Alvin Qian

Katanga Mining Limited applied to vary a 2018 settlement order requiring an external review of its accounting practices, which was substantially complete but delayed by the pandemic.

Staff of the Commission consented to the variation.

The Commission waived service on the individual respondents, dismissed a former investor's request for intervenor status, and granted the variation, allowing the review to conclude on terms acceptable to Katanga and the consultant.

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 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.

The Ontario Securities Commission approved a settlement agreement with Coinsquare Ltd. and its executives regarding market manipulation and whistleblower reprisal.

Coinsquare admitted to inflating trading volumes on its crypto asset platform through wash trades and taking reprisals against an internal whistleblower.

The settlement included significant administrative penalties, bans on the executives acting as directors or officers, and requirements for corporate governance improvements.

Staff of the Ontario Securities Commission alleged that Kuber Mortgage Investment Corporation and Sutharsan Kunaratnam engaged in unregistered trading by selling approximately $26 million worth of preferred shares to 200 investors without an available exemption.

The parties entered into a settlement agreement, which included a $400,000 administrative penalty, $30,000 in costs, a reprimand, and undertakings to remediate the conduct.

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

The Applicants sought a hearing and review of a decision by the Director of the Ontario Securities Commission refusing to issue a receipt for The Bitcoin Fund's prospectus.

The Director had refused the receipt on the grounds that bitcoin is an illiquid asset under NI 81-102 and that issuing the receipt was not in the public interest due to concerns about valuation, safeguarding of assets, and auditability.

The Commission set aside the Director's decision, finding that Staff failed to prove bitcoin is an illiquid asset given the evidence of substantial trading volumes on regulated exchanges.

The Commission also found that the Applicants had taken reasonable steps to mitigate operational risks through the fund's static buy-and-hold structure, the use of a regulated index for valuation, and the engagement of professional custodians and auditors.

The Director was ordered to issue a receipt for the prospectus.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order under subsection 127(10) of the Securities Act against the respondents, who had previously entered into a settlement agreement with the Alberta Securities Commission for unregistered trading and illegal distribution.

The respondents consented to the requested order.

The Commission granted the order, imposing reciprocal market prohibitions and trading bans in Ontario until August 17, 2023.

Staff of the Ontario Securities Commission alleged that a reporting issuer and seven of its former officers and directors contravened Ontario securities law by making materially misleading disclosures regarding copper production and financial performance, failing to maintain adequate internal controls, and providing inadequate risk disclosure.

The respondents admitted to the contraventions and to conduct contrary to the public interest.

The Commission approved a settlement agreement requiring the corporate respondent to make a $28.5 million voluntary payment and pay $1.5 million in costs, while the individual respondents agreed to pay administrative penalties ranging from $350,000 to $2.45 million, pay $50,000 each in costs, and be subject to director and officer bans.

The Commission found the settlement fell within a range of reasonable outcomes and was in the public interest.

Following a merits decision finding that the respondent engaged in unregistered trading and advising, the Commission held a written hearing to determine sanctions and costs.

The respondent had placed over 440 discretionary trades in a senior retiree's locked-in retirement account, resulting in a loss of over $56,000.

The Commission ordered 10-year market bans, a 15-year ban on acting as a registrant, investment fund manager or promoter, and a $100,000 administrative penalty.

The Commission also ordered the respondent to pay costs of $35,871.51.

The market bans included an exception for the respondent's own RRSP and RRIF accounts, but only after the administrative penalty and costs are paid in full.

The Ontario Securities Commission held a hearing in writing to determine whether the respondent, a former registrant permanently prohibited from conducting securities-related business, engaged in unregistered trading and advising.

The respondent had unfettered access to a former client's locked-in retirement account and executed over 440 discretionary trades, resulting in significant losses.

The Commission found that the respondent's conduct satisfied the business purpose test and constituted unregistered trading and advising contrary to subsections 25(1) and 25(3) of the Securities Act.

The respondent was found to have acted contrary to the public interest.

At a first attendance, the respondent did not appear but had emailed requesting the removal of his previous name from the Statement of Allegations due to offensive historical connotations.

The panel treated the email as a motion to amend the pleadings.

Staff opposed complete removal but proposed amending the Statement to reflect it as a 'previous' name rather than an alias, noting the respondent was formerly registered under that name.

The panel agreed with Staff's approach, finding it in the public interest for the public record to show when a former registrant used multiple names, and ordered the Statement of Allegations amended accordingly.

The applicant, a registered representative, sought a review of an IIROC decision finding he facilitated off-book share purchases for two clients without his firm's knowledge and approval.

The central issue was whether the purchasers were 'clients' at the time of the transactions.

The Commission applied a contextual approach, finding that the applicant gave investment advice, directed the transaction through his firm, and the purchasers reasonably believed they were clients.

The Commission concluded the IIROC panel correctly found a client relationship existed and dismissed the application for review.

Katanga Mining Limited applied for an order under section 17 of the Securities Act authorizing the disclosure of a confidential summons to individuals at four audit firms to assist with a review of past accounting practices.

The Commission granted the request with respect to Katanga's current auditor, finding minimal risk to the ongoing investigation.

However, the Commission denied the request to disclose the summons to the other three audit firms, finding that the potential risk to the investigation outweighed the purported need for disclosure, and instead authorized the disclosure of a letter from Staff confirming the investigation.

The Commission also ordered that its decision remain confidential for a limited period to protect the integrity of the investigation, subject to future publication.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondent based on a British Columbia Securities Commission (BCSC) order.

The respondent had obtained leave to appeal the BCSC decisions and a stay of execution of the sanctions from the British Columbia Court of Appeal.

Staff requested an adjournment pending the outcome of the appeal.

The Commission granted the adjournment sine die, noting that because of the stay of execution, the BCSC order was not currently operative, and an order in Ontario would impose restrictions to which the respondent was not currently subject in British Columbia.