Court File and Parties

Court File No.: 100028 - Toronto Date: 2008-04-01 Ontario Court of Justice

Between: Her Majesty the Queen — And — Abel Da Silva

Before: Justice Sheila Ray

Heard: February 22, 2012 Sentenced: March 30, 2012 Reasons for Sentence Released: May 4, 2012

Location: Old City Hall, Toronto Region

Counsel:

Derek J. Ferris and Tamara B. Center, Counsel for the Prosecution (O.S.C.)
Jordana H. Goldlist, Counsel for the Defendant

RAY, J.:

INTRODUCTION

[1] Abel Da Silva has pled guilty before this court to the following offences:

On or between April 1, 2008, and September 30, 2008, in the City of Toronto and elsewhere in the Province of Ontario, Abel Da Silva traded in securities of Moncasa Capital Corporation (hereinafter Moncasa), without being registered to trade in such securities as required by section 25(1)(a) of the Securities Act, R.S.O. 1990, c. S.5 (hereinafter the Securities Act), and contrary to subsection 122(1)(c) of the Securities Act.

On or between April 1, 2008, and September 30, 2008, in the City of Toronto and elsewhere in the Province of Ontario, Abel Da Silva traded in securities of Moncasa, where such trading was a distribution of such securities, without having filed a preliminary prospectus, and obtaining receipts for them from the Director, as required by section 53(1) of the Securities Act.

On or between April 1, 2008, and September 30, 2008, in the City of Toronto and elsewhere in the Province of Ontario, Abel Da Silva did contravene Ontario securities law by trading in securities of Moncasa at a time when he was prohibited from trading in securities by order of the Ontario Securities Commission dated May 10, 2006, and did thereby commit an offence contrary to section 122(1)(c) of the Securities Act.

On or between April 1, 2008, and September 30, 2008, in the City of Toronto and elsewhere in the Province of Ontario, Abel Da Silva did contravene Ontario securities law by trading in securities of Moncasa at a time when he was prohibited from trading in securities by orders of the Ontario Securities Commission dated March 19, 2008, and September 30, 2008, and did thereby commit an offence contrary to section 122(1)(c) of the Securities Act.

On or between April 1, 2008, and September 30, 2008, in the City of Toronto and elsewhere in the Province of Ontario, Abel Da Silva did contravene Ontario securities law by trading in securities of Moncasa at a time when he was prohibited from trading in securities by orders of the Ontario Securities Commission dated January 16, 2008, January 31, 2008, March 31, 2008, and June 19, 2008, and did thereby commit an offence contrary to section 122(1)(c) of the Securities Act.

[2] The parties have filed an agreed statement of fact, which states that between April 1, 2008, and May 16, 2011, securities of Moncasa were sold to 57 investors in Ontario and throughout Canada, raising approximately $1.2 million, none of which has been returned to the investors. Moncasa shares were sold to the public on the pretence the capital raised would fund the acquisition of luxury properties in the Caribbean for use as rental units. Moncasa has never been registered with the Commission or elsewhere in Canada and shares were sold to the public without a prospectus, purportedly in reliance on the private issuer exemption.

[3] The parties have agreed that from April to September, 2008, Abel Da Silva was one of several commissioned salespersons employed by Moncasa. When in contact with investors by telephone or email, Da Silva used an alias to solicit investments from the public. At least 14 Moncasa investors dealt with Mr. Da Silva under his assumed alias. They purchased in excess of $220,000 worth of Moncasa shares. Da Silva was paid in cash for sales commissions of approximately 20% of the amounts invested in the shares he sold, which was approximately $44,000.

[4] It was agreed between the parties that Da Silva has never been registered with the Commission or any regulatory body in Canada. Da Silva traded in securities of Moncasa without registration or an appropriate exemption from the registration requirements and without the required prospectus receipt or appropriate exemption from the prospectus requirement of the Securities Act.

[5] During his employment by Moncasa Da Silva was the subject of three separate Cease Trade Orders (CTO's), all issued by the Ontario Securities Commission (OSC), relating to previous illegal distribution cases involving Abel Da Silva and others. He was ordered by the OSC on May 10, 2006, to cease trading in securities for a 7 year period: In the matter of Edward Joseph Allen (2006) 29 OSCB 3944. By orders of the OSC dated March 19, 2008, and September 30, 2008, Da Silva was ordered to cease trading in securities: In the matter of Al-tar Energy (2008) 31 OSCB 3551. CTO's dated January 16, 2008, January 31, 2008, March 31, 2008, and June 19, 2008, also prohibited him from trading: In the matter of Shallow Oil & Gas Inc. (2008) 31 OSCB 1003 (hereinafter Shallow Oil). Da Silva continued to trade in Moncasa shares in the face of these CTO's, and furthermore, he continued to trade in these shares after charges against him had been brought in the Shallow Oil matter. The Provincial Court Information in the Shallow Oil matter was sworn in Newmarket on June 18, 2008, and he continued to trade in Moncasa securities until September 2008.

[6] The Prosecution is seeking a sentence of incarceration for a total period of between 18 and 24 months less a day, followed by a probation order for a period of 2 years, and that this sentence should be consecutive to the 27 month sentence that Da Silva is currently serving for previous breaches of the Securities Act. The Defence says that Mr. Da Silva had engaged in the illegal trades of Moncasa shares during approximately the same time frame as he engaged in the Shallow Oil boiler room schemes, for which he was sentenced by Kenkel J. on November 15, 2011. For unknown reasons Mr. Da Silva was not charged with the Moncasa offences until December 20, 2011, and now the prosecution is seeking a consecutive sentence for the Moncasa matter, the totality of which would be excessive, and which offends the sentencing principle of proportionality. The defence says that any sentence chosen by the court should reflect what a global sentence would have been for both matters, had the Moncasa charges been brought in a more usual and timely fashion.

[7] On March 30, 2012, I sentenced Mr. Da Silva to a total of 18 months on all charges in relation to the Moncasa matter to be served concurrently with the 27 month sentence imposed by Kenkel J. on the Shallow Oil matter, which he began serving on November 15, 2011. I indicated that reasons would follow. These are those reasons.

GUIDING PRINCIPLES

[8] The Securities Act pursuant to which Mr. Abel Da Silva is charged is provincial regulatory legislation. The offences with which he is charged are sometimes referred to as "regulatory offences," "quasi-criminal offences," "public welfare offences," "statutory offences," or "provincial offences." The sentencing options available to this court are found in the Securities Act and the Provincial Offences Act (Ontario) (hereinafter the POA). The Criminal Code including its statement of purpose and principles is applicable to federal but not provincial regulatory offences. The POA contains no over-arching objectives, purposes, or principles of regulatory sentencing. The guiding principles that must be applied by an Ontario court, when sentencing an individual for a regulatory provincial offence, have been described as a "patchwork quilt" that is "in need of reform".

[9] Mr. Da Silva is charged with breaching s. 122(1)(c) of the Securities Act, which provides that "every person," who "contravenes Ontario securities law," is "guilty of an offence and on conviction is liable to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day, or to both." The offence does not appear to require proof of mens rea. Given the availability of very high fines and incarceration, I would not classify them as offences of absolute liability. Dr. R. Libman J. classifies them as strict liability offences in his authoritative book, Libman on Regulatory Offences in Canada. Kenkel J. also accepted this classification in his reasons for judgment in R. v. O'Brien, Da Silva et al. I also am persuaded that they are strict liability offences.

[10] The relevant portions of the law that Da Silva has contravened are the following:

Interpretation, other general matters

Definitions

1. (1) In this Act,

"Ontario securities law" means,

(a) this Act,
(b) the regulations, and
(c) in respect of a person or company, a decision of the Commission or a Director to which the person or company is subject;

"trade" or "trading" includes,

(a) any sale or disposition of a security for valuable consideration, whether the terms of payment be on margin, installment or otherwise, but does not include a purchase of a security or, except as provided in clause (d), a transfer, pledge or encumbrance of securities for the purpose of giving collateral for a debt made in good faith,
(b) any participation as a trader in any transaction in a security through the facilities of any stock exchange or quotation and trade reporting system,
(c) any receipt by a registrant of an order to buy or sell a security,
(d) any transfer, pledge or encumbering of securities of an issuer from the holdings of any person or company or combination of persons or companies described in clause (c) of the definition of "distribution" for the purpose of giving collateral for a debt made in good faith, and,
(e) any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of any of the foregoing;

25. (1) Unless a person or company is exempt under Ontario securities law from the requirement to comply with this subsection, the person or company shall not engage in or hold himself, herself or itself out as engaging in the business of trading in securities unless the person or company,

(a) is registered in accordance with Ontario securities law as a dealer, or
(b) is a representative registered in accordance with Ontario securities law as a dealing representative of a registered dealer and is acting on behalf of the registered dealer.

53(1) No person or company shall trade in a security on his, her or its own account or on behalf of any other person or company if the trade would be a distribution of the security, unless a preliminary prospectus and a prospectus have been filed and receipts have been issued for them by the Director.

[11] Section 2(1) of the POA states that the purpose of the Act is to provide a procedure for the prosecution of provincial offences which reflects the distinction between such offences and criminal offences. Drinkwater and Ewart characterize this distinction as both substantive and procedural. It is substantive in the sense that not all provincial offences require proof of the same mental elements as true crimes. It is procedural given the simplified criminal procedure model in the POA including limited options for sentencing. The substantive difference has been clarified by the Supreme Court of Canada in R. v. Sault Ste. Marie, by further classifying regulatory offences into the three well-known sub-categories of absolute liability offences, strict liability offences, and offences that require proof of mens rea. How a regulatory offence is classified can be a significant factor in sentencing. The more comparable a public welfare offence is to a criminal offence, the more favourable become the sentencing factors of denunciation, retribution, deterrence, and moral blameworthiness. The principle of retribution, denunciation's legitimate sibling, recognized as such by the Supreme Court of Canada in R. v. C.A.M., has been applied in sentencing very serious regulatory offenders. The general focus of regulatory law is on the protection of societal interests, not punishment of an individual's moral faults.

[12] The purpose of a regulatory statute, the need to encourage confidence in the regulatory regime, and the harm occasioned by regulatory breaches are important factors that have been taken into account, when regulatory offenders are sentenced. The need for penalties that strongly encourage statutory compliance is of particular importance, when the effects of such violations have wide "ramifications for society" and "strike at the heart and purposes" of an Act, such as the Securities Act. Cory J.A. observed the following in R. v. Wholesale Travel Group Inc.:

Regulatory schemes can only be effective if they provide for significant penalties in the event of their breach. Indeed, although it may be rare that imprisonment is sought, it must be available as a sanction if there is to be effective enforcement of the regulatory measure. Nor is the imposition of imprisonment unreasonable in light of the danger that can accrue to the public from breaches of regulatory statues. The spectre of tragedy evoked by such names as Thalidomide, Bhopal, Chernobyl and the Exxon Valdez can leave no doubt as to the potential human and environmental devastation which can result from the violation of regulatory measures. Strong sanctions including imprisonment are vital to the prevention of similar catastrophes. The potential for serious harm flowing from the breach of regulatory measures is too great for it to be said that imprisonment can never be imposed as a sanction.

[13] In R. v. Cotton Felts Ltd., the "bedrock" case on regulatory sentencing, Blair J.A. remarked:

In our complex interdependent modern society such regulatory statutes are accepted in the public interest. They ensure standards of conduct, performance and reliability by various economic groups and life tolerable for all. To a very large extent the enforcement of such statutes is achieved by fines imposed on offending corporations. The amount of the fine will be determined by a complex of considerations, including the size of the company involved, the scope of the economic activity in issue, the extent of actual and potential harm to the public, and the maximum penalty prescribed by the statute. Above all, the amount of the fine will be determined by the need to enforce regulatory standards by deterrence.

[14] Cotton Felts was a case involving a corporate offender. It was applied by the British Columbia Court of Appeal to an individual defendant in a case called R. v. Abbott. The Court stated that the sentencing principles applicable to public welfare offences are generally considered to be denunciation and deterrence. The "salutary principle" in these cases was that "public welfare offences involving the contravention of rules designed and enforced to protect the physical, economic, and social welfare of the public will attract sanctions that are designed to deter the offender and other like-minded persons." Cotton Felts was applied to sentencing individuals in a regulatory securities case by Lefever J. in R. v. Boyle, which was relied upon by the prosecution, and is found at tab 14 in its book of authorities.

[15] In their book on Canadian Securities Regulation, Dr. David L. Johnston and Kathleen Doyle Rockwell explain the following:

Securities regulation in Canada largely originated in the 20th century. For the first two-thirds of the century it was a relatively crude tool, primarily designed to deter fraud. But the last third has been different. Economic growth, the wide range and high value of securities, increased numbers and varied backgrounds of investors, the internationalization of capital markets, and technological advances have spawned a complex, comprehensive regulatory system…Traditionally, securities regulation aimed to protect investors. Regulators aspired to bar unscrupulous, fraudulent or incompetent issuers…from taking advantage of naïve, unsophisticated investors. But this approach was simplistic. It failed to accommodate the varied, and often conflicting, interests of all the actors in the securities market, including: investors, potential investors, the issuer, other issuers (in the same industry and in general), creditors, employees, investment dealers and advisers, financial institutions, governments, regulators, and even the non-investing public.

[16] These developments, the authors explain, have led to the Kimber Report of the Attorney General's Committee on Securities Legislation in Ontario, which effectively launched the "modern securities era," which has set "twin" goals for securities regulation: "investor protection and efficient capital markets." These "twin" goals are reflected in the OSC's understanding of its jurisdiction under the Securities Act, which is reflected in the following words of the Commission in Mithras Management Ltd.:

[T]he role of this Commission is to protect the public interest by removing from the capital markets – wholly or partially, permanently or temporarily, as the circumstances may warrant – those whose conduct in the past leads us to conclude that their conduct in the future may well be detrimental to the integrity of those capital markets. We are here to restrain, the best we can, future contact that is likely to be prejudicial to the public interest in having capital markets that are both fair and efficient. In so doing we must, of necessity, look to past conduct as a guide to what we believe a person's future conduct might reasonably be expected to be; we are not prescient, after all.

[17] The purposes of the Securities Act are set out in s. 1.1, and they are "to provide protection to investors from unfair, improper or fraudulent practices," and "to foster fair and efficient capital markets and confidence in capital markets." These purposes dovetail the "twin" goals of securities regulation discussed above, the second of which was not yet part of the Securities Act when the OSC expressed this view of its role in the Mithras Management case. With reference to a previous edition of Dr. Johnson's book, the Supreme Court of Canada adopted this view of the purpose of securities regulation in the case of Pezim v. British Columbia (Superintendent of Brokers). The Supreme Court of Canada also accepted the OSC's explanation of its role in Mithras Management in the case of Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission) (hereinafter Asbestos). It is through their "public interest jurisdiction" or "public interest power" found in s. 127 of the Securities Act that the OSC exercises its discretion to achieve the objectives of the Securities Act. The CTO's that Mr. Da Silva has pled guilty to contravening were issued pursuant to this authority.

[18] The Supreme Court of Canada also distinguished the role of the OSC from the role of the courts in Asbestos. The court stated:

[T]he purpose of the Commission's public interest jurisdiction is neither remedial nor punitive; it is protective and preventive, intended to be exercised to prevent likely future harm to Ontario's capital markets…The purpose of an order under s. 127 is to restrain future conduct that is likely to be prejudicial to the public interest in fair and efficient capital markets. The role of the OSC under s. 127 is to protect the public interest by removing from the capital markets those whose past conduct is so abusive as to warrant apprehension of future conduct detrimental to the integrity of the capital markets…In contradistinction, it is for the courts to punish or remedy past conduct under ss. 122 and 128 of the Act respectively.

[19] In spite of taking the view in Asbestos that the OSC's jurisdiction is protective and preventive and neither remedial nor punitive, the Supreme Court of Canada took the view in Re Cartaway Resources Corp. (hereinafter Cartaway) that general deterrence is an appropriate factor for the British Columbia Securities Commission (B.C.S.C.) to take into account in assessing an administrative penalty that is in the public interest. The Court in Cartaway commented that in the Asbestos case:

Because s. 127 is regulatory, its sanctions are not remedial or punitive, but rather are preventative in nature and prospective in application. As a result, this Court held that s. 127 could not be used to redress misconduct alleged to have caused harm to private parties or individuals…It should be observed that our Court was not considering the function of general deterrence in the exercise of the jurisdiction of a securities commission to impose fines and administrative penalties nor denying that general deterrence might play a role in this respect.

[20] The Court in Cartaway decided that "a general deterrent is preventative." It was in the Court's opinion reasonable for the B.C.S.C. to consider general deterrence as a factor, albeit not the only one, when exercising their jurisdiction to impose an administrative monetary penalty. The Court said that it was appropriate for the B.C.S.C. to consider the criminal concept of general deterrence, and its importance as a factor "will vary according to the breach of the Act and the circumstances of the person charged with breaching the Act". With reference to the C.A.M. decision and other authorities, the Court said:

General deterrence as an aid of sentencing in criminal law is well established…One of its earliest proponents was Jeremy Bentham. In his view, where the same result cannot be achieved through other modes of punishment and the net benefit to society outweighs the harm imposed on the offender, a deterrent penalty should be imposed and tailored in order to discourage others from committing the same offence. He assumes that citizens are rational actors, who will adjust their conduct according to the disincentives of deterrent penalties…In this appeal we are asked whether it is reasonable to decide that general deterrence has a role to play in the policing of capital markets. The conventional view is that participants in capital markets are rational actors. This is probably more true of market systems than it is of social behaviour. It is therefore reasonable to assume, particularly with reference to the expertise of the Commission in regulating capital markets, that general deterrence has a proper role to play in determining whether to make orders in the public interest and, if they choose to do so, the severity of those orders.

[21] I find it highly significant that the Supreme Court of Canada in Cartaway thought it appropriate for a regulatory commission to consider general deterrence in its assessment of the appropriateness of an administrative remedy, especially after they said in Asbestos that the jurisdiction to punish or remedy past conduct under s. 122 lies with the courts in contradistinction to the public interest power. If it is appropriate for an administrative commission to consider deterrence, when exercising a regulatory power, then it would be even more appropriate for the courts to consider it, when exercising their jurisdiction to punish or remedy past conduct under s. 122.

[22] R. v. Bowman and Thibaudeau was one of the first cases in Ontario in which individuals were sentenced for breaches of securities legislation. The Court decided that the maximum fine would represent a very modest license fee and would do nothing to deter others who might be similarly inclined. The Court said:

When breaches of the Act such as these occur, dealing with failure to register or to file required reports designed to protect the investing public, the dividing line between imprisonment and monetary punishment as the appropriate penalty must be in which class the offender falls – the merely careless or the designedly evasive delinquent, who is bent on defrauding the public unhindered by the watchful supervision of the Commission's investigators.

[23] The "merely careless merits a fine and the designedly evasive attracts imprisonment" principle originating in Bowman has been applied by the provincial courts in Manitoba and British Columbia. Courts have also been cognizant of avoiding the "mere licensing fee," when sentencing violators of securities legislation. Deterrence, both general and specific, and denunciation have been the primary objectives of sentencing in almost all reported court cases for violations of securities legislation including failing to file a prospectus, failing to register, insider trading, and violation of CTO's. And as the Supreme Court of Canada decided in Cartaway, discussed above, general deterrence is even an appropriate consideration for regulatory securities commissions to take into account, when imposing an administrative monetary penalty.

[24] The Bowman principle was also applied by Beaulieu J., sitting as a summary convictions appeals judge, in R. v. Funger, an Ontario case that contains parallels with Mr. Da Silva's circumstances. As such, I believe that the Bowman approach is binding on me. The Appellant in that case persisted with continuing the offending acts even after he knew he was breaching the Act. The Court stated:

The evidence was that the Appellant had been advised by his former solicitors, Ross, McBride, by a letter dated October 24, 1988, that he was acting in breach of the Act before the time of at least some of the unit sales. Such persistence in continuing in the offending acts after he knew he was breaching the Act is troublesome. To condone this type of dealing would allow other dealers to dodge disclosure requirements which serve to prevent misuse of investors' funds. The public must be protected from other like-minded dealers who attempt to take shelter under claims that they meant well, while going on to spend investments irresponsibly, unhindered by the controls of securities legislation.

[25] But the Court in Funger also said that the sentence chosen did not have to be "crushing" in order to be condemnatory and reflect the disapproval of society for the actions of the offender. The Court crafted a sentence that took into account the back and spinal problems of the Appellant, but was still more than a "license fee." This is the tempered approach that I intend to follow with respect to Mr. Abel Da Silva. I intend to weigh all of the factors that are generally taken into account in regulatory sentencing cases in securities matters described above. I will also consider the greed factor, that the offences are generally committed purely for personal gain, the necessity to protect the public, that the people involved in committing these offences tend to be older and better educated, and not comparable to young, unsophisticated offenders, therefore rehabilitation receives little weight, and the schemes involved are usually elaborately planned and prolonged, not impulsive like drug addict bank robberies for example. Whether or not there has been a guilty plea is relevant. The time and expense of prosecuting securities cases is high. Age and medical factors are sometimes considered. The vulnerability of the victims is sometimes a factor, their age and gullibility. A prior or related record has also been considered relevant.

CIRCUMSTANCES OF THE OFFENDER

[26] Mr. Da Silva is 64 years of age. He has issues with substance abuse, which are reflected in his lengthy criminal record between 1964 and 1999, following which there is a significant gap. He has been on methadone treatment in the past. He suffers from anxiety and depression. He has Hepatitis C. From his first day in provincial court he has wished to plead guilty. He was so eager to plead guilty that he almost did it before retaining counsel. He has not expressed remorse for what he has done, but he has taken responsibility by pleading guilty at the earliest opportunity. He has saved the state the time and expense of prosecuting these offences. His more recent convictions are for perjury and breach of trust. Da Silva has a history of breaching orders of the OSC and persisting in illegal trading practices with the full knowledge that his conduct is prohibited. Da Silva traded in Moncasa securities until September of 2008, which was after the charges were laid in the Shallow Oil matter. On November 15, 2011, Mr. Da Silva was sentenced after trial on the Shallow Oil matter to a total of 27 months in jail, 18 months for his role in running a boiler room operation including the illegal distribution of securities, and a consecutive sentence of nine months was also imposed for breaches of CTO's issued by the OSC. Da Silva was also sentenced to one day in jail for each of two counts of misleading OSC staff, to be served concurrently. Da Silva is currently serving this sentence at the Milhaven penitentiary. He was transferred to the Don Jail pending resolution of the current charges.

SENTENCE

[27] The Prosecution seeks a concurrent sentence of 9-12 months on the single count of trading and the single count of distributing offences. A concurrent sentence of 9-12 months is sought on the three trading offences that were committed in the face of a CTO. The prosecution submitted that the Court should distinguish cases where there is an illegal distribution of securities from cases where the illegal distribution of securities occurs in the face of one or more CTO's, and for this reason, the concurrent sentence for the three counts of breaching the CTO's should be consecutive to the concurrent sentence for the single trading and single distributing count. The Prosecution also submitted that these sentences should be served consecutively to the 27 month sentence that Da Silva is currently serving on the Shallow Oil matter.

[28] The Defence submitted that a total sentence of 18-24 months served consecutively to the 27 month sentence that the Defendant is currently serving is excessive, disproportionate, and offends the totality principle. The Defence says that Mr. Da Silva had engaged in the illegal trades of Moncasa shares during approximately the same time frame as he engaged in the Shallow Oil boiler room schemes, for which he was sentenced by Kenkel J. on November 15, 2011. For unknown reasons Mr. Da Silva was not charged with the Moncasa offences until December 20, 2011, and now the Prosecution is seeking a consecutive sentence for the Moncasa matter. The Defence says that any sentence chosen by the court should reflect what a global sentence would have been for both matters, had the Moncasa charges been brought in a more usual and timely fashion.

[29] The five charges to which Mr. Da Silva has pled guilty were not "merely careless" violations of the law. They were "designedly evasive," deliberate, and in flagrant violation of the Securities Act and CTO's issued by the OSC. As such, they attract the application of the Bowman principle and incarceration is appropriate. These are not first offences, so they would not attract periods of six months as did the offenders in R. v. Castaneda. I agree that given Mr. Da Silva's history of Securities Act violations, the range would start in these circumstances at 9 months. If all five counts involved illegal trades and distributions, I would be inclined to find that they were all related, and the sentence should be concurrent. But I agree with the Prosecution that I should distinguish cases where there is an illegal distribution of securities from cases where the illegal distribution of securities occurs in the face of one or more CTO's. The fact that Da Silva illegally distributed securities in the face of the CTO's is more egregious behaviour, and therefore he should serve an additional sentence in respect of such conduct.

[30] I am satisfied that a sentence of 9 months on each count would be sufficient in these circumstances to express the disapproval of society without "crushing" the Defendant. I am mindful of his age, medical, addiction, and psychological issues. He has also taken responsibility for what he has done by pleading guilty, and saved the state the time and expense of a long prosecution, albeit he has not expressed remorse. I am persuaded that the sentences should be concurrent on the single trading count and single distribution count, also concurrent on the violation of CTO's counts, but that the sentence for the CTO violations should be consecutive to the other two counts.

[31] I am persuaded by the Defence submissions that it would be excessive, disproportionate, and offend the totality principle for the Moncasa charges for which I am sentencing Mr. Da Silva to be served consecutively to the sentence on the Shallow Oil charges, which he is currently serving. I am mindful that Mr. Da Silva's sentence should be condemnatory and should dissuade him and others who may be like minded from contravening securities law. At the same time, a consecutive sentence would be "crushing" given Mr. Da Silva's age and other circumstances.

[32] I agree with the Defence that it appears unusual that Mr. Da Silva was not charged with the Moncasa offences until after he was sentenced on the Shallow Oil matter. There was some proximity to the timing of both sets of offences. Mr. Da Silva's involvement with the Moncasa scheme ended in September 2008, however the agreed statement of fact reveals that his cohorts remained involved until May 14, 2011. It may be that the delay in bringing charges on the Moncasa matter was occasioned by a need to complete the entire investigation first. I am not prepared to assume mala fides, as suggested by the Defence. But I do agree that if charges would have been brought in a more timely fashion in the Moncasa matter, Mr. Da Silva would have known the full jeopardy he was in before and during his trial on the Shallow Oil charges, and the opportunity would have existed to make different strategic decisions.

[33] Furthermore, the Shallow Oil offences were the more serious set of charges. Da Silva and his co-defendants were found guilty on several counts of breaching the Securities Act, including fraud, trading in securities without registration, trading in securities without a prospectus, and misleading OSC staff. This was all part of a "boiler room" operation, where the Defendants had been actively soliciting investors across Canada, using high pressure sales tactics along with false and misleading information. So if Mr. Da Silva had known about all of the charges from the outset, one would have expected that the second set of charges would have been considered as part of the overall strategy.

[34] I have decided against making a probation order for two reasons. First, my sentence on the Moncasa charges will expire before the Defendant will have completed serving his sentence on the Shallow Oil charges, and there would be no utility to being on probation at the same time as serving a penitentiary sentence. Second, I believe that Mr. Da Silva's period of incarceration is more likely to discourage him from committing similar offences in the future than any hope that he will rehabilitate himself.

[35] I have waived the victim fine surcharges.

Justice Sheila Ray

ENDNOTES

[1] RSO 1990, c. P33.

[2] RSO 1985, c. C-46.

[3] Ibid., s. 718 et seq.

[4] T.L. Archibald, K.E. Jul, and K.W. Roach, Regulatory and Corporate Liability: From Due Diligence to Risk Management (Aurora: Canada Law Book Inc., looseleaf), p. 12-6-12-7; Dr. R. Libman J., Libman on Regulatory Offences in Canada (Salt Spring Island, B.C.: Earlscourt Legal Press, looseleaf), p. 11-17; See also R. Libman, Sentencing Purposes and Principles for Provincial Offences: A Research Paper Prepared for the LCO (Summer 2010); and LCO, Modernization of the Provincial Offences Act: A New Framework and Other Reforms (Final Report, August 2011). Online: www.lco-cdo.org.

[5] Archibald, note 4, pp. 12-8 – 12-9. See also R. Libman, Regulatory Offences and Principles of Sentencing: Is the "Patchwork Quilt" in need of Reshaping and Reform? (Doctoral Dissertation, York University, May 2011).

[6] Libman, note 4, pp. 6-62 - 6-63.

[7] R. v. Eric O'Brien, Abel Da Silva, Abraham Herbert Grossman, and Shallow Oil & Gas Inc., Unreported OCJ Decision, May 18, 2011, para. 5.

[8] W. D. Drinkwater and J. Douglas Ewart, Ontario Provincial Offences Procedure (Toronto: Carswell, 1980), pp. 8 – 18.

[9] R. v. Sault Ste. Marie, [1978] 2 S.C.R. 1299.

[10] Libman, note 4, pp. 11-9 – 1-10. See also R. v. Virk, [2002] O.J. No. 4102 and R. v. Wells, [2003] O.J. No. 2025.

[11] R. v. C.A.M., [1996] 1 S.C.R. 500.

[12] Archibald, note 4. pp. 12-7 – 12-12 and Libman, note 4, pp. 11-20 – 11-25.

[13] R. v. Wholesale Travel Group Inc., [1991] 3 S.C.R. 154.

[14] Archibald, note 4, c. 12 and Libman, note 4, pp. 11-1 – 11-27.

[15] Libman, note 4, pp. 11-10 – 11-12.

[16] R. v. Wall, [2000] O.J. No. 5447 (C.J.).

[17] Note 13, p. 260.

[18] (1982), 2 C.C.C. (3d) 287 (Ont. C. A.).

[19] Archibald, note 4, p. 12 – 10.

[20] Note 18, p. 294.

[21] R. v. Cotton Felts Ltd., [2008] B.C.J. No. 824.

[22] Ibid., para. 49.

[23] R. v. Abbott, 2002 ABPC 136, [2002] A.J. No. 1071.

[24] Canadian Securities Regulation (Markham: Butterworths, 2003).

[25] Ibid., p. 1.

[26] Ibid., pp. 2 – 3.

[27] Re Mithras Management Ltd., 1990 LNONOSC 119.

[28] Ibid., p. 5.

[29] Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557.

[30] Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission), 2001 SCC 37, [2001] 2 S.C.R. 132. For a thoughtful discussion of this case and its implications for the public interest power, see Professor Anita Anand's article, Carving the Public Interest Jurisdiction in Securities Regulation: Contributions of Justice Iacobucci (UTLJ, vol. 57, Number 2, Spring 2007), pp. 293 – 313.

[31] Ibid., para. 42 and 43.

[32] Re Cartaway Resources Corp., 2004 SCC 26, [2004] 1 S.C.R. 672.

[33] Ibid., para. 70.

[34] Ibid., para 58.

[35] Ibid., para. 61.

[36] Ibid.

[37] Note 11.

[38] Note 32, paras. 53 and 55.

[39] R. v. Bowman and Thibaudeau, (1949), 92 C.C.C. 380 (Ont. Mag. Ct.).

[40] R. v. Perch, [2006] M.J. No. 162; Manitoba (Securities Commission) v. Bennet, 2007 MBPC 22; R. v. Edgar, 2000 BCPC 215.

[41] R. v. Bowman, note 39; R. v. Funger, [1995] O.J. No. 1119 (S.C.); "jurisdiction of choice" R. v. Harper, (2003), 232 D.L.R. (4th) 738 (Ont. C.A.); R. v. Von-Anhalt and Von-Anhalt, [2007] O.J. No. 2745 (C.J.); R. v. Woods, (1994) 88 C.C.C. (S.C.J.), leave to appeal denied (1994), 89 C.C.C. (3d) 499 (Ont. C. A.).

[42] R. v. Lau, [1997] O.J. No. 2539 (C.J.); R. v. Harper, note 41; R. v. Wall, [2000] O.J. No. 5447 (C.J.); R. v. Castaneda, 2008 ONCJ 69, [2008] O.J. No. 712 (C.J.); R. v. Von-Anhalt, note 41; and R. v. Boyle, note 23.