Topic: White collar crime

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

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

Crime Doesn’t Pay: OSC Permanently Bans Convicted Fraudster

On November 26, 2018, the Ontario Securities Commission (OSC) issued an order permanently prohibiting Daniel Reeve, a financial planner based in the Kitchener, Ontario area, from participation in Ontario’s capital markets, including trading in any securities and becoming or acting as a registrant. The permanent ban came after Reeve was convicted in the Ontario Superior … Continue reading

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

DOJ provides additional insight on compliance and investigations matters

On October 25, 2018, John Cronan, Principal Deputy Assistant Attorney General of the Criminal Division of the US Department of Justice (DOJ), delivered an important speech that touched on several key issues for legal and compliance counsel trying to balance business realities with regulator expectations, particularly with respect to compliance with the US Foreign Corrupt … Continue reading

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

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

Ontario Court Imposes Custodial Sentence for Securities Act Offences

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

Stay of proceedings based on AMF failings in its disclosure of evidence : Baazov v. AMF, 2018 QCCQ 4449

In the recent decision Baazov v. AMF, Mascia J. of the Quebec Court, Criminal and Penal Chamber granted a stay of proceedings in respect of all tipping, insider trading and market manipulation charges laid against the accused based on the repeated failings of the prosecutor, the Autorité des marchés financiers (AMF), the Quebec securities regulator, … Continue reading

The Importance of Cooperation Among Interjurisdictional Securities Regulators: United States Securities and Exchange Commission v. Autorité des marchés financiers, 2018 QCCQ 4417

In the recent decision of United States Securities and Exchange Commission v. Autorité des marchés financiers, 2018 QCCQ 4417, the Quebec Court, Criminal and Penal Chamber held that the United States Securities and Exchange Commission (SEC) had the required interest under section 122 of the Code of penal procedure (CPP) to be allowed to examine … Continue reading

Ontario Securities Commission confirms test for severance

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

Copy and Paste Securities Fraud? The U.S. Supreme Court to Decide

Last month, the U.S. Supreme Court granted certiorari to hear a case where an investment banker copied and pasted misstatements from his boss into emails that, at his boss’s request, he sent to prospective debenture purchasers.  In Lorenzo v. Securities and Exchange Commission, 872 F.3d 578 (D.C. Cir. 2017), a divided United States Court of Appeals … Continue reading

New York Highest Court Imposes Three Year Limitations on State Attorney General Securities Actions

On June 12, 2018, New York’s highest court issued a ruling that a three year statute of limitations, not the six year statute applicable to fraud claims, applies to claims brought under New York’s Martin Act.  People v. Credit Suisse Securities (USA) LLC, et al.  The Martin Act is the New York State Blue Sky … Continue reading

Parity in sentencing for insider trading: AMF v. Beauchamp, 2018 QCCQ 3604

In a recent decision, AMF v. Beauchamp, Délisle J. of the Quebec Court, Criminal and Penal Chamber, refused to follow the request of the Quebec securities regulator, the Autorité des marchés financiers (AMF), that a prison term be added to the sentence of an accused in an insider trading case. Background to the Decision Francis … Continue reading

Still in Jeopardy: Supreme Court of Canada refuses leave to appeal BC Court of Appeal decision confirming that a Securities Commission financial penalty does not prevent being penalised in criminal fraud proceedings

This morning the Supreme Court of Canada refused leave to appeal[1] from the decision of the BC Court of Appeal in R. v. Samji[2], which confirms that the Charter does not preclude criminal proceedings where a defendant had already been ordered to pay penalties for fraud under the Securities Act. Rashida Samji, a former licensed notary … Continue reading

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

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

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

Not All’s Fair in Disgorgement and Fraud

On April 18, 2018, the Ontario Superior Court of Justice released its reasons in Ontario Securities Commission v. Bluestream Capital Corporation which is a useful illustration of the Ontario Securities Commission (OSC)’s power to garnish funds held by victims of investment fraud that are payable as debts to the perpetrator of the fraud. The Background … Continue reading

Civil Forfeiture in the Securities Context

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

Deferred Prosecution Agreements: Coming to Canada Shortly

The Canadian government, as part of Bill C-74-1 the Budget Implementation Act introduced on March 27, 2018, finally introduced a bill that would make deferred prosecution agreements (DPAs) part of the Criminal Code. This new prosecutorial tool would represent a significant shift in Canada’s approach towards corporate wrongdoing – one that aligns Canada more closely … Continue reading

SEC takes action in respect of rogue Canadian ICO issuer

On December 1, 2017, the Securities and Exchange Commission (SEC) commenced a civil action in the U.S. District Court against PlexCorps (also known as PlexCoin and Sidepay.ca) and its principals, Dominic Lacroix and Sabrina Paradis-Royer, seeking civil remedies including injunctive relief, an order freezing all of the defendants’ assets and disgorgement.  The SEC alleges that … Continue reading

Stay of Securities Prosecution For Delay: Application of the Jordan framework to Regulatory Offences Punishable by Imprisonment

In one of the first decisions in Canada applying the Supreme Court of Canada’s new Jordan framework for the measurement of unconstitutional Crown delay to prosecutions for breach of securities law, the Superior Court of Quebec has upheld a stay issued by the provincial Court of Quebec in Autorité des marchés financiers c. Desmarais. The … Continue reading

BC Court of Appeal clarifies use of disgorgement remedy under the Securities Act

In Poonian v. British Columbia Securities Commission[1] the BC Court of Appeal recently found that the BC Securities Commission (BCSC) may, in limited circumstances, make orders pursuant to s. 161(1)(g) of the BC Securities Act (the Act)  holding persons jointly and severally liable for a disgorgement order where there is evidence showing control and direction … Continue reading

Johnny Come Lately: The Conclusion of the OSC Hearing Into Sino-Forest

By now the facts underlying the recently concluded Ontario Securities Commission hearing into Sino-Forest Corporation should be well known.  Sino-Forest was a reporting issuer in Ontario, reportedly in the business of operating commercial forest plantations in the People’s Republic of China.  Between 1995 and its demise in 2013, when it entered into a Plan of … Continue reading

Fiorillo v Ontario Securities Commission: deference wins the day on insider trading appeal

The Divisional Court recently upheld an Ontario Securities Commission (Commission) decision sanctioning a number of individuals for insider trading and tipping, and acting contrary to the public interest.[1] This is the latest in a series of unsuccessful appeals from Commission decisions, suggesting that the courts’ significant deference to decisions of that tribunal makes most appeals … Continue reading
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