Derek James Ferris

Katanga Mining Limited applied under s. 17(1) of the Securities Act to disclose confidential documents from an Ontario Securities Commission investigation to the internal and external counsel of its parent company, Glencore.

Glencore is a defendant in a UK civil claim and the UK Court ordered disclosure of these documents.

The Capital Markets Tribunal granted the application, finding it in the public interest to permit narrow disclosure to Glencore's counsel for the purpose of assessing relevance to the UK claim, provided the counsel sign undertakings to be bound by the confidentiality provisions of s. 16 of the Act.

The applicant's employer was investigated by the Ontario Securities Commission.

The applicant was summoned to give evidence but refused to answer questions about their employment, citing a confidentiality clause in their employment agreement.

The applicant applied for directions and a declaration that the information was privileged.

The Commission cross-applied for declarations that the applicant must answer the questions.

The court dismissed the application and allowed the cross-application, finding that the information did not meet the Wigmore criteria for case-by-case privilege and that the applicant was required to attend the examination and answer all relevant questions, subject only to valid claims of privilege.

The appellants appealed the Ontario Securities Commission's findings that they engaged in fraudulent conduct in connection with three distributions of securities and the resulting sanctions.

The Divisional Court applied the appellate standard of review from Vavilov, finding no palpable and overriding errors of fact, no errors of mixed fact and law, and no denial of procedural fairness.

The Commission's reasons were adequate and the sanctions, including permanent bans, administrative penalties, and disgorgement orders, were reasonable and supported by the evidence.

The appeal was dismissed.

During a merits hearing, the Chair of the Panel was announced as the incoming Acting Chair and CEO of the Ontario Securities Commission.

The Panel raised the issue of whether this created a reasonable apprehension of bias, given the Chair's future management responsibilities over Staff.

After receiving submissions, the Panel concluded that a reasonable and informed person might perceive a bias in favour of Staff.

The Chair recused himself from the remainder of the merits hearing and a pending disclosure motion, and the hearing proceeded with the remaining two Panel members.

The respondent brought a motion to halt a section 127 enforcement proceeding, alleging that the Ontario Securities Commission lacked jurisdiction due to institutional bias.

The respondent argued that the Commission's overlapping functions as policy-makers, adjudicators, and board members, particularly regarding the allocation of funds received from a prior settlement agreement, created a reasonable apprehension of bias.

The Commission dismissed the motion, finding that the overlapping functions were statutorily authorized by the Securities Act and did not go beyond what was permitted.

The Commission also found no evidence to overcome the presumption of impartiality or to justify interfering with Staff's discretion in choosing the venue for enforcement.

Staff of the Commission and Caldwell Investment Management Ltd. (CIM) jointly submitted a settlement agreement for approval.

CIM admitted to failing to meet its best execution obligations over a four-year period by directing trades to a related firm, resulting in higher commission rates and bond spreads for its clients.

CIM also admitted to making misleading statements, having inadequate policies, and providing insufficient information to its Independent Review Committees.

The Commission approved the settlement, which included an administrative penalty of $1.8 million, costs of $250,000, and terms and conditions on CIM's registration requiring an independent consultant to review its policies.

The respondent in an Ontario Securities Commission proceeding brought a motion to strike certain paragraphs of an affidavit and factum filed by Staff on an upcoming jurisdiction motion, arguing the paragraphs were irrelevant.

The Commission dismissed the motion to strike, holding that Rule 25.11 of the Rules of Civil Procedure provides an appropriate guideline for striking evidence in Commission proceedings, and that irrelevance alone is insufficient to warrant striking evidence on a preliminary motion.

The relevance of the impugned evidence is best determined by the panel hearing the main motion after the evidence develops in cross-examination.

Staff of the Ontario Securities Commission commenced an enforcement proceeding against Caldwell Investment Management Ltd. (CIM) alleging failure to provide best execution of trades.

CIM brought a motion seeking disclosure of communications between Staff and potential experts, as well as information regarding the best execution practices of other OSC registrants.

The Commission denied the motion, finding that communications with potential experts were protected by litigation privilege and that the practices of other registrants were irrelevant and confidential.

The Commission ordered disclosure of only one factual notation from the expert materials.

Staff of the Ontario Securities Commission sought approval of a settlement agreement with eToro (Europe) Limited, a Cyprus-based brokerage firm. eToro admitted to breaching Ontario securities law by operating an online trading platform that allowed Ontario residents to trade contracts for differences (CFDs) without being registered or filing a prospectus.

Despite previous assurances to Staff that it did not accept trades from Ontario residents, eToro opened nearly 2,500 accounts for Ontario investors.

The Commission approved the settlement, finding it in the public interest, and ordered an administrative penalty of $550,000, disgorgement of $1,791,163, and costs of $25,000, noting eToro's cooperation and implementation of enhanced compliance procedures.

The Ontario Securities Commission approved a settlement agreement between Staff and Global RESP Corporation.

The firm admitted to failing to implement policies and procedures to ensure compliance with a 2014 settlement, which prohibited its CEO from acting as an officer.

The approved settlement imposed terms and conditions on the firm's registration, an administrative penalty of $50,000, costs of $25,000, and a reprimand.

Staff of the Ontario Securities Commission sought approval of a settlement agreement with the respondent following an inter-jurisdictional proceeding based on an SEC order.

The SEC had found that the respondent failed to disclose substantial perquisites and personal expense reimbursements in proxy statements.

The Commission approved the settlement, noting the respondent's cooperation and the terms already imposed on his registered firms, and ordered him to resign and be prohibited from acting as an officer or director of any Ontario reporting issuer for five years.

Following a merits decision finding that the respondents breached Ontario securities law by mishandling principal protected notes and causing a $1.2 million deficiency, the Commission held a sanctions and costs hearing.

The Commission ordered the respondents to jointly and severally disgorge $1,181,397.89, representing the funds obtained through unsupported redemption requests.

The Commission also imposed administrative penalties of $200,000 each, 10-year market participation bans, and joint and several costs of $487,950.34, emphasizing the need for specific and general deterrence given the deliberate and dishonest nature of the misconduct.

The applicant, Macquarie Capital Markets Canada Ltd., applied under section 144 of the Securities Act to vary a 2001 Commission order that required its officers and employees to carry their trading accounts with the firm.

The applicant submitted that it no longer deals with retail clients and that the regulatory environment has changed significantly.

The Commission found that removing the condition would not be prejudicial to the public interest, noting the importance of reducing regulatory burden and avoiding duplicative requirements.

The application was granted, subject to the applicant implementing new policies and procedures for account supervision.

Following the dismissal of the appellants' appeal from an Ontario Securities Commission decision finding them guilty of securities fraud, the Commission and the intervenors sought costs.

The Commission sought $40,000, which the court awarded in full on a partial indemnity basis.

The intervenors, who were the appellants' former counsel and intervened to defend against allegations of ineffective assistance, sought over $53,000 on a substantial indemnity basis.

The court held that the intervenors were entitled to costs as parties to the appeal, but reduced the scale to partial indemnity and fixed their costs at $20,000.

Following findings that the respondents engaged in three separate frauds involving the sale of shares at an inflated value, undisclosed use of investor funds to pay dividends, and misappropriation of funds, the Ontario Securities Commission held a sanctions and costs hearing.

The Commission ordered the individual respondents to disgorge over $3.3 million obtained through their fraudulent conduct.

In addition, the Commission imposed administrative penalties of $600,000 each on the individual respondents and $300,000 on the corporate respondent, ordered permanent market prohibitions, and awarded $550,000 in costs.

The appellants appealed the Ontario Securities Commission's decisions finding them liable for securities fraud and imposing severe sanctions, including lifetime trading bans, disgorgement, and administrative penalties.

The appellants argued that the presiding commissioner was biased, that their counsel at the hearing was incompetent and in a conflict of interest, and that the findings of fraud and the penalties were unreasonable.

The Divisional Court dismissed the appeal, finding no reasonable apprehension of bias, rejecting the fresh evidence regarding counsel's competence as it would not have affected the outcome, and concluding that the Commission's findings on fraud and sanctions were reasonable and supported by the evidence.

The applicants applied under section 144 of the Securities Act to vary a merits decision that found they had committed numerous contraventions of Ontario securities law.

Staff of the Commission brought a motion to dismiss the application on the basis that it failed to demonstrate a tenable legal basis.

The Commission granted the motion and dismissed the application, finding that the applicants' arguments regarding alleged conflicts of interest, disclosure issues, and factual errors were essentially an appeal of the merits decision.

The evidence presented was neither new nor compelling, and the applicants failed to meet the standard for section 144 relief.

The Ontario Securities Commission found that Pro-Financial Asset Management Inc. (PFAM) and its CEO, Stuart McKinnon, committed numerous breaches of Ontario securities laws.

PFAM acted as a market intermediary for principal protected notes (PPNs) and failed to deal fairly, honestly, and in good faith with its clients, resulting in a $1.2 million deficiency in the PPN trust account due to unsupported redemption requests and price variances.

PFAM also breached its standard of care as an investment fund manager, failed to maintain minimum working capital, failed to keep satisfactory records, and failed to maintain adequate compliance systems.

McKinnon, as a director and officer, was found to have authorized, permitted, or acquiesced in these breaches and failed to fulfill his responsibilities as Ultimate Responsible Person (URP) and Ultimate Designated Person (UDP).

The conduct was found to be contrary to the public interest.

The appellants challenged the Ontario Securities Commission's decision to constitute a different panel for the sanctions hearing than the panel that presided over the merits hearing.

The merits panel found that the appellants had sold securities without being registered as dealers and traded securities without a prospectus.

After the original commissioners' terms expired, a new panel was appointed to conduct the sanctions hearing.

The appellants argued this violated the Statutory Powers Procedures Act and principles of procedural fairness.

The Divisional Court split on the issue but ultimately dismissed the appeal, finding the Commission's interpretation reasonable.

The Court of Appeal affirmed, holding that both interpretations were reasonable and that the Commission's approach did not violate procedural fairness or natural justice.

Following a remittal from the Divisional Court, the Ontario Securities Commission held a fresh hearing to determine the appropriate sanctions for Kevin Loman, who was previously found to have engaged in unregistered trading and illegal distribution of securities.

The Commission considered Loman's role as a salesperson, his prior registration experience, and the harm caused to investors.

The Commission ordered 8-year market prohibitions, including bans on trading, acquiring securities, and acting as a director or officer, subject to a limited carve-out.

Loman was also ordered to pay a $60,000 administrative penalty.