, Glencore plc, for use in civil proceedings in the United Kingdom.

The Capital Markets Tribunal dismissed the application, finding that Katanga did not establish that the disclosure was in the public interest.

The Tribunal held that disclosure of information protected by section 16 for use in private civil proceedings is generally not in the public interest, and a foreign court order requiring production cannot alone satisfy the statutory public interest analysis.

The applicants applied to vary an enforcement order made against them by the Capital Markets Tribunal, seeking to remove financial sanctions including a $13.5 million disgorgement order, a $600,000 administrative penalty, and a $166,000 cost award.

They argued that the sanctions prevented them from securing financing to renovate and reopen the Buffalo Grand Hotel, which was the only way investors could recover their funds.

The Tribunal dismissed the application, finding that the applicants' financing plan was speculative, incomplete, and subject to numerous uncertainties.

The Tribunal concluded that the applicants failed to demonstrate a material change in circumstances or that removing the sanctions would not be prejudicial to the public interest, noting that doing so would undermine specific and general deterrence.

Following a merits decision finding the respondents perpetrated securities fraud and made materially misleading statements regarding a share purchase transaction, the Capital Markets Tribunal determined the appropriate sanctions.

The Tribunal imposed permanent market participation and director/officer bans on TeknoScan, Kung, and Tam, and 20-year bans on Hyams.

Administrative penalties were ordered in the amounts of $150,000 against TeknoScan, $450,000 against Kung, $350,000 against Tam, and $250,000 against Hyams.

The respondents were also ordered to pay $400,000 in costs.

The Tribunal emphasized the need for specific and general deterrence, noting the serious nature of the fraud which deprived investors of fundamental information, while distinguishing between the respondents based on their culpability and acceptance of responsibility.

At a first case management hearing in an enforcement proceeding, the Capital Markets Tribunal declined to adopt the longer timetable proposed by the Ontario Securities Commission.

Emphasizing the statutory and procedural directives to ensure expeditious proceedings, the adjudicator largely accepted the respondents' proposed schedule and ordered the parties to provide availability for a merits hearing in 2026.

The Capital Markets Tribunal issued its sanctions and costs decision against the respondents following findings of fraud and obstruction of the Commission's investigation.

The Tribunal ordered significant administrative penalties, disgorgement, and permanent market bans against the senior officers for their roles in orchestrating and participating in multiple frauds that diverted over $100 million in investor funds.

The chief compliance officer, who acted under direction and cooperated with the investigation, received a lesser administrative penalty and a 10-year market ban.

The respondents were also ordered to pay a portion of the Commission's costs.

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 alleged that the respondents violated Multilateral Instrument 91-102 by offering binary options to Ontario residents through an online trading platform, Polymarket.

The parties reached a settlement agreement wherein the respondents agreed to pay a voluntary payment of $22,966.75 USD, an administrative penalty of $200,000 CAD, and investigation costs of $25,000 CAD, along with market bans and an undertaking to restrict Ontario access.

The Capital Markets Tribunal approved the settlement, finding it reasonable and in the public interest.

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.

Katanga Mining Limited applied under s. 17(1) of the Securities Act to disclose confidential documents from an Ontario Securities Commission investigation to the internal and external counsel of its parent company, Glencore.

Glencore is a defendant in a UK civil claim and the UK Court ordered disclosure of these documents.

The Capital Markets Tribunal granted the application, finding it in the public interest to permit narrow disclosure to Glencore's counsel for the purpose of assessing relevance to the UK claim, provided the counsel sign undertakings to be bound by the confidentiality provisions of s. 16 of the Act.

The Ontario Securities Commission alleged that Phemex Limited and Phemex Technology Pte.

Ltd. operated an online crypto asset trading platform that sold securities to Ontario investors without being registered and without filing a prospectus.

The Capital Markets Tribunal found that the Crypto Contracts and Crypto Futures offered on the platform were investment contracts and therefore securities.

The Tribunal concluded that the respondents breached sections 25(1) and 53(1) of the Securities Act by engaging in the business of unregistered trading and distributing securities without a prospectus.

A case management hearing was directed to prepare for a sanctions and costs hearing.

The Ontario Securities Commission alleged that Bridging Finance Inc. and its principals, David and Natasha Sharpe, along with Chief Compliance Officer Andrew Mushore, engaged in multiple frauds and conflicts of interest involving the misappropriation of investor funds.

The Capital Markets Tribunal found that David and Natasha Sharpe perpetrated frauds relating to loans to entities associated with Sean McCoshen, Ninepoint Partners LP, and Gary Ng, diverting millions of dollars for their personal benefit and to facilitate the purchase of Bridging shares.

The Tribunal also found that Mushore participated in the Ninepoint fraud.

Furthermore, the Tribunal concluded that the respondents obstructed the Commission's investigation by making false statements, creating false paper trails, intimidating witnesses, and permitting surreptitious monitoring of a compelled interview.

Bridging was found to have failed to address conflicts of interest, for which the Sharpes were deemed liable as directing minds.

The moving party, a respondent in a Capital Markets Tribunal proceeding, sought an adjournment of the closing submissions timetable due to her inability to pay outstanding legal fees resulting from a receivership asset freeze.

Her counsel alternatively sought to be removed from the record for non-payment of fees.

The Tribunal dismissed both motions.

The Tribunal found that the moving party's delay in addressing the fee issue did not constitute exceptional circumstances warranting an adjournment.

Furthermore, the Tribunal refused to remove counsel from the record, concluding that doing so at the final stage of a lengthy merits hearing would cause significant disruption and harm the administration of justice.

The Canadian Investment Regulatory Organization (CIRO) brought confidential applications for authorization under s. 17 of the Securities Act to disclose information obtained pursuant to s. 11 investigation orders.

CIRO intended to use the compelled banking records in a regulatory proceeding against a registrant, both to make required disclosure and as evidence.

The Capital Markets Tribunal dismissed the applications, finding that under s. 16(2) of the Act, CIRO does not require a s. 17 order to use the compelled documents for its own regulatory purposes in its own proceeding.

Following a finding that the respondents perpetrated a securities fraud by misapplying $10 million in investor funds raised for a real estate project, the Capital Markets Tribunal determined the appropriate sanctions.

The Tribunal ordered permanent market participation bans with a limited trading carve-out for the individual respondent, disgorgement of $7.63 million, administrative penalties of $500,000 per respondent, and costs of $206,769.34.

The respondent, Silvio Serrano, brought a motion seeking disclosure of unredacted transcripts of compelled interviews and an unredacted confidentiality order, or in the alternative, a stay of the enforcement proceeding against him.

The Capital Markets Tribunal found that the redacted information met the test for disclosure and was necessary for Serrano to make full answer and defence.

However, an existing confidentiality order prevented Staff from disclosing the information, and the Tribunal declined to vary or vacate that order.

Concluding that proceeding without the disclosure would cause actual prejudice and constitute an abuse of process, the Tribunal granted a stay of the proceeding against Serrano.

Staff of the Ontario Securities Commission alleged that Royal Bank of Canada failed to properly account for costs incurred for internally developed software, in breach of the books and records requirements under s. 19(1) of the Securities Act.

The parties entered into a no-contest settlement agreement wherein Royal Bank agreed to make a voluntary payment of $2,000,000 to the OSC, alongside payments to other regulators.

The Capital Markets Tribunal approved the settlement, finding it fell within a range of reasonable outcomes and was in the public interest, noting Royal Bank's prompt cooperation and proactive corrective measures.

Staff of the Ontario Securities Commission brought a motion to summarily dismiss the respondent's motion to stay the enforcement proceeding for abuse of process.

The respondent alleged that Staff failed to adequately protect privileged documents obtained during a related criminal investigation.

The Tribunal held that the applicable standard for summary dismissal of a stay motion is the 'tenable case' standard, and that the Supreme Court's decision in Haevischer does not apply outside the criminal context.

The Tribunal found that Staff failed to establish that the respondent's motion had no reasonable prospect of success, as the alleged breach of privilege could potentially undermine the integrity of the justice system even if it did not compromise the fairness of the hearing.

Staff's motion was dismissed.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading, illegal distribution of securities, and made false or misleading statements in connection with raising funds for a hotel redevelopment project.

The Capital Markets Tribunal found that the respondents distributed securities without a prospectus and breached a temporary cease trade order.

However, the Tribunal dismissed the allegations of unregistered trading, finding that the capital raising was ancillary to the underlying hotel business, and dismissed the allegations of false statements because no trading relationship existed.

The Tribunal also found the respondents engaged its public interest jurisdiction by failing to segregate funds and maintain accurate records.

The respondents, David and Natasha Sharpe, brought motions to stay the enforcement proceeding against them, alleging abuse of process.

They argued that the Ontario Securities Commission improperly filed their compelled testimony in a court application for a receiver without obtaining a section 17 order under the Securities Act, thereby prejudicing their right to a fair hearing and bringing the administration of justice into disrepute.

The Capital Markets Tribunal dismissed the motions, finding that the public availability of the compelled evidence did not prejudice their right to a fair hearing, as any potential witness tainting could be addressed through cross-examination.

Furthermore, the Tribunal concluded that the Commission's conduct, while based on a mistaken interpretation of the law, was not in bad faith and did not constitute the rare and exceptional circumstances required to justify a stay of proceedings.

The applicants, David and Natasha Sharpe, sought to vary an earlier Tribunal decision that denied their request for disclosure in support of their pending motions to stay the proceeding for abuse of process.

They argued that the Supreme Court of Canada's recent decision in R v Haevischer, which established a 'manifestly frivolous' standard for summary dismissal of stay applications in criminal cases, changed the applicable law.

The Tribunal dismissed the application, finding that Haevischer applies specifically to criminal cases and summary dismissals of stay applications, not to disclosure requests in administrative proceedings where the onus lies on the party seeking disclosure.