Securities Law

Following a merits decision finding that the respondent engaged in illegal insider trading, the Ontario Securities Commission held a hearing in writing to determine sanctions and costs.

The respondent, an experienced professional trader, had induced a legal assistant to provide material non-public information about pending corporate acquisitions, realizing a profit of $128,000.

The Commission found the misconduct to be serious, deliberate, and motivated solely by profit.

The Commission ordered a 15-year ban on the respondent's participation in the capital markets, an administrative penalty of $300,000, disgorgement of $128,000, and costs of $47,500.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondents under subsection 127(10) of the Securities Act, based on a decision by the British Columbia Securities Commission (BCSC).

The BCSC had found that the respondents engaged in unregistered trading and illegal distributions of securities, and imposed monetary and non-monetary sanctions.

The Ontario Securities Commission found that the statutory requirements for a reciprocal order were met and that it was in the public interest to protect Ontario investors by imposing substantially similar non-monetary sanctions, including trading bans and director/officer prohibitions, against both the individual respondent and the dissolved corporate respondent.

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.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order under s. 127(10) of the Securities Act against the respondent, who had entered into a settlement agreement with the British Columbia Securities Commission admitting to perpetrating a fraud on investors.

The respondent had raised $200,000 through a promissory note for a business with no revenue, and misappropriated the funds for personal use.

The Commission found it was in the public interest to issue a reciprocal order, permanently prohibiting the respondent from trading in securities or derivatives, and from acting as a director or officer of any issuer or registrant, subject to limited carve-outs for personal accounts.

The Ontario Securities Commission approved a settlement agreement between Staff and Questrade Wealth Management Inc. Questrade admitted to acting contrary to the public interest by failing to take appropriate steps to determine whether a conflict of interest existed before investing client money in WisdomTree ETFs.

The Commission ordered a reprimand, $100,000 in costs, and accepted a voluntary payment of $2.9 million, finding the settlement reasonable and 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.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondent following his criminal conviction for defrauding 41 investors of approximately $10 million in a Ponzi scheme.

The Commission found that the respondent's criminal conviction arose from a course of conduct related to securities, as the fraudulent transactions met the test for investment contracts.

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

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order under subsection 127(10) of the Securities Act against the respondents, based on a decision of the British Columbia Securities Commission.

The BCSC had found that the respondents engaged in an illegal distribution of securities and perpetrated multiple acts of fraud.

The Ontario Securities Commission found that it was in the public interest to issue an order substantially reciprocating the non-monetary sanctions imposed by the BCSC, including permanent prohibitions on trading, acquiring securities, and acting as a director or officer of any issuer or registrant.

A minority shareholder of the respondent company brought an application under s. 127 of the Securities Act seeking to block a going-private transaction structured as a plan of arrangement.

The applicant alleged the controlling shareholders improperly relied on the 90 percent exemption from minority approval requirements by engaging in a multi-step strategy to dilute minority interests.

The Commission dismissed the application for standing, finding that the applicant delayed in bringing the application, failed to establish a prima facie case of abusive conduct, and had adequate alternative remedies under the CBCA to address concerns regarding price and fairness.

Staff of the Ontario Securities Commission and the respondents entered into a settlement agreement regarding allegations of market manipulation.

During the material time, the respondents engaged in approximately 60 incidents of "spoofing" on the Montreal Exchange, using non-bona fide direct electronic access orders to manipulate the National Best Bid or Offer and trade at artificial prices, profiting by approximately $250,000.

The respondents admitted to breaching s. 126.1(1)(a) of the Securities Act.

The Commission approved the settlement agreement, finding the agreed sanctions, which included administrative penalties totaling $970,000, trading bans, and costs of $30,000, to be reasonable and in the public interest.

Staff of the Ontario Securities Commission alleged that Dennis Meharchand and Valt.X Holdings Inc. illegally distributed securities, engaged in unregistered trading, and committed fraud.

The Commission found that the respondents distributed common shares, convertible notes, and investment contracts without a prospectus or an available exemption.

The respondents also engaged in the business of trading securities without being registered.

Furthermore, Mr. Meharchand committed fraud by making false statements to investors about the use of funds and by using investor funds for improper personal purposes, including gambling.

The Commission concluded that the respondents breached the Securities Act and directed a hearing regarding sanctions and costs.

Following a merits decision finding the respondents engaged in unregistered trading, illegal distribution, and securities fraud, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission ordered permanent market bans against BFM Industries Inc. and Liquid Gold International Corp., and 15-year market bans against Andrea Lee McCarthy, with exceptions for her RRSP and RESP.

Staff's requests for disgorgement orders were dismissed because the amounts obtained were not reasonably ascertainable without risking double counting with orders previously made against other respondents.

McCarthy was ordered to pay an administrative penalty of $10,000, taking into account her cooperation, limited financial means, and lack of prior experience in the capital markets.

Following a merits decision finding that the Respondents breached the registration and prospectus requirements of the Securities Act, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission first ruled that transcripts from the merits hearing were admissible to provide evidence on sanctioning factors.

The Commission then imposed permanent cease trade orders on the corporate respondent and 10-year cease trade and director/officer bans on the individual respondents.

Administrative penalties totaling $580,000 were ordered against the individual respondents.

The Commission declined to order disgorgement due to uncertainty in calculating the amounts obtained from the illegal conduct.

Costs of $126,216.04 were awarded to Staff, discounted for unproven allegations and unaccepted evidence.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondents under s. 127(10) of the Securities Act, based on a prior order of the British Columbia Securities Commission.

The BCSC had found that the respondents engaged in unregistered trading and illegal distribution of securities.

The OSC found that it was in the public interest to protect Ontario investors and capital markets by imposing reciprocal sanctions.

The OSC ordered that the respondents cease trading in securities and be prohibited from acting as directors or officers of any issuer for a period of five years, subject to limited exceptions.

Following a merits decision finding the respondents engaged in unregistered trading and perpetrated a fraud on investors through an advance-fee scheme, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The respondents solicited U.S. investors to pay advance fees for the purported sale of shares, misappropriating $15,634.

The Commission ordered permanent market bans, a $100,000 administrative penalty, and disgorgement against the corporate respondent and its directing mind.

A 10-year market ban and $25,000 penalty were ordered against the salesperson respondent.

The respondents were also ordered to pay $49,000 in costs.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondent pursuant to subsection 127(10) of the Securities Act, based on a prior order of the Alberta Securities Commission.

The respondent did not appear or file materials in the written hearing.

The Commission found it in the public interest to issue a reciprocal order, prohibiting the respondent from trading in or acquiring any securities until June 6, 2023.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and illegal distribution of securities in relation to limited partnership units for real estate development in Saskatchewan.

The Commission found that the limited partnership units were securities (investment contracts) and that the respondents, acting as market intermediaries, traded and distributed these securities without being registered and without filing a prospectus, in breach of sections 25(1) and 53(1) of the Securities Act.

Following a merits hearing where the respondents were found to have engaged in a fraudulent boiler room scheme that raised approximately $18 million from investors, the Ontario Securities Commission held a sanctions and costs hearing.

The Commission ordered permanent market participation bans against the individual respondents.

It also ordered disgorgement of approximately $16.7 million, representing the amounts obtained by the respondents as a result of their non-compliance with Ontario securities law.

Administrative penalties totaling over $5.6 million were imposed to provide specific and general deterrence.

Finally, the Commission ordered the respondents to pay $344,500 towards the costs of the investigation and hearing.

The Ontario Securities Commission held a written hearing to consider whether to impose sanctions against the respondent under subsections 127(1) and 127(10) of the Securities Act.

The respondent had previously pleaded guilty and been convicted of three counts of fraud over $5,000 under the Criminal Code for operating an unregistered securities firm and defrauding investors of over $1.1 million.

Relying on the criminal convictions and the sentencing judge's findings, the Commission found it was in the public interest to impose permanent market bans against the respondent to protect investors and the integrity of the capital markets.

Staff of the Ontario Securities Commission brought an application for an inter-jurisdictional enforcement order under subsections 127(1) and 127(10) of the Securities Act against the respondents, who were previously sanctioned by the Alberta Securities Commission for perpetrating a Ponzi scheme and defrauding investors of approximately $52 million.

The respondents did not participate in the written hearing.

The Commission found that the respondents' conduct would have constituted a breach of Ontario securities law had it occurred in Ontario.

To protect Ontario investors and capital markets from possible future harm, the Commission exercised its public interest jurisdiction to impose permanent market conduct restrictions on the respondents, substantially identical to those imposed in Alberta.