New Reporting Requirements On November 14, 2019, the Investment Industry Regulatory Organization of Canada (IIROC) amended its Dealer Member Rules (the Rules) to address reporting of cybersecurity incidents. The amendment, which takes effect immediately, requires all investment dealers regulated by IIROC to report all cybersecurity incidents. The Rules define a “cybersecurity incident” as “any act … Continue reading
Trust and transparency have been challenging in the cannabis industry: whether related to product trust and transparency or to public disclosure of conflicts of interest and the need for trust and transparency has not gone unnoticed by securities regulators. In reviewing disclosure relating to M&A and other significant corporate transactions by cannabis issuers, the Canadian … Continue reading
In June 2013, the AMF laid two penal charges against Mr. Forget, the president and CEO of Clemex Technologies, a public company, alleging that he would have manipulated its stock close to five years earlier in 2008. A few weeks later, the AMF published a press release announcing the filing of the charges and specifying … Continue reading
On July 3, 2019 the Ontario Securities Commission (“OSC”) released its decision in Re Natural Bee Works Apiaries Inc., 2019 ONSEC 23 (“Natural Bee”). Natural Bee provides useful guidance concerning proof of falsity and participation in a fraudulent scheme under section 126.1(1) of the Ontario Securities Act (the “Act”). Background In Natural Bee, OSC Staff … Continue reading
Two ordained ministers are among the five named individual Respondents who have settled with the Alberta Securities Commission (the Commission) in Re Lutheran Church-Canada, the Alberta-British Columbia District, 2019 ABASC 140. The individual Respondents were all involved in investment funds run by the Lutheran Church-Canada, Alberta-British Columbia District (the District), which became insolvent in 2015. The individual Respondents admitted … Continue reading
The Alberta Court of Appeal has provided helpful analysis relating to personal liability of actors in investment schemes: personal liability of principals and claims under the Securities Act. Facts Charles Ryan promoted a plan to develop land through various corporate vehicles. Markus Abt invested $800,000 after speaking with an investment advisor with Sun Life. Mr. … Continue reading
In July 2019, the Alberta Securities Commission (ASC) joined other signatories, including the Ontario Securities Commission and the United States Securities and Exchange Commission (SEC), by signing the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (EMMoU). This step by the ASC reflects … Continue reading
On May 21, 2019, in Ontario Securities Commission v York Rio Resources Inc., 2019 BCSC 776, the British Columbia Supreme Court (BCSC) enforced Ontario Securities Commission (OSC) disgorgement orders as court judgments from another province. Background A joint investigation was conducted by the OSC and the British Columbia Securities Commission (BC Commission) into an $18.2 … Continue reading
In his Blockchain Law column, Robert A. Schwinger writes: When parties interact in transactions conducted via blockchain technology, they may find themselves in relationships to one another that the law has not yet had the opportunity to clearly define. Courts, commentators, governmental officials, litigants and legislatures are now exploring which participants in various kinds of blockchain-based activities … Continue reading
In Hung et al v Ontario (Securities Commission), 2019 ONSC 3423, the Divisional Court dismissed an appeal brought by four senior officers of Sino-Forest Corporation (the Appellants) in one of Canada’s largest frauds in history. The Appellants sought to set aside the decision on the merits of a panel of the Ontario Securities Commission (OSC) … Continue reading
In (Re) El-Bouji, 2019 ONSEC 19, the Ontario Securities Commission (OSC) determined that the test on a motion to strike portions of an affidavit filed by Staff in response to the respondent’s motion challenging the Commission’s jurisdiction to adjudicate certain allegations in a Notice of Hearing and Statement of Allegations is essentially the same as … Continue reading
In a recent class action settlement approval hearing, Justice Belobaba of the Ontario Superior Court affirmed the value of early “ice breaker” settlements in complex class actions involving multiple defendants. In such a settlement, one defendant settles ahead of the rest for what may be viewed as a “token” amount, along with a pledge to … Continue reading
Overview On May 16, 2019, the Investment Industry Regulatory Organization of Canada (IIROC) published its 2018 Enforcement Report (the Report). The Report summarizes IIROC’s enforcement activities in 2018 and provides an update on the progress of IIROC’s enforcement priorities, chief among which has been the strengthening of IIROC’s legal authority and enforcement powers across Canada. … Continue reading
In AMF v. TMF, Baazov, et al. (Court File No. 500-11-052989-171), the Quebec Superior Court confirmed that the Financial Markets Administrative Tribunal (the Tribunal) has the power to order the Autorité des marchés financiers (AMF), Quebec’s securities regulator, to disclose documents to individuals against whom the AMF is seeking freeze orders and cease-trade orders in … Continue reading
In its recent decision (AMF v. Desmarais), the Court of Appeal upheld the conviction of a Montreal lawyer who played a central role in the distribution of investment contracts without a prospectus and who acted as a dealer without being registered as such, while reducing his prison sentence and fine. Facts of the case Jean-Pierre … Continue reading
On December 31, 2018, the Ontario Superior Court of Justice dismissed an application by Harrington Global Opportunities Fund (Harrington) for a Norwich order against the Investment Industry Regulatory Organization of Canada (IIROC). Harrington sought the order to compel IIROC to provide information that would identify parties which had allegedly been involved in manipulating the market … Continue reading
The Mutual Fund Dealers Association of Canada (MFDA) recently published its 2018 Annual Enforcement Report (the Report), highlighting key enforcement activities and developments over the past year. The MFDA commenced 136 enforcement proceedings in 2018 by Notice of Hearing or Notice of Settlement Hearing, a record number for the self-regulatory organization (SRO). The SRO attributes … Continue reading
On July 14, 2016, the Ontario Securities Commission (OSC) launched the Whistleblower Program (the Program). Under the Program, individuals that provide information on violations of Ontario’s securities law to the OSC are eligible for awards of between 5% and 15% of total monetary sanctions or voluntary payments. The maximum amount a whistleblower can collect is … Continue reading
One trend running through recent U.S. Supreme Court decisions is a sense of caution in expanding the scope of U.S. law to extraterritorial activities. To that end, the Court has instructed that a statute does not apply extraterritorially unless the text clearly shows the U.S. Congress intended such a result. Notably, the Tenth Circuit recently … Continue reading
In his Blockchain Law column, Robert A. Schwinger discusses a wave of new enforcement actions brought by the SEC targeting blockchain-based digital token ventures under a variety of provisions in the securities laws. These proceedings show the breadth of the approaches the SEC is taking toward enforcement in this area, perhaps most notably in one case … Continue reading
Overview In Arrangement relatif à 9354-9186 Québec inc. (Bluberi Gaming Technologies Inc.), the Quebec Court of Appeal characterized a litigation funding agreement in the context of CCAA proceedings as a plan of arrangement, ordering a creditor vote for its approval. Background Bluberi Gaming Technologies Inc. (together with Bluberi Group inc. as Bluberi) operated a gaming … Continue reading
On January 21, 2019, the Quebec Court of Appeal ruled in O’Leary Funds Management c. Boralex Inc., 2019 QCCA 84, that dissident rights under business corporations acts do not apply to trusts. Unitholders of a trust must therefore ensure that their rights are recognized under the trust agreement or the Civil Code of Quebec. The … Continue reading
The Court of Appeal for Ontario recently set aside a decision approving the legal fees of class counsel on the condition that counsel would donate 40% of the approved fees to charity. The appeal provides useful guidance for practitioners on fee approval motions in class actions. The Settlement Agreement Welsh v. Ontario, 2019 ONCA 41 … Continue reading
On December 21, 2018, the Securities and Exchange Commission (SEC) settled proceedings against two robo-advisors for making false statements about investment products and publishing misleading advertising. The proceedings were the SEC’s first enforcement actions against robo-advisors, providing guidance on some of the disclosure issues robo-advisors may face going forward. Wealthfront proceedings The first action involved … Continue reading