In Re Rustulka, 2020 ABASC 93, a hearing panel of the Alberta Securities Commission (the Commission) determined that a former exempt market dealing representative breached his “know your client” (KYC) and suitability obligations under Alberta securities law by failing to properly identify his clients’ investment needs, objectives, financial circumstances and risk tolerances and by reporting false and misleading information about the clients on KYC documentation. Misrepresentations made by the dealing representative concerning the risks of investing in the exempt market securities that he was selling induced his clients, many of whom were seniors or close to … Continue Reading
In January 2020, Madam Justice B.E. Romaine of the Court of Queen’s Bench of Alberta (Court) ruled that an administrative penalty levied against the Respondent by the Alberta Securities Commission (ASC) survived his discharge from bankruptcy. (See Alberta Securities Commission v Hennig, 2020 ABQB 48)
The administrative penalty was levied in 2008 against the Respondent after the ASC found that he was responsible for misrepresentations in the financial statements of a public company of which he was a director and officer; that he financially benefited from the misrepresentations; that he participated in market manipulation; … Continue Reading
Two ordained ministers are among the five named individual Respondents who have settled with the Alberta Securities Commission (the Commission) in Re Lutheran Church-Canada, the Alberta-British Columbia District, 2019 ABASC 140. The individual Respondents were all involved in investment funds run by the Lutheran Church-Canada, Alberta-British Columbia District (the District), which became insolvent in 2015. The individual Respondents admitted that they authorized statements in promotional literature from 2008 to 2014 about the investment funds that they knew or ought to have known were misleading contrary to section 92(4.1) of the Alberta Securities Act (the Act).… Continue Reading
In July 2019, the Alberta Securities Commission (ASC) joined other signatories, including the Ontario Securities Commission and the United States Securities and Exchange Commission (SEC), by signing the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (EMMoU).
This step by the ASC reflects an ongoing increase in cooperation among Canadian and foreign securities regulators in the context of increasingly globalized capital markets.
IOSCO was established in 1983 when 11 securities regulators from North and South America agreed to build … Continue Reading
In February 2019, the Alberta Securities Commission (ASC) declined to stay the hearing of pending ASC enforcement proceedings on the basis of the existence of parallel, pending class action proceedings.
In June 2018, Staff of the ASC issued a notice of hearing against Alberta divisions of the Lutheran Church-Canada and several of their former officers and directors (the Respondents), alleging that the Respondents had made misrepresentations contrary to s. 92(4.1) of the Alberta Securities Act (material misleading statements) in connection with securities offered to members of the Lutheran Church.
The allegations followed the financial collapse of … Continue Reading
On November 19, 2018, the Alberta Securities Commission (ASC) implemented its first whistleblower program (the Program) through the release of ASC Policy 15-602 Whistleblower Program (the Policy) and simultaneous amendments to the Alberta Securities Act (the Act).
The Program is effective as of November 19, 2018. Its protections apply retroactively to securities misconduct but only in relation to tips communicated to the ASC on or after November 19, 2018.
According to the ASC, the highlights of the Program include the following:
- the facilitation of simple reporting by providing a dedicated telephone “tip” line and access
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 fraud under the Act. The decision also discusses the use of hearsay evidence in proceedings before the Commission; specifically, the use of transcripts of witness interviews conducted by the Alberta Securities Commission Staff (Staff) in the … Continue Reading
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 release announcing a “new tool in the expanding ASC Enforcement toolbox” – the “opportunity to enter into no-contest settlement agreements in certain and limited circumstances”.
This new “tool” was created by amendments to Policy 15-601, including a new section 14. Section 14 … Continue Reading
In October 2017, the Alberta Securities Commission (ASC) released ASC Policy 15-601: Credit for Exemplary Cooperation in Enforcement Matters. According to the ASC, Policy 15-601:
… provides clarity and transparency regarding the circumstances under which ASC staff will consider exercising their discretion to grant credit to those individuals or entities that provide exemplary cooperation to ASC staff in the course of enforcement matters. This exemplary cooperation is cooperation above and beyond mere compliance with obligations under Alberta securities laws.