Capital Markets Tribunal

Staff of the Ontario Securities Commission sought a reciprocating order under subsection 127(1) of the Securities Act based on a settlement agreement and order made by the British Columbia Securities Commission against the respondent.

The respondent had admitted to acting in furtherance of trades in securities contrary to prospectus requirements by signing promissory notes as a director of a guarantor.

The Commission granted the reciprocating order, prohibiting the respondent from trading in securities, acting as a director or officer of an issuer, registrant, or investment fund manager, and acting as a registrant, investment fund manager, or promoter, mirroring the BC Order with necessary modifications for Ontario.

The applicants applied under section 144 of the Securities Act to vary a merits decision that found they had committed numerous contraventions of Ontario securities law.

Staff of the Commission brought a motion to dismiss the application on the basis that it failed to demonstrate a tenable legal basis.

The Commission granted the motion and dismissed the application, finding that the applicants' arguments regarding alleged conflicts of interest, disclosure issues, and factual errors were essentially an appeal of the merits decision.

The evidence presented was neither new nor compelling, and the applicants failed to meet the standard for section 144 relief.

The applicants sought a review of a decision by a Director of the Ontario Securities Commission refusing to amend the individual applicant's registration to designate her as the ultimate designated person (UDP) for the applicant firms.

The Director had found the proposed amendment 'otherwise objectionable' under s. 27(1) of the Securities Act.

The Commission found that the individual applicant's father, who had been permanently suspended as UDP and prohibited from acting as an officer or director of any registrant due to prior non-compliance, continued to act as an officer of the firms by directing sales and recruiting.

The Commission held that the individual applicant, as chair of the boards, failed to take meaningful steps to ensure compliance with the prior order restricting her father's involvement.

Given the firms' history of non-compliance and the critical role of a UDP in promoting a culture of compliance, the Commission concluded that the proposed registration was objectionable and dismissed the application.

Staff of the Ontario Securities Commission and Execution Access, LLC entered into a settlement agreement regarding the respondent's operation of an electronic trading platform for US treasury bills in Ontario without registration or recognition.

The respondent cooperated with Staff to regularize its operations and there were no investor complaints.

The Commission approved the settlement, finding it fair and reasonable and in the public interest.

The respondent agreed to pay $970,000 for allocation by the Commission, $25,000 in costs, and was reprimanded.

Katanga Mining Limited applied for an order under section 17 of the Securities Act authorizing the disclosure of a confidential summons to individuals at four audit firms to assist with a review of past accounting practices.

The Commission granted the request with respect to Katanga's current auditor, finding minimal risk to the ongoing investigation.

However, the Commission denied the request to disclose the summons to the other three audit firms, finding that the potential risk to the investigation outweighed the purported need for disclosure, and instead authorized the disclosure of a letter from Staff confirming the investigation.

The Commission also ordered that its decision remain confidential for a limited period to protect the integrity of the investigation, subject to future publication.

The Ontario Securities Commission held a hearing to consider whether to issue a reciprocal order against the respondent, who had entered into a settlement agreement with the Alberta Securities Commission admitting to insider trading.

The respondent did not appear but consented to the order.

The Commission issued an order prohibiting the respondent from trading in or purchasing securities for a three-year period, reciprocating the substance of the Alberta settlement agreement to protect investors in Ontario.

Staff of the Ontario Securities Commission alleged that the respondents engaged in the business of trading binary options without being registered and without filing a prospectus.

The respondents operated an offshore trading platform and solicited Ontario investors, resulting in significant investor losses.

The Commission found that the binary options were investment contracts and therefore securities.

The Commission concluded that the respondents contravened sections 25(1) and 53(1) of the Securities Act by engaging in unregistered trading and illegal distributions.

Staff of the Ontario Securities Commission applied for a reciprocal order under s. 127(10) of the Securities Act against the respondents, based on a prior order of the British Columbia Securities Commission (BCSC).

The BCSC had found that the respondents perpetrated a fraud, traded without registration, and contravened cease trade orders.

The respondents did not participate in the written hearing.

The Commission found that the statutory preconditions were met and that it was in the public interest to make the reciprocal order to protect Ontario investors and capital markets.

The Commission permanently banned the respondents from trading, acquiring securities, and acting as directors, officers, or registrants.

The Ontario Securities Commission issued a reciprocal order against the respondent, David Gregor McClure, following a settlement agreement he entered into with the Alberta Securities Commission.

The respondent admitted to unregistered trading, illegal distribution of securities, and making misrepresentations.

The Commission modified the non-monetary sanctions from the Alberta agreement to align with its jurisdiction under the Ontario Securities Act, prohibiting the respondent from acquiring securities, acting as a director or officer of any issuer or registrant, and acting as a registrant or promoter.

Staff of the Ontario Securities Commission applied for an inter-jurisdictional enforcement order against the respondents pursuant to subsections 127(1) and 127(10) of the Securities Act, based on a prior order of the Alberta Securities Commission.

The Alberta panel had found that the respondents engaged in unregistered trading, illegal distribution of securities, and made materially misleading statements to investors.

The Commission found that the respondents' misconduct was serious and would have constituted contraventions of the Ontario Securities Act.

The Commission granted the application and issued a reciprocal order imposing trading bans, acquisition bans, and director/officer bans on the respondents to protect the Ontario capital markets.

The Ontario Securities Commission approved a settlement agreement between Staff and Home Capital Group Inc. (HCG) and three of its former executives.

The respondents admitted to misleading investors by failing to timely disclose the termination of several brokers and brokerages due to falsified loan applications, which caused a decline in mortgage originations.

The settlement included a $10 million payment by HCG for the benefit of a proposed class action, $500,000 in costs, and administrative penalties totaling $2 million against the individual respondents, who were also reprimanded and prohibited from acting as directors or officers of reporting issuers for varying periods.

The respondent admitted to contravening the Securities Act by selling convertible debentures to 20 individuals without being registered.

Staff of the Commission and the respondent entered into a settlement agreement proposing an administrative penalty, costs, and a ten-year ban from participating in the capital markets.

The Ontario Securities Commission approved the settlement agreement, finding its terms reasonable and in the public interest, noting the respondent's cooperation and the deterrent effect of the agreed sanctions.

Staff of the Ontario Securities Commission alleged that the Manulife Dealers failed to establish adequate controls and supervision, resulting in clients paying excess fees on certain investment products and mutual funds.

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

The Commission approved the settlement, finding it in the public interest given the dealers' prompt self-reporting, extensive cooperation, voluntary payments of $495,000 and $25,000 for costs, and an $11.7 million compensation plan for affected clients.

Staff of the Ontario Securities Commission sought a three-month extension of a temporary order that included a Removal of Exemptions Order against the respondents.

The central issue was the interpretation of 'hearing' in subsection 127(7) of the Securities Act, specifically whether it could mean a series of attendances at which Staff seeks repeated extensions.

The Commission rejected Staff's interpretation, finding that subsection 127(7) does not authorize the extension of a temporary order beyond the conclusion of a Temporary Order Hearing unless an Enforcement Proceeding has been commenced within fifteen days of the initial order.

The request to extend the Removal of Exemptions Order was denied.

The Ontario Securities Commission approved a settlement agreement between Staff and Electrovaya Inc. and its CEO, Dr. Sankar Das Gupta.

The respondents admitted to publishing unbalanced and incomplete news releases and failing to update forward-looking information, resulting in overly optimistic disclosure.

The settlement required the respondents to retain an independent consultant to review corporate governance and disclosure policies, appoint an independent director as chair, and restructure the disclosure committee.

Dr. Das Gupta was reprimanded, prohibited from acting as a director or officer of any other reporting issuer for one year, and paid a $250,000 administrative penalty.

Staff of the Ontario Securities Commission alleged that the RBC Registrants failed to establish sufficient controls and supervision, resulting in certain clients paying excess fees.

The RBC Registrants promptly self-reported the inadequacies, cooperated with Staff, and entered into a no-contest settlement agreement.

Under the settlement, the RBC Registrants agreed to pay over $21 million in compensation to affected clients, make a voluntary payment of $925,000 to the Commission, and pay $50,000 for costs.

The Commission approved the settlement, finding it to be in the public interest given the prompt self-reporting, cooperation, and comprehensive corrective actions taken by the registrants.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and the respondents regarding unregistered trading, illegal distribution, and fraud.

The respondents raised approximately $5.4 million from investors through promissory notes without being registered or filing a prospectus.

They also engaged in deceitful conduct by paying distributions from new investors' funds and misrepresenting the funds' performance.

The panel approved the settlement agreement, noting the respondents' admission of breaching Ontario securities law, their commitment to repay harmed investors, and the inclusion of oversight mechanisms.

The applicants, dissident shareholders engaged in a proxy contest, sought a hearing and review of a Toronto Stock Exchange (TSX) decision that conditionally approved the issuance of shares by Eco Oro Minerals Corp. to certain shareholders without requiring a shareholder vote.

The TSX permitted an accelerated closing of the share issuance just days before the record date for a requisitioned shareholder meeting.

The Ontario Securities Commission conducted a de novo review, finding that the TSX overlooked material evidence regarding the proxy contest and erred in its interpretation of 'materially affect control.' The Commission set aside the TSX decision, concluding that the share issuance materially affected control and required shareholder approval.

To remedy the improper issuance, the Commission ordered Eco Oro to hold a shareholder vote to either ratify or reverse the share issuance, cease-traded the new shares pending the vote, and prohibited the new shares from being voted at the upcoming meeting.