Melissa MacKewn

The Professional Conduct Committee of the CPAO sought judicial review of an internal Appeal Decision that ordered the readmission of a former accountant whose license was revoked following criminal convictions for fraud.

The Divisional Court allowed the application, finding that the Appeal Panel failed to conduct a proper reasonableness review of the initial Reconsideration Decision.

Instead of deferring to the Reconsideration Panel's assessment of the applicant's remorse and rehabilitation, the Appeal Panel impermissibly reweighed the evidence.

Furthermore, the Appeal Panel failed to consider whether readmission was consistent with maintaining public trust in the profession.

The Appeal Decision was set aside and the Reconsideration Decision denying readmission was restored.

Following a merits decision finding that the respondents perpetrated a securities fraud and that Furtado misled the Commission, the Tribunal held a sanctions hearing.

The Tribunal found the misconduct to be very serious, though not the most egregious, as it involved a legitimate business and no registrable activity.

The Tribunal ordered 10-year market participation bans for all respondents, with a carve-out for Furtado's registered plans.

The respondents were ordered to jointly and severally disgorge $22,200,000, representing the amounts obtained from investors less redemptions and the investment of one fully informed investor.

Furtado was ordered to pay an administrative penalty of $1,000,000, and the corporate respondents $200,000 each.

Costs of $638,613.85 were awarded to the Commission.

The Ontario Securities Commission alleged that Oscar Furtado and his corporate entities defrauded investors in several real estate limited partnerships, traded securities without registration, and made misleading statements to the Commission.

The Capital Markets Tribunal found that Furtado perpetrated a securities fraud in five ways, including failing to disclose his intent to profit from a property acquisition, redeeming units contrary to representations, and misusing assets of other partnerships.

The Tribunal also found that Furtado made misleading statements to the Commission during its investigation.

However, the Tribunal dismissed the allegations that the respondents engaged in the business of trading securities without registration, finding they were raising capital for an underlying real estate business.

The Ontario Securities Commission alleged that the respondents engaged in an illegal distribution of Canopy Growth Corporation shares and that Cormark and Kennedy failed to deal fairly, honestly, and in good faith with Canopy, or alternatively, acted contrary to the public interest.

The allegations centered on a series of transactions involving a private placement, a securities loan agreement, and short sales executed when Canopy was added to the TSX composite index.

The Capital Markets Tribunal dismissed all allegations, finding that the transactions did not constitute an illegal distribution under the extended definition, Canopy was not a client of Cormark or Kennedy, and the respondents did not mislead Canopy or otherwise engage the Tribunal's public interest jurisdiction.

The applicant, Oscar Furtado, brought a motion to adjourn the merits hearing due to ongoing health issues, supported by an independent medical examination from a psychiatrist.

Staff of the Ontario Securities Commission did not oppose the adjournment.

The Capital Markets Tribunal found that the medical evidence established exceptional circumstances, as the applicant required time to stabilize and meaningfully participate in the hearing.

The Tribunal granted the adjournment to July 2024.

The Tribunal also ordered that specific portions of the medical report detailing symptoms and diagnosis be redacted to protect the applicant's privacy, while general context and conclusions remain public.

In an enforcement proceeding, the moving parties (Cormark and Kennedy) sought a summons directing a non-party (Canopy) to produce documents listed in privilege logs previously provided to Staff.

The Capital Markets Tribunal found that the documents appeared relevant to the moving parties' ability to make full answer and defence, particularly regarding Canopy's state of mind.

The Tribunal issued the summons and ordered that the documents be produced to a third-party referee to conduct a privilege review, as the logs raised questions about the validity of the solicitor-client privilege claims.

Oscar Furtado brought a motion to adjourn the merits hearing on medical and disclosure grounds, to compel further disclosure from Staff, and to keep parts of the hearing and record confidential.

The Tribunal dismissed the adjournment request, finding the medical evidence insufficient to establish exceptional circumstances and no delay in disclosure warranting an adjournment.

The Tribunal also dismissed the disclosure request, finding Staff met its obligations.

The Tribunal granted the confidentiality request in part, ordering redactions of specific medical details and certain exhibits to balance the open court principle with Furtado's privacy interests.

The respondent, Oscar Furtado, brought a motion to adjourn the merits hearing indefinitely due to serious physical and mental health issues.

He also requested that the motion be heard in confidence and that documents containing his personal health information be sealed.

The Capital Markets Tribunal found that Furtado's health constituted exceptional circumstances warranting an adjournment, but declined to grant an indefinite delay, rescheduling the hearing to November 2023.

Applying the Sherman Estate test, the Tribunal ordered that specific details regarding Furtado's symptoms, diagnosis, and treatment be redacted from the adjudicative record and hearing transcript to protect his personal dignity, while maintaining the public's right to know how his health issues affected his ability to participate.

Staff of the Ontario Securities Commission brought a motion for a further and better witness summary from the respondent, Oscar Furtado.

Furtado had provided an amended witness summary stating he would testify generally in accordance with his compelled interview transcripts and refer to documents in Staff's disclosure.

The Capital Markets Tribunal found the amended witness summary deficient under Rule 27(3) of the Tribunal's Rules of Procedure.

The Tribunal held that stating the witness would testify 'generally in accordance with' transcripts created ambiguity about the scope of evidence, failing to disclose its substance.

Furthermore, the broad reference to Staff's disclosure did not sufficiently identify the documents to be referred to.

The Tribunal ordered Furtado to deliver a further and better witness summary.

The Ontario Securities Commission (OSC) brought a motion seeking an order for the issuance of Letters of Request in Commissions under section 152 of the Securities Act.

The OSC required evidence from two individuals, one residing in British Columbia and one in Massachusetts, USA, for a proceeding before the Capital Markets Tribunal concerning Bridging Finance Inc. and its respondents.

The respondents did not oppose the motion.

The court granted the order, finding that the proposed witnesses had relevant evidence and that the Letters of Request and Commissions accorded with Rule 34.07(2) of the Rules of Civil Procedure.

The respondents, David and Natasha Sharpe, brought motions to stay the enforcement proceeding against them, alleging abuse of process.

They argued that the Ontario Securities Commission improperly filed their compelled testimony in a court application for a receiver without obtaining a section 17 order under the Securities Act, thereby prejudicing their right to a fair hearing and bringing the administration of justice into disrepute.

The Capital Markets Tribunal dismissed the motions, finding that the public availability of the compelled evidence did not prejudice their right to a fair hearing, as any potential witness tainting could be addressed through cross-examination.

Furthermore, the Tribunal concluded that the Commission's conduct, while based on a mistaken interpretation of the law, was not in bad faith and did not constitute the rare and exceptional circumstances required to justify a stay of proceedings.

The respondent, Marc Judah Bistricer, brought a motion seeking additional disclosure from Staff of the Ontario Securities Commission regarding documents obtained during its investigation.

Staff alleged that the respondents engaged in abusive short selling and other transactions contrary to the animating principles of the Securities Act.

Bistricer sought documents relating to similar transactions by others and all materials obtained under section 11 investigation orders.

The Capital Markets Tribunal dismissed the motion, finding that the disclosure request was too vague and imprecise.

Furthermore, even interpreting the request generously, the Tribunal held that the requested documents were irrelevant, as the standard for the respondents' conduct is not determined by the prevalence of similar conduct by others in the market, and Staff's disclosure obligation does not extend to all materials obtained during an investigation.

The applicants, David and Natasha Sharpe, sought to vary an earlier Tribunal decision that denied their request for disclosure in support of their pending motions to stay the proceeding for abuse of process.

They argued that the Supreme Court of Canada's recent decision in R v Haevischer, which established a 'manifestly frivolous' standard for summary dismissal of stay applications in criminal cases, changed the applicable law.

The Tribunal dismissed the application, finding that Haevischer applies specifically to criminal cases and summary dismissals of stay applications, not to disclosure requests in administrative proceedings where the onus lies on the party seeking disclosure.

The respondents moved to stay an enforcement proceeding and requested the Tribunal issue summonses to five members of OSC Staff to testify at the stay motion hearing.

The respondents sought evidence regarding the OSC's decision to include compelled evidence in a receivership application without a section 17 order.

The Tribunal dismissed the request, finding it was an impermissible attempt to re-litigate issues already decided in a previous motion for documentary disclosure, and that the respondents failed to establish a reasonable basis that the summonses would lead to relevant evidence of abusive conduct.

Staff of the Ontario Securities Commission brought motions seeking further witness summaries from the respondents and the dismissal of the respondents' stay motions.

The respondents argued that the scheduling of these motions should be delayed pending their application for judicial review of a previous Tribunal decision.

The Tribunal held that the judicial review application should not delay the proceeding.

The Tribunal scheduled the motion for further witness summaries to be heard orally, treated Staff's motion to dismiss the stay motions as withdrawn, and set a schedule for the exchange of materials for the stay motions.

The respondents, David and Natasha Sharpe, brought a motion to adjourn their motions for a stay of proceedings, the merits hearing, and related filing dates until their judicial review application of a prior Tribunal decision is determined by the Divisional Court.

The Capital Markets Tribunal dismissed the motion, finding that the pending judicial review application did not constitute an 'exceptional circumstance' under Rule 29(1) of the Tribunal's Rules of Procedure.

The Tribunal emphasized the public interest in proceeding expeditiously and noted that the mere filing of a judicial review application does not automatically warrant an adjournment.

David and Natasha Sharpe brought motions for disclosure of various documents to support their motions for a stay of proceedings based on an alleged abuse of process.

The alleged abuse was the Ontario Securities Commission's filing of their compelled testimony in a public court record for a receivership application without first obtaining a section 17 order.

The Capital Markets Tribunal dismissed the disclosure motions, finding that the Sharpes failed to establish a tenable case of abuse of process, as the disclosure occurred in a separate proceeding, did not affect the adjudicative fairness of the current proceeding, and there was no evidence of bad faith by OSC Staff.

The respondent, former Chief Compliance Officer of Bridging Finance Inc., brought a motion for an expedited or separate merits hearing regarding the allegations against him, citing financial constraints.

Staff of the Ontario Securities Commission and other respondents opposed the motion.

The Capital Markets Tribunal dismissed the motion, finding that the allegations against the moving party were inextricably intertwined with those against the other respondents, and that his proposed mechanisms would not result in a just, expeditious, and cost-effective proceeding.

The respondents David and Natasha Sharpe brought motions to stay the enforcement proceeding, alleging abuse of process related to the Commission's use of compelled evidence without a section 17 order.

The Tribunal held a scheduling hearing and determined that the stay motions should be heard before the merits hearing, as the potential efficiencies outweighed the risk of duplicated effort.

The Tribunal also declined to delay the stay motions pending the outcome of a related judicial review application, citing the public interest in proceeding expeditiously.

A schedule was set for the disclosure motions, stay motions, and the merits hearing.

The moving party, David Sharpe, sought a stay of an earlier Tribunal decision that dismissed his request to keep certain portions of the adjudicative record confidential.

He sought the stay pending his application for judicial review of that decision.

The Tribunal dismissed the motion, finding it lacked jurisdiction under the Statutory Powers Procedure Act to stay a final decision on confidentiality.

The Tribunal further held that even if it had jurisdiction, it would not grant the stay because Sharpe failed to demonstrate irreparable harm and the balance of convenience favoured the public interest in the transparency of Tribunal proceedings.