Wendy Berman

Staff of the Ontario Securities Commission alleged that the respondents engaged in the business of trading and advising in securities without registration by operating a contract for difference (CFD) trading program.

The respondents argued that CFDs were not securities and that they merely acted as employees executing trades.

The Commission found that the CFDs were investment contracts and therefore securities.

The Commission further held that the respondents engaged in acts in furtherance of trades, exercised discretionary authority over investor accounts, and provided advice on CFD trading for a business purpose, thereby breaching the registration requirements under the Securities Act.

Allegations regarding a breach of a prior undertaking were dismissed due to the undertaking's lack of clarity.

The respondents raised approximately $170,600 from 90 investors through a fraudulent scheme involving a purported cryptocurrency mining company.

The Ontario Securities Commission found that the investments were 'securities' and that the respondents engaged in unregistered trading and illegal distribution.

The respondents made false representations about the business, use of funds, and expected returns, and misappropriated the funds for personal use.

The individual respondent also misled Staff and breached confidentiality during the investigation.

The Commission ordered permanent market bans, disgorgement of $170,600, an administrative penalty of $500,000, and costs of $100,000.

Staff of the Ontario Securities Commission alleged that Threegold Resources Inc. distributed convertible debentures without a prospectus, engaged in unregistered trading, and breached a cease trade order.

The Commission found that Threegold distributed $310,000 in debentures to 19 investors without a prospectus or applicable exemption, and did so while a cease trade order was in effect.

However, the Commission dismissed the allegation of unregistered trading, finding that the capital raising was ancillary to Threegold's mineral exploration business and did not cross the line into the business of trading.

The Commission imposed permanent trading and acquisition bans against Threegold.

The applicant, a registered investment advisor, sought a stay of a Commission decision dismissing his application for a review of two IIROC decisions, pending his appeal to the Divisional Court.

The Commission declined to grant a stay pending the disposition of the appeal, noting that the Divisional Court is better placed to assess the merits of the appeal and control the appeal process.

However, the Commission granted a temporary 60-day stay, subject to strict supervision conditions, to allow the applicant to bring a stay motion before the Divisional Court.

Staff of the Ontario Securities Commission and the respondent entered into a settlement agreement regarding allegations that the respondent engaged in the business of trading and advising in securities and acted as an investment fund manager without registration.

The respondent raised approximately $25 million from investors over a 10-year period through a limited partnership.

The respondent had reasonably relied in good faith on legal advice that registration was not required.

The Commission approved the settlement agreement, which included a voluntary payment of $1,600,000, costs of $100,000, and an undertaking not to apply for registration for one year, finding it to be in the public interest.

The applicant sought a hearing and review of IIROC merits and sanctions decisions which found he inappropriately altered signed client documents and suspended his registration for 12 months.

The applicant argued the IIROC Panel erred by admitting unalleged misconduct, reversing the onus of proof, making improper inferences from circumstantial evidence, and imposing excessive sanctions.

The Ontario Securities Commission dismissed the application, finding the IIROC Panel's decisions were reasonable, applied the correct onus of proof, and appropriately relied on both direct and circumstantial evidence.

Staff of the Ontario Securities Commission and David Cartu sought approval of a settlement agreement regarding allegations that Cartu permitted two corporate entities to facilitate the sale of binary options to Ontario investors without registration.

Cartu admitted to the breaches and agreed to pay a $300,000 administrative penalty, $15,000 in costs, and to be subject to a seven-year market ban.

The Commission approved the settlement, finding it fell within a range of reasonable outcomes and was in the public interest.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondent under s. 127(10) of the Securities Act.

The respondent had previously pled guilty and been convicted of criminal fraud over $5000 for operating a Ponzi scheme that defrauded investors of approximately $1.1 million.

The Commission found that the criminal conviction arose from a course of conduct related to securities.

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

ESW Capital, LLC applied for exemptive relief from the minimum tender requirement under the Securities Act in connection with its proposed take-over bid for Optiva Inc. The proposed bid was opposed by two other control block shareholders, Maple Rock and EdgePoint, who announced they would not tender their shares.

ESW sought to exclude their shares from the minimum tender calculation.

The Ontario Securities Commission dismissed the application, finding no exceptional circumstances or abusive conduct by the target, bidder, or control block shareholders that would warrant altering the recalibrated bid regime and undermining minority shareholder choice.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondent under s. 127(10) of the Securities Act, based on a decision of the Alberta Securities Commission.

The ASC had found that the respondent engaged in unregistered trading, made misrepresentations, and perpetrated a fraud on investors, raising approximately $15.5 million.

The Commission found that the precondition for an order was met and that it was in the public interest to permanently prohibit the respondent from participating in Ontario's capital markets to protect investors and the integrity of the markets.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondent following his conviction for securities fraud in the United States.

The respondent had pled guilty to participating in pump and dump schemes that caused significant fraud losses.

The Commission found that the US conviction arose from a course of conduct related to securities and that the respondent's egregious misconduct warranted a permanent ban from participating in Ontario's capital markets to protect investors.

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.

The applicant, a registered representative, sought a stay of two IIROC decisions that suspended his registration for 12 months for inappropriately altering client documents.

The Commission applied the three-part RJR-MacDonald test and granted the stay pending the disposition of his application for hearing and review.

The Commission found that the review application raised serious issues, the applicant would suffer irreparable financial and reputational harm without a stay, and the balance of convenience favoured a stay given the low risk of client harm and the imposition of close supervision conditions.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondent under s. 127(10) of the Securities Act.

The respondent had previously pled guilty in the United States to conspiracy to commit fraud in relation to a resort development scheme that raised approximately US$91.3 million from investors.

The Commission found that the respondent's conviction arose from a course of conduct related to securities.

Finding that the respondent's misconduct was extremely serious and caused significant harm to investors, the Commission concluded it was in the public interest to issue the requested protective order.

The respondent was permanently prohibited from trading in securities, acting as a director or officer, and acting as a registrant or promoter, subject to limited carve-outs for trading in personal registered accounts.