Topic: White collar crime

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Passive Reliance on Fellow Director is Insufficient for Due Diligence Defence

By Sophie Melchers on July 3, 2020 Posted in Other developments, White collar crime

In a judgment dated June 9, 2020, the Superior Court of Quebec in Autorité des marchés financiers v. Descheneaux, 2020 QCCS 1779 (Justice R. Mongeon) confirmed that passive reliance on a fellow director, more knowledgeable and experienced with the legal requirements of raising capital under applicable securities laws, is insufficient to ground a due diligence defence … Continue reading

COVID-19 Scams on the Rise and Enforcement on the Horizon

By Ted Brook on May 8, 2020 Posted in Cross border issues, Other developments, White collar crime

As COVID-19 continues to impact capital markets around the world, securities regulators in North America are responding to an increasing number of securities-related scams. Provincial securities regulators across Canada, as well as the United States Securities and Exchange Commission, have now issued official warnings about fraudulent investment offerings and other scams that target investors. Many … Continue reading

Landmark Changes to the BC Securities Act are Set to Take Effect March 27

By Kaitlin Smiley on March 23, 2020 Posted in Legislation, rules and policies, White collar crime

As previously reported, on October 21, 2019, the BC provincial government announced sweeping and significant changes to the BC Securities Act which are intended to give the BC Securities Commission (BCSC) the strongest powers in the country to impose tougher consequences for wrongdoers. The provincial government recently issued an order in council confirming that these … Continue reading

Insider trading prosecutions may increase after Second Circuit decision lowered barriers to convict

By Kevin James Harnisch, Ilana Beth Sinkin and Vijay Rao on January 29, 2020 Posted in Cross border issues, Other developments, White collar crime

The Second Circuit recently determined that the criminal securities fraud provisions that were enacted as part of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) have less onerous requirements for proving insider trading than under the general antifraud provisions of the Securities Exchange Act of 1934 (Exchange Act), specifically Section 10(b) of the Exchange Act. Section 10(b) … Continue reading

White Collar Criminals Beware – BC strengthening Securities Commission investigation and enforcement powers

By Kaitlin Smiley on October 30, 2019 Posted in Legislation, rules and policies, White collar crime

On October 21, 2019, the BC provincial government announced sweeping and significant changes to the BC Securities Act which are intended to give the BC Securities Commission (BCSC) the strongest powers in the country to impose tougher consequences for wrongdoers. Bill 33-2019, the Securities Amendment Act, 2019, sets out over 100 proposed amendments, many of … Continue reading

Stung By Deceit: Re Natural Bee Works Apiaries Inc.

By Linda Fuerst and Ted Brook on October 4, 2019 Posted in Other developments, Securities regulatory decisions, Uncategorized, White collar crime

On July 3, 2019 the Ontario Securities Commission (“OSC”) released its decision in Re Natural Bee Works Apiaries Inc., 2019 ONSEC 23 (“Natural Bee”). Natural Bee provides useful guidance concerning proof of falsity and participation in a fraudulent scheme under section 126.1(1) of the Ontario Securities Act (the “Act”). Background In Natural Bee, OSC Staff … Continue reading

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

By Peter Tae-Min Choi on July 11, 2019 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

Imposition of OSC Sanctions Following a Conviction for an Offence Relating to Securities: The Availability of Carve-Outs in the Public Interest

By Linda Fuerst on June 10, 2019 Posted in Securities regulatory decisions, White collar crime

In Theroux (Re), 2019 ONSEC 20 a hearing panel of the Ontario Securities Commission (OSC) was called upon to decide whether an individual convicted of five counts of fraud over $5,000 contrary to section 380(1)(a) of the Criminal Code should have the benefit of carve-outs from an order under section 127(10) of the Ontario Securities … Continue reading

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

By Seth M. Kruglak on March 1, 2019 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

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

By Erika Anschuetz on December 11, 2018 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

Crime Doesn’t Pay: OSC Permanently Bans Convicted Fraudster

By Danny Urquhart on December 6, 2018 Posted in Securities regulatory decisions, White collar crime

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

By Steven Leitl and Aditya Badami on November 21, 2018 Posted in Other developments, Securities regulatory decisions, White collar crime

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

By Kevin James Harnisch, Keith M. Rosen, Paul Sumilas, Ilana Beth Sinkin and Vijay Rao on November 13, 2018 Posted in Cross border issues, Legislation, rules and policies, Other developments, White collar crime

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

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

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

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

By Sophie Melchers and Caroline Larouche on August 15, 2018 Posted in Other developments, White collar crime

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

By Sophie Melchers on August 14, 2018 Posted in Cross border issues, Other developments, White collar crime

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

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

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

By Seth M. Kruglak and Lisa Schapira on July 17, 2018 Posted in Cross border issues, Other developments, White collar crime

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

By Thomas J. Hall on June 20, 2018 Posted in Cross border issues, White collar crime

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

By Sophie Melchers and Caroline Larouche on June 20, 2018 Posted in Other developments, White collar crime

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

By Kaitlin Smiley on May 31, 2018 Posted in Other developments, White collar crime

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

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