Matthew Boswell

Staff of the Ontario Securities Commission brought a proceeding against the respondent for making misleading statements and breaching a cease trade order.

The hearing proceeded in writing after the respondent failed to file materials.

Based on affidavit evidence, the Commission found that the respondent made misleading statements regarding his employment history and financial situation, contrary to section 122(1)(a) of the Securities Act.

The Commission also found that the respondent breached a prior sanctions decision and cease trade order by trading securities, contrary to section 122(1)(c) of the Act.

A sanctions hearing was ordered to be scheduled.

The Ontario Securities Commission held a hearing on the merits regarding allegations that Goldpoint Resources Corporation and its principals engaged in a fraudulent scheme to market and issue securities.

The Commission found that the respondents traded previously unissued Goldpoint shares without meeting registration and prospectus requirements, and that the accredited investor exemption was not available.

The respondents made prohibited representations that Goldpoint would be listed on a stock exchange and made false statements about having profitable mining operations in Ghana.

The Commission found that the respondents engaged in the unauthorized diversion of investor funds, depriving over 110 investors of approximately $1.7 million, thereby committing fraud.

Novielli and Moloney were found liable as directors or officers for Goldpoint's contraventions.

Pimentel was also found to have made materially untrue statements during a compelled examination.

The applicants, respondents in an enforcement proceeding, brought a motion to dismiss or adjourn the proceedings.

They argued there was a reasonable apprehension of bias due to the Ontario Securities Commission's multifunctional structure and a separate panel's approval of settlement agreements with other respondents.

They also challenged the Commission's jurisdiction, claiming they were not participants in Ontario's capital markets.

The Commission dismissed the motion, finding no sufficient evidence of institutional bias and noting that the Supreme Court of Canada has upheld the integrated agency model.

The jurisdictional challenge was dismissed as premature, to be determined at the merits hearing.

The applicant, Weizhen Tang, brought an application to permit him to trade in foreign currencies under supervision on behalf of himself and consenting investors, despite an existing temporary cease trade order.

Staff of the Ontario Securities Commission sought to extend the temporary cease trade order pending related criminal proceedings.

The Commission found that the applicant had admitted to serious allegations, including failing to disclose losses, creating misleading account statements, and dissipating all invested funds in what Staff alleged was a Ponzi scheme.

The Commission dismissed the application to permit trading, finding it would pose an unacceptable risk of further harm to investors and capital markets, and extended the temporary cease trade order.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and Gord McQuarrie regarding allegations of unregistered trading, illegal distribution, and making prohibited representations in relation to Shallow Oil & Gas Inc. McQuarrie admitted to acting as a salesperson, trading without registration, and falsely representing that the company would be listed on a stock exchange.

The Commission approved the settlement, finding the agreed sanctions—including a $500 administrative penalty, $2,500 disgorgement, $500 in costs, a permanent telephoning ban, and a 4-year market ban—to be within acceptable parameters and in the public interest.

The respondent breached a 2004 cease trade order by trading securities listed on U.S. exchanges through brokerage accounts located in Toronto.

The respondent believed in good faith, based on legal advice, that trading on U.S. exchanges was permitted regardless of the account location.

The Commission found the breach was inadvertent but emphasized that respondents are responsible for ensuring compliance with Commission orders.

The Commission imposed an administrative penalty of $25,000, ordered disgorgement of any profits from the divestiture of the securities, permanently prohibited trading with a limited RRSP carve-out, and ordered $15,000 in costs.

Staff of the Ontario Securities Commission sought to extend a temporary cease trade order against the respondents, who were alleged to have engaged in unregistered trading and illegal distributions of securities.

Only one respondent appeared at the hearing, unrepresented, and contested the extension but provided no evidence.

The Commission admitted hearsay evidence from Staff's investigator, finding it appropriate at an early stage of the proceeding.

Applying the reverse onus under s. 127(8) of the Securities Act, the Commission found the respondent failed to provide satisfactory information to show why the order should not be extended.

The temporary cease trade order was extended against all respondents.