Topic: Securities regulatory decisions

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Supreme Court of Canada recognizes cross-border challenges of modern securities regulation: the “Real and Substantial Connection” test applied in Sharp v. Autorité des marchés financiers, 2023 SCC 29

Photo of Linda FuerstPhoto of David SeevaratnamBy Linda Fuerst and David Seevaratnam on Posted in Securities regulatory decisions
In Sharp v. Autorité des marchés financiers, 2023 SCC 29, the Supreme Court of Canada recognized the transnational nature of modern securities regulation in holding there was a “real and substantial connection” between alleged perpetrators of a “pump-and-dump” scheme and Québec. This connection allowed the province’s Financial Markets Administrative Tribunal (FMAT) to assume jurisdiction over … Continue reading

Sauce for the Goose, Sauce for the Gander:  Denial of Staff’s Adjournment Request in Valentine (Re), 2023 ONCMT 33

Photo of Linda FuerstBy Linda Fuerst on Posted in Securities regulatory decisions
In reasons released October 5, 2023, the Capital Markets Tribunal summarily dismissed a motion by OSC Staff to adjourn a 15 day hearing on the merits approximately three weeks before it was scheduled to commence. The adjournment was requested due to the departure of the OSC senior litigation counsel who had had carriage of the … Continue reading

Ontario’s Capital Markets Tribunal finds it does not have jurisdiction to “supervise” OSC investigation orders

Photo of David SeevaratnamPhoto of Lauren RennieBy David Seevaratnam and Lauren Rennie on Posted in Securities regulatory decisions, Uncategorized
In Binance Holdings Limited (Re), 2023 ONCMT 27, Ontario’s new Capital Markets Tribunal (the Tribunal) clarified that it does not have the jurisdiction to revoke an investigation order made by the Ontario Securities Commission (OSC). Background In May 2023, the OSC issued an investigation order under s. 11 of the Ontario Securities Act[1](the Act) to … Continue reading

What’s the Difference?  Ontario Divisional Court finds trading in Contracts for Difference amounts to trading in unregistered securities: VRK Forex & Investments Inc. v Ontario Securities Commission, 2023 ONSC 3895

Photo of David SeevaratnamPhoto of Erika AnschuetzBy David Seevaratnam and Erika Anschuetz on Posted in Securities regulatory decisions
Ontario’s Divisional Court has upheld a decision of the new Capital Markets Tribunal, finding an over-the-counter financial instrument to meet the definition of “investment contract” pursuant to the Securities Act. Background The appellants conducted business trading in Contracts for Difference (CFDs), a financial instrument offered through online trading platforms “over the counter” rather than on … Continue reading

Solicitor Client Privilege Claims over Seized Documents D.L. v. Autorité des marchés financiers, 2022 QCCS 2157

Photo of Sophie MelchersBy Sophie Melchers on Posted in Securities regulatory decisions
In D.L. v. Autorité des marchés financiers (AMF), the Superior Court of Quebec ruled on solicitor client privilege claims made by D.L. to resist disclosure of documents seized by the AMF at D.L.’s home in the context of an ongoing pump and dump investigation. The Court recalled the following principles: The burden of establishing solicitor … Continue reading

Fraudulent Transaction Offence at s. 199.1 Quebec Securities Act : a Mens Rea Offence Autorité des marchés financiers c. Goyette 2022 QCCQ 2872

Photo of Sophie MelchersBy Sophie Melchers on Posted in Securities regulatory decisions
In late May 2022, the Court of Quebec Criminal and Penal Division issued its decision in AMF v. Goyette. It is significant because it is the very first decision deciding that the market manipulation offence set out at section 199.1 of the Quebec Securities Act (QSA) is a full mens rea offence, requiring the prosecuting regulator, … Continue reading

What constitutes or not MNPI? Kitmitto (Re), 2022 ONCMT 12

Photo of Sophie MelchersPhoto of Linda FuerstBy Sophie Melchers and Linda Fuerst on Posted in Securities regulatory decisions
In late May 2022, in one of the first decisions of the new Ontario Capital Markets Tribunal, the Tribunal issued its decision in Kitmitto (Re), an insider tipping and trading case.  In Kitmitto, Ontario Securities Commission (OSC) Staff alleged the existence of a tipping chain in which multiple individuals acquired material non public information (MNPI) … Continue reading

Jurisdiction of Quebec Court in Class Action against Ontario Reporting Issuer on account of Fault Committed in Quebec and Injury Suffered in Quebec

Photo of Sophie MelchersBy Sophie Melchers on Posted in Securities regulatory decisions
Representative Plaintiffs Jon-Erik and Nicole Dillon (the Dillons) sought authorization from the Superior Court of Quebec (Court) to bring a class action against Wayland Group Corp (Wayland) under the general civil liability regime in Quebec (Art. 1457 Civil Code of Quebec (CCQ)). Wayland is a federal licensed producer and distributor of cannabis with production facilities … Continue reading

Objective Reliability and Materiality: Wong v Pretium Resources Inc., 2022 ONCA 549

Photo of Linda FuerstPhoto of David SeevaratnamBy Linda Fuerst and David Seevaratnam on Posted in Securities regulatory decisions
In this decision the Ontario Court of Appeal upheld Justice Belobaba’s dismissal of a securities class action on a motion for summary judgment on the basis that the defendant issuer had not made a misrepresentation by omission. The respondent, Pretium Resources (Pretium) is a mineral exploration company listed on the TSX and NYSE that undertook … Continue reading

Cease Trade and Freezing Orders to Stop a Pump and Dump Scheme Autorité des marchés financiers c. Kamaneh, 2022 QCTMF 18

Photo of Sophie MelchersBy Sophie Melchers on Posted in Securities regulatory decisions
The facts of this case are simple. The Quebec securities regulator, the Autorité des marchés financiers (AMF), alleged that between March 2021 and January 2022, Ramy Kamaneh and Mohamed Kada Mesli : participated in a market manipulation / pump and dump scheme targeting the securities of the companies Majic Wheels, ICOA and All American Pet … Continue reading

Application of Section 4.3 of the SPPA in Matters Before OSC Hearing Panels

Photo of Linda FuerstBy Linda Fuerst on Posted in Securities regulatory decisions
In Canada Cannabis Corporation (Re), 2022 ONSEC 9 the Ontario Securities Commission (OSC) was called upon to decide whether section 4.3 of the Statutory Powers Procedure Act (SPPA) operated to extend the term of office of a Commissioner (the Commissioner) until completion of a motion by a respondent in an OSC enforcement proceeding and an … Continue reading

Kennedy v. Akumin Inc. et al, 2022 ONSC 2571: The New Framework for Carriage Fights in Ontario

Photo of Linda FuerstPhoto of David SeevaratnamBy Linda Fuerst and David Seevaratnam on Posted in Securities regulatory decisions
The decision of Kennedy v Akumin Inc. et al, 2022 ONSC 2571 resolves a carriage motion pursuant to section 13.1 of the amended Ontario Class Proceedings Act, 1992 (CPA), involving competing class actions (the “Kennedy action” and the “Longair action”) each of which asserted a statutory secondary market misrepresentation cause of action pursuant to the … Continue reading

Solar Income Fund Inc. (Re), 2022 ONSEC 2:  Determining when a “Trading and Advising Relationship” Exists

Photo of Stephen TaylorBy Stephen Taylor on Posted in Securities regulatory decisions
In Solar Income Fund Inc. (Re), 2022 ONSEC 2 (the Solar Decision)[1] an OSC Hearing Panel considered, among other things, section 44(2) of Ontario’s Securities Act (the Act),[2] which prohibits false or misleading representations that a reasonable investor would consider relevant in deciding whether to enter into or maintain a trading or advising relationship with … Continue reading

A Cautionary Tale: A Flawed Cease Trade Order is not an Excuse to Continue Trading

Photo of Linda FuerstBy Linda Fuerst on Posted in Securities regulatory decisions
In Alberta Securities Commission v Felgate, 2022 ABCA 107 (Felgate), the Alberta Court of Appeal upheld the conviction of an individual for trading in securities while subject to a cease trade order, notwithstanding though the order was flawed. The appeal turned on two issues in particular: (1) whether an interim cease trade order could be … Continue reading

A broker’s good faith margin call and the consequences of failing to cover margin

Photo of Sophie MelchersBy Sophie Melchers on Posted in Securities regulatory decisions
On February 2, 2022, the Quebec Court of Appeal confirmed in part Mr. Justice Thomas M. Davis’s trial decision in KPH 11 c. Richardson Wealth Limited (Richardson GMP Limited), 2022 QCCA 148 condemning two clients of a securities broker to pay close to 5 million dollars after having failed to cover margin calls. This post … Continue reading

Proof of a Guilty Mind is Required to be Convicted for Aiding a Person to Commit an Offence under the Quebec Securities Act

Photo of Mihnea BantoiuPhoto of Joelle Briand-DiguerBy Mihnea Bantoiu and Joelle Briand-Diguer on Posted in Securities regulatory decisions
At-a-glance In Heller c. Autorité des marchés financiers, 2022 QCCA 208, the Court of Appeal of Quebec (Court of Appeal) considered whether the offence under section 208 of the Quebec Securities Act (QSA)[1], which states that “[e]very person who, by act or omission, aids a person in the commission of an offence is guilty of the offence … Continue reading

The Fine Line Between a Material Change and a Material Fact

Securities litigation and enforcementBy Admin on Posted in Securities regulatory decisions
Earlier this year, the Ontario Superior Court of Justice (ONSC) in Markowich v. Lundin Mining Corporation, 2022 ONSC 81 (Markowich) denied leave to commence a secondary market securities class action under Part XXIII.1 of Ontario’s Securities Act (the OSA) and denied certification of a common law negligent misrepresentation claim. The decision of Markowich is significant … Continue reading

Consequences from Coin Offerings: Ontario Securities Commission Affirms Cryptocurrency’s Status under Canadian Securities Laws

Photo of Stephen TaylorBy Stephen Taylor on Posted in Securities regulatory decisions
On December 22, 2021, the Ontario Securities Commission (the OSC) recently released the decision of Miner Edge Inc.(Re), 2021 ONSEC 31 (the Miner Edge Decision).[1]  Although CSA has published guidance on the application of securities laws to cryptocurrency offerings since August 2017,[2] the Miner Edge Decision is notable as a rare example of the regime … Continue reading

Alberta Court of Appeal Overturns Finding that Administrative Penalty Survives Bankruptcy

Photo of Steven LeitlPhoto of Aaron StephensonPhoto of Preston BraschBy Steven Leitl, Aaron Stephenson and Preston Brasch on Posted in Securities regulatory decisions
We earlier blogged here about Alberta Securities Commission v Hennig (Hennig QB) in which a chambers judge held that an administrative penalty levied by the Alberta Securities Commission (ASC) survived an individual’s discharge from personal bankruptcy under ss 178(1)(a) and (e) of the Bankruptcy and Insolvency Act (BIA). This decision was recently overturned by the … Continue reading

Regression Analysis Fails to Save the Day for the Defendant

Securities litigation and enforcementBy Admin on Posted in Other developments, Securities regulatory decisions
On November 2, 2021, the Ontario Divisional Court dismissed a motion for leave to appeal the decision of Justice Morgan, who granted leave to the plaintiff to commence an action under section 138.3 of the Ontario Securities Act (OSA) against Canadian cannabis producer Auxly Cannabis Group Inc. (Auxly). The Plaintiff’s Allegations The plaintiff alleged that … Continue reading

From Textual to Contextual: Court of Appeal Affirms the Scope of ‘Public Corrections’ in Statutory Secondary Market Misrepresentation Claims

Photo of Erika AnschuetzPhoto of Lauren RennieBy Erika Anschuetz and Lauren Rennie on Posted in Other developments, Securities regulatory decisions
In Baldwin v Imperial Metals Corporation, 2021 ONCA 838 (Baldwin), the Ontario Court of Appeal considered the scope of ‘public corrections’ in secondary market misrepresentation claims under Ontario’s Securities Act (the Securities Act) and followed the reasoning of its previous decision this year in Drywall Acoustic Lathing and Insulation, Local 675 Pension fund v Barrick … Continue reading

Not-so “Great Offers”: Hefty Penalties for Entrepreneurs Promoting Cryptoasset Mining Contracts Online

Photo of Sophie MelchersBy Sophie Melchers on Posted in Securities regulatory decisions
At-a-glance In Autorité des marchés financiers c. GO Great Offers Direct Ltd., 2021 QCTMF 57, the Financial Markets Administrative Tribunal (TMF or Tribunal) imposed administrative penalties of $50,000 on each of Martin LeBlanc (LeBlanc) and Johnny Martin (Martin) and issued cease trade order against them, Nuvoo Inc. (Nuvoo) and G.O. Great Offers Direct Ltd. (Great … Continue reading

SEC SPEAKS: Enforcement’s Planned Use of Aggressive Remedies

Photo of Kevin James HarnischPhoto of Linda FuerstPhoto of Ilana Beth SinkinPhoto of Devlin HealeyBy Kevin James Harnisch, Linda Fuerst, Ilana Beth Sinkin and Devlin Healey on Posted in Securities regulatory decisions, Uncategorized
In his remarks at SEC Speaks 2021 on October 13, 2021, the Securities and Exchange Commission’s (“SEC”)’s new Director of Enforcement, Gurbir Grewal, discussed the waning public trust in “our financial markets” and the “near historic lows” of confidence in banks, technology companies, and big business and the SEC’s plan to combat this trend.[1] In … Continue reading
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