Administrative Law - OCMT

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

The respondents did not appear but had previously indicated they did not object.

The Commission expressed concern that despite the passage of over a year since the initial order, Staff had not yet filed a Statement of Allegations.

Balancing the diminished investor protection rationale (due to an ongoing receivership) against the need for transparency and timely proceedings, the Commission declined the requested five-month extension and instead extended the order for only two months.

The Ontario Securities Commission found that the respondents engaged in unregistered trading and illegal distribution of securities through the 'Strictrade Offering', a complex software licensing scheme marketed for its tax benefits.

The Commission determined the offering was an 'investment contract' under the Pacific Coast Coin test.

The respondents breached registration and prospectus requirements, and the registrant respondents failed to meet their know-your-client, know-your-product, and suitability obligations.

Allegations of misrepresentation in the contracts were dismissed.

Staff of the Ontario Securities Commission and the CIBC Dealers entered into a settlement agreement regarding inadequacies in the dealers' systems of controls and supervision.

These inadequacies resulted in certain clients paying excess fees on mutual funds, structured notes, exchange-traded funds, and closed-end funds held in fee-based accounts.

The CIBC Dealers self-reported the issues, cooperated with Staff, and agreed to a compensation plan estimated at $73,260,104 for affected clients, along with voluntary payments of $3,000,000 to the Commission and $50,000 for costs.

The Commission approved the settlement agreement, finding it to be in the public interest.

The CIBC Dealers self-reported inadequacies in their systems of controls and supervision that resulted in certain clients paying excess fees.

Staff of the Ontario Securities Commission and the CIBC Dealers entered into a Settlement Agreement.

The Commission approved the Settlement Agreement, noting the CIBC Dealers' prompt self-reporting, cooperation, implementation of a compensation plan estimated at $73.2 million for affected clients, and voluntary payments of $3 million to the Commission and $50,000 for costs.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional order under subsection 127(10) of the Securities Act against the respondents, based on a decision by the British Columbia Securities Commission (BCSC).

The BCSC had found that the respondents perpetrated a fraud and diverted investor funds for personal use, imposing permanent market bans, an administrative penalty, and disgorgement.

The respondents did not appear at the written hearing.

The Commission found that the BCSC order met the requirements of subsection 127(10) and that it was in the public interest to protect Ontario's capital markets by imposing reciprocal permanent market bans against the respondents.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional order against the respondents under subsection 127(1) of the Securities Act, based on a prior decision by the British Columbia Securities Commission.

The BCSC had found that the respondents perpetrated a fraud and imposed permanent market bans, an administrative penalty, and disgorgement.

The Commission found that the statutory requirements for a reciprocal order were met and that it was in the public interest to protect Ontario's capital markets.

The Commission granted the application and imposed permanent market bans against the respondents in Ontario.

Staff of the Ontario Securities Commission sought an inter-jurisdictional order imposing sanctions against the respondent, who had entered into a settlement agreement with the Alberta Securities Commission admitting to insider trading.

The respondent did not participate in the written hearing.

The Commission found that the threshold for a reciprocal order under subsection 127(10) of the Securities Act was met and that it was in the public interest to issue a protective order.

The respondent was ordered to cease trading in securities or derivatives until February 10, 2022, subject to certain exceptions.

Staff of the Ontario Securities Commission alleged that the Scotia Dealers failed to establish, maintain, and apply appropriate controls and procedures with respect to supervision, resulting in certain clients paying excess fees.

The Scotia Dealers self-reported the inadequacies, cooperated with Staff, and entered into a no-contest settlement agreement.

The Commission approved the settlement agreement, noting the Scotia Dealers' commitment to pay compensation to affected clients, enhance policies and procedures, and make voluntary payments of $800,000 for investor education and $50,000 for costs.

The Commission found the settlement to be in the public interest.

The applicant, a registered mutual fund salesperson, applied for a hearing and review of an MFDA decision that permanently prohibited him from conducting securities-related business and imposed a fine and costs for failing to cooperate with an investigation.

The applicant argued the MFDA lacked jurisdiction to investigate his 'outside business activity' because it was a personal philanthropic venture, and claimed his professional obligations as an accountant prevented him from providing information.

The Ontario Securities Commission dismissed the application, finding the MFDA had jurisdiction to investigate client complaints and the applicant failed to present any new and compelling evidence to justify intervening in the MFDA's decision.

Staff of the Ontario Securities Commission alleged that the respondents contravened Ontario securities law by engaging in unregistered trading, conducting illegal distributions, making prohibited representations about listing on an exchange, and perpetrating fraud on investors.

The Commission found that Blue Gold Holdings Ltd., Raj Kurichh, and Nigel Greening engaged in the business of trading without registration.

BGH and Kurichh were found to have engaged in illegal distributions and made prohibited representations regarding listing.

Furthermore, BGH and Kurichh were found to have perpetrated fraud by misrepresenting the company's sales pipeline and government approvals, diverting investor funds for personal use, and fraudulently diluting the interests of retail shareholders.

Kurichh and Greening were deemed liable for BGH's breaches as directors and officers who authorized, permitted, or acquiesced in the non-compliance.

A sanctions hearing was ordered.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondents under s. 127(10) of the Securities Act, based on a prior decision of the British Columbia Securities Commission.

The BCSC had found that the respondents perpetrated a fraud and engaged in unregistered trading.

The Commission found that the statutory threshold was met and that it was in the public interest to issue a reciprocal order to protect Ontario investors.

The Commission ordered permanent bans on trading, acquiring securities, and acting as a director or officer for the respondents.

Multiple groups of investors and the respondents brought motions before the Ontario Securities Commission seeking to revoke Freeze Directions, allocate disgorged funds to specific investors, and facilitate the sale of frozen real property.

The respondents also sought to vary the disgorgement amount or set aside the previously approved settlement agreement.

The Commission dismissed the motions, holding that it lacks adjudicative jurisdiction to order restitution to individual investors or to vary an approved settlement agreement.

The Commission noted that the allocation of disgorged funds is an administrative function and directed Staff to apply to the Superior Court of Justice for directions on distributing the frozen funds and facilitating the sale of the real estate.

The applicant, a registered investment representative, sought a hearing and review of an IIROC decision finding him liable for recommending transactions that caused unnecessary fees to clients and undue commissions to himself, and for borrowing funds from clients.

The applicant argued that IIROC's denial of his adjournment request was procedurally unfair.

The Ontario Securities Commission dismissed the application, finding no denial of procedural fairness as the applicant failed to provide required medical evidence to support his adjournment request.

The Commission upheld IIROC's findings on liability, concluding that the applicant's transactions were outside the bounds of good business practice and that borrowing from clients constituted conduct unbecoming.

The Commission also found the penalties imposed by IIROC, including disgorgement and fines, to be proportionate.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondent under subsection 127(10) of the Securities Act, based on a prior decision of the British Columbia Securities Commission (BCSC).

The BCSC had found that the respondent perpetrated a fraud on an investor and traded without registration, permanently banning him from British Columbia's capital markets.

The Commission found that the BCSC order met the requirements of subsection 127(10) and that it was in the public interest to protect Ontario investors by imposing reciprocal sanctions.

The Commission ordered permanent bans on the respondent trading in securities, acting as a registrant, and serving as a director or officer of any issuer or registrant in Ontario.

Following a merits hearing where the respondents were found to have engaged in unregistered trading, illegal distributions, and fraud, the Commission held a sanctions and costs hearing.

The Commission ordered permanent market bans against all respondents, finding their conduct egregious and harmful to investors who lost over $1.6 million.

Administrative penalties of $500,000 and $300,000 were imposed on the individual respondents, along with orders to disgorge the amounts obtained from the fraud.

The respondents were also ordered to pay the costs of the investigation and hearing.

Following his criminal conviction for fraud relating to the Greyhawk Millenium investment fund, Staff of the Ontario Securities Commission sought permanent market bans against the respondent under s. 127(10) of the Securities Act.

The Commission found that the respondent's conviction arose from a course of conduct related to securities, as the investments met the test for an investment contract.

While the respondent's misconduct caused significant losses and involved falsified documents, the Commission noted his full cooperation and genuine remorse as mitigating factors.

The Commission ordered permanent bans on the respondent acting as a registrant, investment fund manager, or promoter, but limited the trading and director/officer bans to 10 years with exceptions allowing him to provide for his family.

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.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order under s. 127(10) of the Securities Act against the respondent, based on a settlement agreement and order from the British Columbia Securities Commission.

The respondent had admitted to trading in securities without registration and illegally distributing securities in British Columbia.

The respondent did not appear at the hearing.

The Commission found that the statutory test was met and that it was in the public interest to issue a reciprocal order.

The Commission imposed trading and registration bans mirroring the BC order until May 7, 2017.

Staff of the Ontario Securities Commission sought an order under s. 127(1) of the Securities Act against the respondent, who had previously been convicted of multiple counts of theft by conversion for misappropriating nearly $5 million from his clients.

The Commission found that the respondent's criminal convictions arose from a course of conduct related to securities, as the transactions met the test for an investment contract.

Given the respondent's egregious breach of trust, exploitation of vulnerable clients, and the significant losses caused, the Commission concluded it was in the public interest to permanently remove him from Ontario's capital markets.

The Commission ordered permanent bans on trading, acquiring securities, and acting as a director, officer, or registrant.

Following his criminal conviction for fraud in relation to a $50 million Ponzi scheme, Staff of the Ontario Securities Commission sought a reciprocal order against the respondent under s. 127(10) of the Securities Act.

The Commission found that the respondent's criminal conviction arose from a course of conduct related to securities, specifically investment contracts.

Given the egregious nature of the fraud, the respondent's lack of remorse, and the need for specific and general deterrence, the Commission concluded that permanent market bans were necessary to protect the public interest.