Topic: Securities regulatory decisions

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Re Fauth: A Primer on ss. 75(1)(a), 92(4.1) and 93(b) of Alberta’s Securities Act

The Alberta Securities Commission (ASC) recently released its decision in the matter of Re Fauth, finding the respondent, Vernon Ray Fauth (Fauth), in breach of ss. 75(1)(a), 92(4.1) and 93(b) of Alberta’s Securities Act, RSA 2000, c S-4 (the Act). The decision offers some important insight on issues regarding limitation periods, illegal dealing, misrepresentations, and … Continue reading

Time is of the Essence: Public Interest Considerations on a Motion for Standing to bring a s. 127 Proceeding Before the Ontario Securities Commission

By Linda Fuerst on November 15, 2018 Posted in Securities regulatory decisions

A private party cannot commence a proceeding under s. 127 of the Ontario Securities Act (the “Act”) seeking enforcement remedies as a matter of right. In Pearson (Re), 2018 ONSEC 53 the Ontario Securities Commission provides further guidance concerning when it will permit someone other than Enforcement Staff to commence such a proceeding before it. … Continue reading

Supreme Court of Canada Rules that Proposed Canadian Cooperative Capital Markets Regulatory System is Constitutional

By Jeremy Devereux and Justine Smith on November 9, 2018 Posted in Other developments, Securities regulatory decisions

Today the Supreme Court of Canada (the Supreme Court) released its much-anticipated decision on the reference regarding the proposed Canadian Cooperative Capital Markets Regulatory System, finding that the proposed national regulatory system is constitutional. Previous Attempts to Create National Securities Regulator It has been suggested by the a number of governments, academic commentators and others … Continue reading

The Scope of Securities Commission’s Public Interest Jurisdiction: What Constitutes Abuse of the Capital Markets?

By Linda Fuerst on October 22, 2018 Posted in Securities regulatory decisions

The Scope of Securities Commission’s Public Interest Jurisdiction: What Constitutes Abuse of the Capital Markets? In Re Hamilton, 2018 BCSEECOM 290, the British Columbia Securities Commission (BCSC) was called upon, yet again, to consider the scope of its public interest jurisdiction in an enforcement proceeding pursuant to s. 161 of the British Columbia Securities Act, RSBC 1996, c. … Continue reading

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

By Linda Fuerst on October 18, 2018 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

By Peter Tae-Min Choi on October 16, 2018 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

By Saam Pousht-Mashhad on October 16, 2018 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

By Ted Brook on October 10, 2018 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?

By Caroline Larouche on October 4, 2018 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

By Sophie Melchers on September 26, 2018 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

By Sophie Melchers on September 10, 2018 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

By Robert A. Schwinger on August 31, 2018 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

By Fahad Siddiqui on August 4, 2018 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

By Robert A. Schwinger on June 27, 2018 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

By Steven Leitl on June 15, 2018 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

By Andrew McCoomb on May 30, 2018 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

By Erika Anschuetz on May 25, 2018 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

By Thomas J. Hall on April 26, 2018 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

By Linda Fuerst on April 20, 2018 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

By Geoff Mens on April 11, 2018 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

By Danny Urquhart on April 11, 2018 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

By Walied Soliman, Heidi Reinhart and Joe Bricker on April 2, 2018 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

By Robert A. Schwinger on March 16, 2018 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

By Linda Fuerst and Erika Anschuetz on January 30, 2018 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