Sandra Blake

The Ontario Securities Commission brought a pre-hearing motion to exclude the proposed expert opinion evidence of three witnesses tendered by the respondents, Emerge Canada Inc. and Lisa Langley.

The Tribunal granted the motion in part, ruling that proposed evidence regarding valuation methodologies, NAV calculation, and the scope of audits was inadmissible because those issues were not raised in the Application for Enforcement Proceeding.

However, the Tribunal dismissed the motion regarding proposed evidence on governance, oversight, and internal controls, finding it premature to exclude such evidence before the merits hearing, and deferred the determination of its admissibility and the experts' qualifications.

The Capital Markets Tribunal heard three procedural motions ahead of a scheduled merits hearing.

The respondents Emerge Canada Inc. and Lisa Langley sought an adjournment to retain counsel, which the Tribunal dismissed for failing to demonstrate exceptional circumstances.

The Tribunal granted the Ontario Securities Commission's motion requiring Emerge and Langley to provide further and better witness summaries.

Finally, the Tribunal dismissed the Commission's motion to pre-emptively exclude the anticipated factual testimony of a witness, finding it premature, but ordered the respondents to provide a more detailed summary of his expected evidence.

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 Ontario Securities Commission brought an enforcement proceeding against the respondent, alleging he perpetrated a fraud and made misleading statements contrary to the Securities Act by drafting press releases for a public company that contained false information.

The Capital Markets Tribunal dismissed the application, finding that while the press releases were misleading, they were issued by the corporation, not the respondent.

The Tribunal held that drafting corporate communications does not constitute making a statement to the investing public under s. 126.2(1), nor does it constitute perpetrating a fraud on the public under s. 126.1(1)(b), absent evidence that the respondent caused or duped the corporation into issuing them.

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 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.

Following a merits decision finding the respondents engaged in a massive crypto asset fraud involving the sale of tokens falsely represented as backed by gold, the Capital Markets Tribunal held a sanctions hearing.

The Tribunal ordered permanent market participation bans, administrative penalties totaling $4.5 million, and disgorgement of over US $51 million in misappropriated investor funds.

The Tribunal declined to order disgorgement of profits from real estate sales due to a lack of causal link.

Costs of $667,605.27 were awarded to the Commission.

The Ontario Securities Commission sought sanctions against Nova Tech Ltd and its founder following a merits decision finding they engaged in unregistered trading, illegal distribution of securities, and breached a temporary cease trade order.

The respondents solicited Ontario investors for foreign exchange and crypto asset trading without registration or a prospectus, and evaded a Tribunal order by instructing investors on how to bypass jurisdictional restrictions.

The Capital Markets Tribunal ordered permanent market participation and director/officer bans, a $2.5 million administrative penalty, $31,000 in disgorgement, and $193,333.52 in costs, citing the egregious nature of the misconduct and the need for specific and general deterrence.

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 Ontario Securities Commission alleged that Nova Tech Ltd and its principal, Cynthia Petion, breached the Securities Act by engaging in unregistered trading and illegal distribution of securities through their PAMM product, which purported to offer passive returns from forex and crypto trading.

The Capital Markets Tribunal found that the PAMM product was an investment contract and therefore a security.

The Tribunal concluded that Nova Tech breached the registration and prospectus requirements of the Act, and also breached a temporary cease trade order by continuing to accept investments.

Petion, as sole director and CEO, was found to have authorized these breaches.

The Ontario Securities Commission sought sanctions and costs against Michael Paul Kraft and Michael Brian Stein following a merits decision that found Kraft engaged in illegal tipping and Stein in insider trading.

The Capital Markets Tribunal ordered market participation bans, administrative penalties, disgorgement, and costs against both respondents.

Kraft was ordered to pay a $200,000 administrative penalty and $150,000 in costs, and was subject to four-year director and officer bans and three-year trading bans.

Stein was ordered to pay a $150,000 administrative penalty, disgorge $29,345, and pay $50,000 in costs, and was subject to three-year director and officer bans and four-year trading bans.

The Tribunal also addressed a preliminary issue regarding the confidentiality of Stein's medical records.

The Ontario Securities Commission alleged that the respondents engaged in unregistered trading, illegal distribution, and fraud in relation to the sale of crypto tokens (Unity Ingot and Dignity tokens).

The Capital Markets Tribunal found that the sale of the tokens constituted investment contracts and therefore securities.

The Tribunal concluded that the respondents acted fraudulently by falsely representing that the tokens were backed by gold and by misappropriating investor funds for personal and unrelated corporate use.

The Tribunal also found that the respondents engaged in the business of trading securities without registration and distributed securities without a prospectus.

Hogg was deemed liable for the breaches of Arbitrade Bermuda.

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 applicant sought a review of sanctions imposed by the Canadian Investment Regulatory Organization (CIRO) after the Capital Markets Tribunal previously set aside one finding of misappropriation.

The applicant sought to introduce new affidavit evidence regarding his ability to pay and the remaining misappropriation finding.

The Tribunal declined to admit the new evidence, finding it was not new or compelling and amounted to an inappropriate collateral challenge.

The Tribunal reduced the fine for misappropriation from $50,000 to $40,000 to reflect the set-aside finding, but upheld the remaining sanctions, including a permanent ban and $25,000 in costs, noting the severity of the remaining misconduct.

The applicant sought a review of a decision by the Canadian Investment Regulatory Organization (CIRO) finding that he breached CIRO rules and imposing a registration ban, a $50,000 fine, and $10,000 in costs.

The applicant argued that the CIRO Panel denied him procedural fairness by refusing to admit his treating psychiatrist's medical opinion, denying his motion for an indefinite adjournment, and demonstrating bias.

The Capital Markets Tribunal dismissed the application, finding that the CIRO Panel did not err in law.

The Tribunal held that the psychiatrist's evidence was properly excluded as partisan advocacy, the applicant was fit to participate in the hearing, and there was no reasonable apprehension of bias.

The Tribunal also upheld the CIRO Panel's findings on the merits and the sanctions imposed.

Following a merits decision finding that the respondents illegally distributed securities and breached a temporary cease trade order in relation to a hotel development project, the Capital Markets Tribunal held a sanctions and costs hearing.

The Tribunal ordered permanent market bans against the respondents, with a limited carve-out allowing the individual respondent to remain a director and officer of his registered real estate brokerage.

The Tribunal also ordered the respondents to jointly and severally pay an administrative penalty of $600,000, disgorge $13.177 million and US$364,000, and pay $166,000 in costs.

The moving party requested that the Tribunal reconsider its prior reasons and order to redact additional personal medical information, arguing that the redactions were inconsistent.

Staff opposed the request, arguing that the Tribunal lacked the authority to reconsider its decision via a letter request.

The Tribunal agreed with Staff, finding that it did not have the authority to reconsider its decision.

However, pursuant to section 21.1 of the Statutory Powers Procedure Act, the Tribunal corrected a typographical error regarding the spelling of the moving party's primary care physician.

Oscar Furtado brought a motion to adjourn the merits hearing on medical and disclosure grounds, to compel further disclosure from Staff, and to keep parts of the hearing and record confidential.

The Tribunal dismissed the adjournment request, finding the medical evidence insufficient to establish exceptional circumstances and no delay in disclosure warranting an adjournment.

The Tribunal also dismissed the disclosure request, finding Staff met its obligations.

The Tribunal granted the confidentiality request in part, ordering redactions of specific medical details and certain exhibits to balance the open court principle with Furtado's privacy interests.

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.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondent following his criminal conviction for defrauding investors of over $23 million through a mortgage investment corporation and a limited partnership.

The Capital Markets Tribunal found that the criminal convictions arose from a course of conduct related to securities, as the arrangements constituted investment contracts.

Given the egregious nature of the fraud, the duration of the misconduct, and the need to protect investors, the Tribunal concluded it was in the public interest to permanently prohibit the respondent from participating in Ontario's capital markets.