Tag archives: OSC

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

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

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

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

Ontario Court Rejects “Family Resemblance” Test for Defining Securities under the Securities Act

On May 15, 2018, the Ontario Superior Court of Justice in Ontario Securities Commission v. Tiffin confirmed that the “family resemblance” test cannot be used to answer one of the central questions of securities law: what constitutes a security? Background In July 2014, the Ontario Securities Commission (OSC) prohibited Mr. Tiffin from trading in securities … 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

OSC Continues Mediation Program on a Permanent Basis

On April 9, 2018, the Ontario Securities Commission (OSC) announced that its Mediation Program, which began as a pilot program in May 2015, will be continuing on a permanent basis. The Mediation Program provides respondents represented by counsel, as well as enforcement staff, with the option to seek resolution through an independent third party mediator. … 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

Ontario Securities Commission Revamps Whistleblower Program for In-House Counsel

Background In 2016, the Ontario Securities Commission (OSC) adopted OSC Policy 15-601 (the Policy) which established its Whistleblower Program (the Program). The Program is intended to encourage whistleblowers to report serious violations of securities law, such as insider trading, fraud, misleading financial statements or trading-related misconduct. Under the Program, individuals who voluntarily offer such information … Continue reading

Ontario provides protection to “whistleblowers” against reprisals

In December 2017, Ontario instituted a civil cause of action for employees who experience reprisals from their employers for providing information or assisting in certain other ways in regulatory or criminal investigations or proceedings involving contraventions of securities or commodity futures laws (whistleblowing). The identical amendments to s. 121.5 of Ontario’s Securities Act and s. … Continue reading

The Ontario Court of Appeal Affirms the Test for Tippee Liability: Finkelstein v. Ontario Securities Commission

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

R. v. Marakah: A roadmap towards broader privacy protection in securities enforcement proceedings?

In R. v. Marakah[1], the Supreme Court of Canada (SCC) considered (1) whether Canadians can reasonably expect that text messages they send remain private, even after the messages have reached their destination, and (2) whether the state is free to access text messages from a recipient’s device without a warrant. Facts Marakah was convicted for … Continue reading

The Principle of Parity in OSC Settlements Does Not Preclude Disparity Where Warranted: Techocan International Co. Ltd. (Re), 2017 ONSEC 44

The Ontario Securities Commission’s decision in Techocan International Co. Ltd. (Re), 2017 ONSEC 44 affirms that absent exceptional and compelling circumstances, a respondent cannot resile from a settlement agreement on the basis of a co-respondent’s subsequent settlement on terms perceived to be more favourable. Facts On March 23, 2016, Staff of the Ontario Securities Commission … Continue reading

OSC orders trading platform systems upgrade

On November 13, 2017, Staff of the Ontario Securities Commission brought an application seeking a temporary order suspending the registration of Omega Securities Inc. (Omega) as well as trading in two alternative trading systems run by Omega called Omega ATS and Lynx ATS, pending the outcome of a hearing on the merits. Staff alleged that … Continue reading

Supreme Court Denies Leave to Applicants Seeking to Challenge Bifurcation of OSC Proceedings

The Supreme Court of Canada recently denied leave to appeal the Court of Appeal for Ontario’s decision in Ontario Securities Commission v. MRS Sciences Inc. (MRI Sciences), which considered the bifurcated nature of proceedings before the Ontario Securities Commission (the OSC). The decision is significant for its judicial endorsement of the OSC’s current two-phased approach … Continue reading

Regulatory and civil consequences of Initial Coin Offerings in Ontario

A great deal has been written recently about the possible regulatory uncertainty surrounding Initial Coin Offerings (ICOs) in Canada.  In an ICO, a newly issued cryptocurrency is sold to purchasers, who acquire a right of ownership symbolized by a “coin” or token, which may appreciate in value. Depending upon the characteristics of the ownership interest … Continue reading

OSC Sanctions Respondents in Strictrade Scheme

In Strictrade Marketing Inc. et al., 2017 ONSEC 12, the Ontario Securities Commission (the Commission) delivered robust sanctions to Respondents found to have marketed and sold licenses for trading software in breach of the Ontario Securities Act (the Act). Enforcement Proceedings In 2015, Commission Staff brought enforcement proceedings against the Respondents, Edward Furtak (Furtak), Axton 2010 … Continue reading

The OSC Explores the Elimination of Embedded Commissions

The Ontario Securities Commission (OSC) hosted a roundtable discussion on September 18, 2017 (the Roundtable Discussion) to help evaluate potential regulatory changes to discontinue embedded commissions in investment funds. The term “embedded commission” refers to the remuneration of dealers and their representatives for mutual fund sales through a commission paid by investment fund managers (for … Continue reading

“Real and Substantial Connection” Test Applies to Regulatory Jurisdiction Over Offences with Extraterritorial Elements

In Ontario Securities Commission v. DaSilva, 2017 ONSC 4576 (DaSilva), the Ontario Superior Court of Justice confirmed that the “real and substantial connection” test applies in determining whether the Ontario Securities Commission (the Commission) has jurisdiction over offences with extraterritorial elements. Background: The Appellants’ Breaches of the No Trade Order In an earlier proceeding, the … Continue reading

SEC ruling on The DAO signals increased acceptance of blockchain-based securities

On July 25, 2017, the Securities and Exchange Commission (SEC) issued a statement on the regulatory significance of offers and sales of digital assets carried out using distributed ledger or blockchain technology.  That statement followed the SEC’s Report of Investigation into The DAO, an unincorporated organization designed to issue tokens administered on a distributed ledger … Continue reading

Home Capital Group Inc. Settlement with the OSC: Lessons Learned

On August 9, 2017 the Ontario Securities Commission (OSC) approved a settlement agreement entered into by Home Capital Group Inc (HCG), a reporting issuer in the residential and commercial lending business, Gerald Soloway (Soloway), its former founder and CEO, Robert Morton (Morton), its former CFO and  Martin Reid (Reid), its former President. Both Morton and … 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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