Carlo Rossi

The Receiver brought a motion to extend the appointment of limited partner advisory committees, approve its activities, and approve a process for appointing Representative Counsel for the Unitholders.

The Ad Hoc Committee of Retail Investors raised concerns about the independence of the proposed appointment process.

The court approved the Receiver's activities and the extension of the committees, but modified the Representative Counsel appointment process to include an independent third party to evaluate proposals and make a recommendation to the court.

In the receivership proceedings of Bridging Finance Inc. and related entities, the Receiver brought a motion seeking approval of a Key Employee Retention Plan (KERP), a tolling order for limitation periods, a sealing order for confidential appendices, and the formation of Limited Partner Advisory Committees (LPACs).

An Ad Hoc Group of Retail Investors brought a cross-motion seeking the appointment of Representative Counsel.

The court granted the Receiver's requests, finding the KERP necessary, the sealing order justified under the Sherman Estate test, and the LPACs appropriate for providing input during the strategic review.

The court time-limited the LPACs to 60 days and dismissed the motion for Representative Counsel with leave to reassess in 60 days, prioritizing the portfolio review before addressing allocation issues.

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 and the respondents sought approval of a settlement agreement concerning allegations of unregistered trading.

The respondents admitted that Moskowitz Capital Management Inc. distributed preferred shares in mortgage investment entities without being registered as a dealer, contrary to s. 25(1) of the Securities Act.

The Commission approved the settlement, noting the respondents' substantial cooperation, self-reporting, and remedial steps.

The settlement included a $350,000 administrative penalty, $25,000 in costs, and an undertaking to retain an exempt market dealer to complete a know-your-client and suitability review.

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.

The appellants, former senior executives of Sino-Forest Corporation, appealed the Ontario Securities Commission's decisions finding they engaged in a massive securities fraud and imposing significant sanctions, including disgorgement and administrative penalties.

The appellants argued the Commission failed to account for Chinese business and cultural practices (guanxi) when determining their intent to defraud, alleged a reasonable apprehension of bias by the panel chair, and challenged the sanctions as excessive.

The Divisional Court dismissed the appeal, holding that Ontario securities law overrides cultural practices for reporting issuers, the bias claim was unfounded, and the sanctions were reasonable given the enormity of the fraud and the need for deterrence.

The appellants, former executives of Sino-Forest Corporation, appealed the Ontario Securities Commission's decisions finding they engaged in a massive securities fraud and imposing significant sanctions, including over $11 million in administrative penalties and $64 million in disgorgement.

The appellants argued the Commission failed to properly consider Chinese business and cultural practices (guanxi) when assessing their intent to commit fraud, alleged a reasonable apprehension of bias by the hearing chair, and challenged the sanctions as excessive.

The Divisional Court dismissed the appeal, finding the Commission reasonably concluded that Ontario securities law overrides cultural explanations for illegal conduct, there was no reasonable apprehension of bias, and the sanctions were proportionate to the enormity of the fraud.

Staff of the Ontario Securities Commission alleged that NextBlock Global Limited and its CEO, Alex Tapscott, made misleading statements in slide deck presentations used to solicit investments in a private placement.

The respondents admitted that the slide decks constituted offering memoranda and falsely represented that certain prominent individuals were advisors to NextBlock.

The Commission approved a settlement agreement wherein NextBlock agreed to pay a $700,000 administrative penalty and $100,000 in costs, and Tapscott agreed to pay a $300,000 administrative penalty, publish an open letter, and deliver ethics presentations to business students.

The Commission found the settlement to be in the public interest, noting mitigating factors including the return of investments with profit, cooperation with Staff, and Tapscott's lack of prior disciplinary record.

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.

The Ontario Securities Commission (OSC) brought a motion for security for costs against the appellants, who were appealing a merits and sanctions decision that found they orchestrated a massive fraud at Sino-Forest Corporation.

The OSC sought $100,000 in security, arguing the appeal was frivolous and vexatious and the appellants lacked assets in Ontario.

The Divisional Court found that while the appeal did not appear vexatious, the grounds of appeal appeared frivolous.

Furthermore, the court found 'other good reason' to order security under Rule 61.06(1)(c) due to the strong findings of fraud and evidence that the appellants had put assets out of reach.

Applying a holistic approach, the court concluded it was just to order the appellants to post $100,000 as security for costs.

Following a merits decision finding that the respondents perpetrated a massive corporate fraud involving standing timber assets and related party transactions, the Ontario Securities Commission held a sanctions and costs hearing.

The Commission imposed permanent market participation bans on the individual respondents.

It also ordered administrative penalties totaling over $11.6 million and disgorgement of over $64.6 million, representing salaries, bonuses, and proceeds obtained through the fraudulent conduct.

The respondents were also ordered to pay over $5 million in costs.

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.

During the 117th day of a protracted hearing on the merits, four respondents brought a motion requesting permission to file written witness statements in lieu of oral examinations-in-chief for their remaining witnesses.

The respondents argued this was necessary to ensure the hearing concluded by the scheduled deadline and to prevent the exhaustion of their funding, relying on the Supreme Court's direction in Hryniak regarding proportionality and access to justice.

Staff opposed the motion, arguing that credibility was at issue and written statements would provide a 'varnished version' of the facts.

The Panel granted the motion, finding that the slight prejudice to Staff in not observing the witnesses during examination-in-chief was outweighed by the necessity to complete the hearing efficiently and the significant costs already incurred by all parties.

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 brought allegations against Blackwood & Rose Inc., Steven Zetchus, and Justin Kreller for unregistered trading and securities fraud.

The respondents solicited U.S. residents to send funds purportedly to facilitate the sale of their shares in Gigapix Studios, Inc., but misappropriated the funds for personal use.

The Commission found that the respondents engaged in the business of trading in securities without registration and perpetrated a fraud on investors.

Zetchus, as the sole director and directing mind of Blackwood, was deemed to have also failed to comply with Ontario securities law.

Following a merits hearing where the respondents were found to have engaged in unregistered trading, illegal distribution of securities, and fraud, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission ordered permanent market bans, significant administrative penalties, and disgorgement against the directing minds of the fraudulent scheme.

The salesperson respondents received market bans ranging from 5 to 10 years, along with administrative penalties and disgorgement orders equal to the commissions they earned.

Costs were also apportioned among the respondents.

Staff of the Ontario Securities Commission brought proceedings against the respondents for operating fraudulent advance-fee schemes.

The respondents solicited investors to pay upfront fees for the purported exchange or sale of virtually worthless shares, but the transactions never occurred and investors suffered complete losses.

The Commission found that the respondents engaged in the business of trading in securities without registration, contrary to s. 25(1) of the Securities Act, and perpetrated a fraud on investors, contrary to s. 126.1(b).

The Commission ordered permanent trading and acquisition bans against the corporate respondents and ordered disgorgement of the funds obtained through the fraudulent schemes.

The appellants appealed a decision of the Ontario Securities Commission, arguing that the Commission unreasonably inferred that the appellant had knowledge of a proposed acquisition based on circumstantial evidence.

The Divisional Court dismissed the appeal, finding that the Commission's detailed findings of fact provided clear, convincing, and cogent evidence to support the inference of knowledge.

The standard of review was agreed to be reasonableness, and the court found the Commission's inference to be reasonable and compelling.

Staff of the Ontario Securities Commission alleged that the respondents engaged in a fraudulent advance fee scheme targeting UK residents, involving artificial offers to purchase shares at inflated prices and requiring advance fees.

The Commission found that David Pelcowitz and IMG International Inc. committed fraud and traded in securities without registration.

However, the Commission declined to make findings against Michael Smith and Nest Acquisitions and Mergers, concluding that they were fictitious entities or aliases used by unknown persons, and that it is contrary to the public interest to make findings against persons unknown to the Commission.