The Ontario Securities Commission alleged that the respondents engaged in unregistered trading and illegal distribution of securities without a prospectus in relation to the sale of preference shares to 11 Chinese investors seeking to immigrate under Ontario's Provincial Nominee Program.
The Commission dismissed the allegations, finding that the respondents were pursuing legitimate business interests in developing a solar energy business, and their fundraising activities were not mainly the sale of securities.
Furthermore, the Commission held that the prospectus requirements did not apply to the distribution outside Ontario absent fraudulent conduct, and that the sales fell under the private issuer exemption.
