Topic: Other developments

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Alberta Court of Appeal considers an investment scheme

Jordan DeeringSteven LeitlBy Jordan Deering and Steven Leitl on Posted in Civil claims, Other developments
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

Alberta Securities Commission signs Enhanced Memorandum of Understanding to strengthen cross-border enforcement cooperation

Steven LeitlBy Steven Leitl on Posted in Cross border issues, Legislation, rules and policies, Other developments
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

Ontario Securities Commission v York Rio Resources Inc.: Enforcing OSC Orders as Court Judgments outside of Ontario

Peter Tae-Min ChoiBy Peter Tae-Min Choi on Posted in Other developments, Securities regulatory decisions
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

Liability Rumblings Along the Blockchain

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Other developments
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

Sino-Forest Cont’d: Cultural Practices do not Excuse Illegal Acts

Peter Tae-Min ChoiBy Peter Tae-Min Choi on Posted in Other developments, Securities regulatory decisions, White collar crime
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

The Test on a Motion to Strike Pleadings in Proceedings Before the Ontario Securities Commission

Linda FuerstBy Linda Fuerst on Posted in Other developments, Securities regulatory decisions
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

Clearing the Way: “Ice Breaker” Settlements in Class Actions

Linda FuerstBy Linda Fuerst on Posted in Class actions, Other developments
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

IIROC’s 2018 Enforcement Report: Strengthening Enforcement Authority Across Canada

Ted BrookBy Ted Brook on Posted in Legislation, rules and policies, Other developments
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

The AMF is not the sole arbiter of what is relevant and what should be disclosed

Sophie MelchersCaroline LaroucheAndres C. GarinBy Sophie Melchers, Caroline Larouche and Andres C. Garin on Posted in Other developments, Securities regulatory decisions
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

Large and generous interpretation of “investment contract” and “distribution” under the Quebec Securities Act: AMF v. Desmarais, 2019 QCCA 898

Sophie MelchersBy Sophie Melchers on Posted in Other developments, Securities regulatory decisions
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

Harrington v IIROC: No Equitable Duty Owed by Public Sector Regulators to Disclose Information to Victims of Wrongdoing

Linda FuerstPeter Tae-Min ChoiBy Linda Fuerst and Peter Tae-Min Choi on Posted in Other developments, Securities regulatory decisions
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

MFDA Annual Enforcement Report: Trends in Mutual Fund Dealer Regulation

Peter Tae-Min ChoiBy Peter Tae-Min Choi on Posted in Legislation, rules and policies, Other developments
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

Ontario Securities Commission awards whistleblowers $7.5 million in first ever payout

Peter Tae-Min ChoiBy Peter Tae-Min Choi on Posted in Other developments, Securities regulatory decisions
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

US Tenth Circuit holds SEC can apply antifraud provisions extraterritorially in certain situations

Seth M. KruglakBy Seth M. Kruglak on Posted in Cross border issues, Other developments, White collar crime
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

SEC Takes Aim at Digital Tokens and Smart Contracts

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Other developments
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

The Quebec Court of Appeal qualifies litigation funding agreement as a plan of arrangement

Saam Pousht-MashhadSylvain RigaudBy Saam Pousht-Mashhad and Sylvain Rigaud on Posted in Other developments
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

The Quebec Court of Appeal rules that dissident rights do not apply to trust unitholders

Saam Pousht-MashhadBy Saam Pousht-Mashhad on Posted in Other developments, Securities regulatory decisions
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

Motion Judge Erred in Law by Approving Class Counsel’s Fees

Fahad SiddiquiBy Fahad Siddiqui on Posted in Class actions, Other developments
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

Be Careful What You Say – SEC successfully concludes enforcement proceedings against robo-advisors for false advertising and misleading disclosures

Andrew McCoombBy Andrew McCoomb on Posted in Cross border issues, Other developments, Securities regulatory decisions
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

Personal jurisdiction in the age of blockchain

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Other developments
As commercial activity increasingly intertwines with applications of blockchain technology with participants around the world, courts have had to grapple with the personal jurisdiction implications of such arrangements. Will participants in these blockchain applications based outside the United States find themselves subject to U.S. jurisdiction when disputes arise, based on how they have conducted their … Continue reading

Forum Selection Clauses in Delaware Corporate Charters Invalid as to Securities Claims

Thomas J. HallBy Thomas J. Hall on Posted in Cross border issues, Other developments
The Delaware Chancery Court recently faced a challenge to forum selection clauses in certificates of incorporation of three Delaware corporations that required shareholder claims under the Securities Act of 1933 be brought in U.S. federal court, thereby barring the state forum.  For securities cases, defendant corporations generally prefer the U.S. federal courts which are viewed … Continue reading

Ontario Court of Appeal Grants Leave to Appeal Tiffin Decision: Will Determine Role of the “Family Resemblance” Test in Defining Securities under the Securities Act

Erika AnschuetzBy Erika Anschuetz on Posted in Other developments, Securities regulatory decisions
It seems that the saga of the Ontario Securities Commission’s prosecution of Daniel Emerson Tiffin and Tiffin Financial Corporation is not over yet.  On November 28, 2018 (2018 ONCA 953), the Ontario Court of Appeal granted leave to appeal the May 15, 2018 merits decision of Charney, J which rejected the “family resemblance” test and … Continue reading

Findings of Fraud Constitute “Other Good Reason” to Order Security for Costs

Erika AnschuetzBy Erika Anschuetz on Posted in Other developments, White collar crime
Hung v Ontario Securities Commission, 2018 ONSC 6729 (Div Ct) The Divisional Court has released yet another chapter in the saga of one of the largest frauds in Canadian history.  In 2017, after a 188-day merits hearing, the Ontario Securities Commission (the Commission) released its decision concerning allegations of fraud against Sino-Forest Corporation (Sino-Forest) and … Continue reading

Stop the presses! Canadian securities regulators raise concerns about press releases and other promotional activities

Katherine PrusinkiewiczBy Katherine Prusinkiewicz on Posted in Other developments, Securities regulatory decisions
The Canadian Securities Administrators (CSA) have issued a notice regarding misleading promotional activities by issuers.  The notice includes examples such as press releases, presentations, social media posts and other marketing materials that provide insufficient or unbalanced information or that include unsubstantiated claims about the issuer. Problematic Promotional Practices Examples of potentially misleading promotional activities identified … Continue reading
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