Topic: White collar crime

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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 which proceeds derived from securities law violations may be forfeited to the Crown and ultimately returned to victims of securities law breaches.

The OSC cannot on its own compel a civil forfeiture to the Crown. That power belongs to the Attorney General of Ontario … 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 with global trends. The introduction swiftly follows the consultation process which wrapped up in December. DPAs will be available for certain, not-yet-disclosed, offences.

As in other jurisdictions which have recently recommended DPAs, such as in Singapore and Australia, Canada’s remediation agreement framework is … 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 the defendants marketed and sold securities called PlexCoin in violation of anti-fraud and registration provisions of U.S. securities law.  On December 4, 2017, the SEC obtained an order freezing the assets of PlexCorps, Lacroix and Paradis-Royer.  This case represents the SEC’s first fraud … 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 stay had been issued on grounds that the case was not sufficiently complex to require an extension of time for the Crown before trial and that the presumptive 18-month ceiling on Crown delays should be enforced.

In Desmarais the Autorité des marchés financiers (… 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 between them.

Pursuant to s. 161(1)(g) of the Act, after finding a  breach of securities law, the BCSC may make a disgorgement order requiring that a person or company  “pay to the commission any amount obtained, or payment or loss avoided, directly or indirectly, … 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 Compromise and Reorganization resulting in its former bondholders receiving substantially all of its remaining assets, it raised approximately $3 billion from investors.

Shortly after a short seller’s report in June 2011 alleging that the Company was a fraud, Commission Staff commenced an investigation that resulted … 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 an exercise in futility.[2]

Background to the Appeal

On February 11, 2015, the Commission released its decision finding that Eda Agueci, Henry Fiorillo, Dennis Wing, and Kimberly Stephany had contravened the insider trading and tipping provisions under s. 127 of the Securities ActContinue Reading

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