The court varied a receivership order to significantly reduce frozen assets due to regulatory misconduct in a related U.S. proceeding and investigative delay, while confirming the receiver's authority to share non-privileged data with the Commission.
The Ontario Securities Commission sought the appointment of a receiver over the assets of Traders Global Group Inc. and related entities based on allegations of fraud and unregistered securities trading.
The receiver was appointed in January 2024.
More than nineteen months later, the respondents brought a motion to discharge the receiver, and the receiver sought directions regarding disclosure of data to the Commission.
The court found that significant changes in circumstances had occurred since the appointment, including the dismissal of related U.S. proceedings due to misconduct by CFTC staff whose evidence had supported the receivership appointment, the discovery of a Nova Scotia decision that undermined the novelty of the Commission's legal theory, and substantial delay in the investigation without issuance of an Application for Enforcement Proceeding.
The court granted the respondents' alternative request to vary the appointment order, reducing the frozen assets from tens of millions to $10 million in escrow, while retaining the receiver to administer the escrow and act as intermediary for data disclosure.
The court also confirmed the receiver's authority to share non-privileged data with the Commission under the appointment order.
