Topic: Securities regulatory decisions

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Motions for Further Disclosure in OSC Proceedings: Privilege, Relevance and Proportionality

Linda FuerstBy Linda Fuerst on Posted in Securities regulatory decisions
In a recent decision of the OSC in Re Caldwell Investment Management Ltd. (October 12, 2018), a hearing panel (the “Panel”) denied a motion by Caldwell Investment Management Inc. (“Caldwell”) for further pre-hearing disclosure from OSC Staff. The motion was made in the context of an upcoming enforcement proceeding alleging, among other things, that Caldwell … Continue reading

Even “Small Frauds” May Warrant the Imposition of Significant Sanctions by Securities Regulators

Peter Tae-Min ChoiBy Peter Tae-Min Choi on Posted in Securities regulatory decisions, White collar crime
In Re Davis, 2018 BCSECCOM 284, the British Columbia Securities Commission upheld permanent market prohibitions against Mr. Davis who committed fraud on one investor in the aggregate amount of (only) $7,000. Background Mr. Davis, who was never registered under the Securities Act (B.C.), purported to sell shares that he did not own to an investor … Continue reading

From boom to busted: TMF deems PlexCoins as investment contracts

Securities litigation and enforcementBy Saam Pousht-Mashhad on Posted in Other developments, Securities regulatory decisions
The legal noose is tightening around the necks of rogue cryptocurrency issuers in Quebec. PlexCorps’s legal troubles, as covered in our previous post, have deepened. In Autorité des marchés financiers c. PlexCorps, 2018 QCTMF 91, the Tribunal des Marchés Financier (TMF) qualified PlexCoin as an investment contract within the meaning of Quebec’s Securities Act. This … Continue reading

Ontario Court Imposes Custodial Sentence for Securities Act Offences

Ted BrookBy Ted Brook on Posted in Other developments, Securities regulatory decisions, White collar crime
The Ontario Superior Court of Justice has released what appears to be the final chapter in the Ontario Securities Commission’s (OSC) prosecution of Daniel Emerson Tiffin and Tiffin Financial Corporation. Background In July 2014, the Ontario Securities Commission’s administrative proceedings against Rezwealth Financial Services Inc., Pamela Ramoutar, Justin Ramoutar, Tiffin Financial Corporation, Daniel Tiffin, 2150129 … Continue reading

When do inferences become unreasonable and contrary to the rules of procedural fairness?

Caroline LaroucheBy Caroline Larouche on Posted in Other developments, Securities regulatory decisions
As there is almost never direct, ‘smoking gun’ type evidence of insider trading, securities regulators often rely on circumstantial evidence in enforcement proceedings, from which they invite the specialized securities tribunals to draw inferences. What is the line not to cross for these inferences to become unreasonable and contrary to rules of procedural fairness? Referring … Continue reading

Targets of investigations by Quebec’s security regulator not protected by Charter

Sophie MelchersBy Sophie Melchers on Posted in Securities regulatory decisions
The creator of a new cryptocurrency made headlines last year for all the wrong reasons as the target of an investigation by the Autorité des marchés financiers (AMF), Quebec’s securities regulator, and of various court orders. Dominic Lacroix fought back against the AMF and the judgment in Autorité des marchés financiers v. Lacroix, 2018 QCCS 3894 is compelling for … Continue reading

Quebec Court of Appeal clarifies the essential elements of the offences of market manipulation and complicity under the Quebec Securities Act

Sophie MelchersBy Sophie Melchers on Posted in Other developments, Securities regulatory decisions
On September 5, 2018, the Quebec Court of Appeal rendered a unanimous judgment in Autorité des marchés financiers c. Forget, 2018 QCCA 1419 (Forget) clarifying the essential elements of the mens rea offence of market manipulation set out at section 195.2 of the Quebec Securities Act (QSA): 195.2. Influencing or attempting to influence the market … Continue reading

SEC to Resume Administrative Law Proceedings Following Supreme Court Ruling

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Securities regulatory decisions
In response to the U.S. Supreme Court’s June 21, 2018 decision in Lucia v. SEC, No. 17-130, holding that administrative law judges (ALJs) at the U.S. Securities and Exchange Commission (SEC) had been improperly appointed because they had been appointed by SEC staff rather than the President or the full SEC, which was discussed in … Continue reading

Ontario Securities Commission confirms test for severance

Fahad SiddiquiBy Fahad Siddiqui on Posted in Other developments, Securities regulatory decisions, White collar crime
In a decision issued on July 24, 2018, the Ontario Securities Commission held that the test to determine whether a respondent’s case should be severed and heard separately is the same test used in criminal proceedings. The decision, Hutchinson (Re), 2018 ONSEC 40, is available here. Allegations of insider trading and insider tipping The OSC … Continue reading

U.S. Supreme Court Holds SEC Administrative Law Judges Improperly Appointed

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Securities regulatory decisions
On June 21, 2018, the U.S. Supreme Court ruled that administrative law judges (ALJs) at the U.S. Securities and Exchange Commission (SEC) had been improperly appointed because they qualified as “Officers of the United States” under the “Appointments Clause” of the U.S. Constitution, who under the Constitution may be appointed only by the President, a … Continue reading

Alberta Securities Commission Policy 15-601: Credit for Exemplary Cooperation in Enforcement Matters – New Provision for No-Contest Settlement Agreements

Steven LeitlBy Steven Leitl on Posted in Other developments, Securities regulatory decisions
On October 25, 2017, we wrote about the Alberta Securities Commission’s (ASC) new Policy 15-601 which “explains the use of discretion by ASC staff when considering the appropriate enforcement action and assessing the appropriate sanction for misconduct.”  A link to the publication is here. As we predicted in October, the ASC recently issued a press … Continue reading

Divisional Court confirms that interlocutory OSC orders not eligible for appeal, judicial review

Andrew McCoombBy Andrew McCoomb on Posted in Other developments, Securities regulatory decisions, White collar crime
In the recent decision of Cheng v Ontario Securities Commission, 2018 ONSC 2502, the Divisional Court held that an interlocutory order of the OSC was not subject to challenge through an appeal or judicial review. Background The OSC commenced enforcement proceedings against Benedict Cheng in April 2017 on allegations of insider tipping.  Cheng brought a … Continue reading

OSC Panel Approves Settlement Agreement for Insider Tipping Without Profit Disgorgement or Administrative Penalty

Erika AnschuetzBy Erika Anschuetz on Posted in Other developments, Securities regulatory decisions, White collar crime
The Ontario Securities Commission’s recent decision in Re Hutchinson confirmed the important role of cooperation with Commission Staff in reducing sanctions for breaches of Ontario’s securities law. Background Donna Hutchinson worked as a legal assistant at a large Toronto law firm, assisting with merger and acquisition transactions. Through the course of her work, Ms. Hutchinson … Continue reading

U.S. Securities and Exchange Commission Proposes “Best Interest” Standard for Retail Broker Dealers

Thomas J. HallBy Thomas J. Hall on Posted in Cross border issues, Legislation, rules and policies, Securities regulatory decisions
On April 18, 2018, the U.S. Securities and Exchange Commission (“SEC”) announced proposed rules that would require broker-dealers to act in the best interests of their retail clients when recommending investments. The SEC opened the proposed rules to a 90 day comment period. This announcement follows a March 15, 2018 decision by the U.S. Fifth … Continue reading

The OSC’s Jurisdiction on an Appeal from a Decision of a Director: Re Dhillon (2018) ONSEC 14

Linda FuerstBy Linda Fuerst on Posted in Legislation, rules and policies, Securities regulatory decisions
In Re Dhillon, the Director of Compliance and Registrant Regulation (“Director”) of the Ontario Securities Commission (“OSC” or “Commission”) refused Dhillon’s application for registration under s. 27 of the Ontario Securities Act (the “Act”) on the ground that Dhillon lacked both the proficiency and integrity for registration, and that his registration would otherwise be objectionable … Continue reading

Civil Forfeiture in the Securities Context

Geoff MensBy Geoff Mens on Posted in Other developments, Securities regulatory decisions, White collar crime
Administrative fines are are regularly imposed by the Ontario Securities Commission (the OSC) in enforcement proceedings as sanctions for violations of Ontario securities law. Less well-known, but equally important, is the ability of the OSC to require wrongdoers to forfeit to the Crown the ill-gotten proceeds of unlawful activities. This post outlines the process by … Continue reading

Bustle without the Hustle not an “Act in Furtherance of a Trade” under the Ontario Securities Act

Danny UrquhartBy Danny Urquhart on Posted in Other developments, Securities regulatory decisions
A recent decision by the Ontario Court of Justice provides lessons about the scope of the Ontario Securities Commission (OSC)’s powers to regulate acts “in furtherance of a trade”.  The OSC’s case was against two individuals who helped create a website for a new company.  The website included an investors relations page which stated that … Continue reading

Aurora/CanniMed: Canadian securities regulators provide guidance on takeover bids in Canada – Expect to see more hard lock-ups and fewer tactical poison pills

Walied SolimanHeidi ReinhartJoe BrickerBy Walied Soliman, Heidi Reinhart and Joe Bricker on Posted in Other developments, Securities regulatory decisions
Key takeaways: expect to see an increased use of hard lock-ups (that is, lock-ups in which a shareholder agrees to tender shares even if a superior bid comes along), which will provide bidders with reduced risk during the new 105-day bid period well-structured hard lock-ups do not necessarily result in target shareholders being joint actors … Continue reading

Federal court holds that CFTC can regulate virtual currencies as commodities

Robert A. SchwingerBy Robert A. Schwinger on Posted in Cross border issues, Other developments, Securities regulatory decisions
On March 6, 2018, in a fraud proceeding involving a virtual currency product, a New York federal court held that virtual currencies can be regulated by the Commodity Futures Trading Commission (CFTC) as commodities. Commodity Futures Trading Commission v. McDonnell (E.D.N.Y. Mar. 6, 2018).[1] This ruling marks the first federal judicial endorsement of the CFTC’s … Continue reading

The Ontario Court of Appeal Affirms the Test for Tippee Liability: Finkelstein v. Ontario Securities Commission

Linda FuerstErika AnschuetzBy Linda Fuerst and Erika Anschuetz on Posted in Securities regulatory decisions
In the recently released decision in Finkelstein v. Ontario Securities Commission, the Ontario Court of Appeal (the Court) considered for the first time the definition of “person in a special relationship with an issuer” found in s. 76(5)(e) the Securities Act (the Act) as it applies to successive tippees who possess material, non-public information about … Continue reading

The Principle of Parity in OSC Settlements Does Not Preclude Disparity Where Warranted: Techocan International Co. Ltd. (Re), 2017 ONSEC 44

Linda FuerstJacob WilsonBy Linda Fuerst and Jacob Wilson on Posted in Securities regulatory decisions
The Ontario Securities Commission’s decision in Techocan International Co. Ltd. (Re), 2017 ONSEC 44 affirms that absent exceptional and compelling circumstances, a respondent cannot resile from a settlement agreement on the basis of a co-respondent’s subsequent settlement on terms perceived to be more favourable. Facts On March 23, 2016, Staff of the Ontario Securities Commission … Continue reading

OSC orders trading platform systems upgrade

Andrew McCoombBy Andrew McCoomb on Posted in Other developments, Securities regulatory decisions
On November 13, 2017, Staff of the Ontario Securities Commission brought an application seeking a temporary order suspending the registration of Omega Securities Inc. (Omega) as well as trading in two alternative trading systems run by Omega called Omega ATS and Lynx ATS, pending the outcome of a hearing on the merits. Staff alleged that … Continue reading

Supreme Court Denies Leave to Applicants Seeking to Challenge Bifurcation of OSC Proceedings

Geoff MensBy Geoff Mens on Posted in Securities regulatory decisions
The Supreme Court of Canada recently denied leave to appeal the Court of Appeal for Ontario’s decision in Ontario Securities Commission v. MRS Sciences Inc. (MRI Sciences), which considered the bifurcated nature of proceedings before the Ontario Securities Commission (the OSC). The decision is significant for its judicial endorsement of the OSC’s current two-phased approach … Continue reading

SEC action against hedge fund raises difficult questions for investment advisers

Kevin James HarnischBy Kevin James Harnisch on Posted in Legislation, rules and policies, Securities regulatory decisions
The SEC recently extracted a settlement from a hedge fund that raises difficult compliance-related questions for investment advisers. On August 21, 2017, Deerfield Management Company L.P. (“Deerfield”), a hedge fund and registered investment adviser, paid approximately $4.6 million to settle SEC charges that Deerfield failed to create and enforce policies and procedures reasonably designed to … Continue reading
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