Capital Markets Tribunal - Ontario

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Capital Markets Tribunal - Ontario Decisions from the Capital Markets Tribunal (Ontario)
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securities — capital markets — investors — settlement agreement — permanently prohibitedIn the case of Gong (Re), 2024 O...
27/11/2024

securities — capital markets — investors — settlement agreement — permanently prohibited

In the case of Gong (Re), 2024 ONCMT 24, Edward Gong, the director of Edward Enterprise International Group Inc., was accused by the Ontario Securities Commission of breaching securities laws related to a pyramid scheme and forgery. Following a guilty plea in an earlier case, a settlement was established that barred Gong from trading securities and from holding positions as a director or officer in Canada, with some limited exceptions. The tribunal determined that no further financial penalties were necessary, as the sanctions imposed in the previous court ruling were considered adequate. The tribunal approved the settlement, highlighting its suitability and the importance of protecting the public interest.

Capital Markets Tribunal (Ontario)
Gong (Re)
2024 ONCMT 24 (CanLII)
https://canlii.ca/t/k7m8d
October 30, 2024

crypto — investors — securities — shares — tradingIn the case of *Nvest Canada Inc (Re)*, the Ontario Securities Commiss...
27/11/2024

crypto — investors — securities — shares — trading

In the case of *Nvest Canada Inc (Re)*, the Ontario Securities Commission accused Nvest Canada, GX Technology Group, and individuals Pirakaspathy and Carson of engaging in unregistered trading and the illegal distribution of "GXTokens" and shares without the necessary registration or prospectus. The Tribunal determined that GXTokens qualified as securities under the Securities Act. As a result, the respondents faced significant penalties, including a 10-year ban from participating in capital markets, an administrative penalty of $200,000 each, disgorgement of $293,493.19, and an additional cost of $162,390.10. The Tribunal highlighted the severity of the misconduct and underscored the critical need for investor protection in the financial markets.

Capital Markets Tribunal (Ontario)
Nvest Canada Inc (Re)
2024 ONCMT 25 (CanLII)
https://canlii.ca/t/k7nph
November 1, 2024

securities-related business — unapproved — trading — misconduct — investorsIn the case 1797472 Ontario Inc. v. Independe...
27/11/2024

securities-related business — unapproved — trading — misconduct — investors

In the case 1797472 Ontario Inc. v. Independent Electricity System Operator, the Ontario Court of Appeal affirmed the application judge's interpretation of the Feed-in Tariff (FIT 1) Contracts. The Independent Electricity System Operator (IESO) argued that the respondents breached their contracts by optimizing their solar panel facilities without obtaining prior consent. However, the court determined that the changes made by the respondents did not necessitate IESO's approval according to the contract terms. It concluded that the capacity to produce direct current (DC) energy was not explicitly defined in the contracts. Consequently, the appeal was dismissed, with the court finding no reversible errors in the application judge's decision. This ruling clarifies the contractual obligations and the extent of IESO's authority regarding modifications made by the respondents to their solar energy facilities.

Capital Markets Tribunal (Ontario)
Dziadecki v Canadian Investment Regulatory Organization
2024 ONCMT 22 (CanLII)
https://canlii.ca/t/k7hhr
October 23, 2024

perpetrated a fraud — contravened — respect to the loans — million loan — subjective elementIn *Bridging Finance Inc (Re...
27/11/2024

perpetrated a fraud — contravened — respect to the loans — million loan — subjective element

In *Bridging Finance Inc (Re)*, the Ontario Capital Markets Tribunal ruled that David Sharpe and Natasha Sharpe engaged in securities fraud by conducting improper loan transactions with investor funds, which benefited themselves and others. David was specifically found guilty of fraud related to the McCoshen loans, while both David and Natasha were held liable for the Ninepoint loans. Andrew Mushore, who participated in the Ninepoint scheme, was also deemed complicit in the fraudulent activities. The Tribunal dismissed direct fraud allegations against Bridging Finance but confirmed the firm violated conflict of interest regulations. As a result of their actions, which included witness intimidation and misleading the Commission, the Tribunal ordered the Sharpe respondents to face sanctions.

Capital Markets Tribunal (Ontario)
Bridging Finance Inc (Re)
2024 ONCMT 23 (CanLII)
https://canlii.ca/t/k7lht
October 28, 2024

administrative penalty — breaches — securities — costs — disgorgementIn the case of Valentine (Re), 2024 ONCMT 21, the C...
14/11/2024

administrative penalty — breaches — securities — costs — disgorgement

In the case of Valentine (Re), 2024 ONCMT 21, the Capital Markets Tribunal determined that Mark Edward Valentine violated a 2004 Ontario Securities Commission order that permanently prohibited him from serving as a director or officer and from trading in securities. Valentine acknowledged some of these violations and agreed to certain sanctions but disputed the administrative penalties and costs. The Tribunal enforced permanent bans on his market participation, mandated him to disgorge over $3 million CAD and $10 million USD, levied $1 million in administrative penalties, and required him to pay $300,000 in costs. The Tribunal underscored the gravity and repetitive nature of Valentine's misconduct, highlighting the need for stringent deterrent measures to prevent future violations.

Capital Markets Tribunal (Ontario)
Valentine (Re)
2024 ONCMT 21 (CanLII)
https://canlii.ca/t/k740v
September 30, 2024

witness summaries — documents — spoofing — transcripts — substanceThe Ontario Securities Commission (OSC) alleges that O...
13/11/2024

witness summaries — documents — spoofing — transcripts — substance

The Ontario Securities Commission (OSC) alleges that Oasis World Trading Inc., Zehn (Steven) Pang, and Rikesh Modi engaged in unregistered trading and manipulative practices. The respondents requested revised witness summaries, unredacted transcripts, and additional documents. The Capital Markets Tribunal found some deficiencies in the OSC's summaries, ordered revised summaries, and required a table of concordance for exhibits. The Tribunal also mandated the disclosure of attachments to a letter from the Australian Securities & Investment Commission. The merits hearing is set for January 2025.

Capital Markets Tribunal (Ontario)
Oasis World Trading Inc (Re)
2024 ONCMT 20 (CanLII)
https://canlii.ca/t/k6qct
September 6, 2024

trading — investors — securities — crypto contracts — platformThe Capital Markets Tribunal ruled against Manticore Labs ...
24/09/2024

trading — investors — securities — crypto contracts — platform

The Capital Markets Tribunal ruled against Manticore Labs OÜ (operating as CoinField) and Manticore Labs Inc., finding that they operated a crypto asset trading platform without proper registration, distributed securities without a prospectus, and made false statements to investors. The Tribunal determined that the contracts between CoinField and investors were "investment contracts," thus qualifying as securities under the Securities Act. The respondents failed to maintain custody of investors' assets and did not honor withdrawal requests. Consequently, the Tribunal called for a sanctions and costs hearing, with the Ontario Securities Commission to propose dates by September 9, 2024.

Capital Markets Tribunal (Ontario)
Manticore Labs OÜ (Re)
2024 ONCMT 19 (CanLII)
https://canlii.ca/t/k6hr8
August 26, 2024

legal fees — receiver — adjournment — merits — requestIn Bridging Finance Inc. (Re), 2024 ONCMT 12, the Capital Markets ...
23/09/2024

legal fees — receiver — adjournment — merits — request

In Bridging Finance Inc. (Re), 2024 ONCMT 12, the Capital Markets Tribunal addressed motions from Natasha Sharpe to vary the timetable for closing submissions due to her inability to pay legal fees, and from her counsel, Lenczner Slaght LLP, to withdraw as her counsel of record. The case involved Bridging Finance Inc., David Sharpe, Natasha Sharpe, and Andrew Mushore, with deadlines for closing submissions set after a lengthy merits hearing.

On May 1, 2024, Natasha Sharpe requested an adjournment, citing financial difficulties, while Lenczner Slaght LLP sought to withdraw due to unpaid fees. The Tribunal denied both requests, extending the submission deadline to May 15, 2024. It ruled that Natasha had not shown "exceptional circumstances" required for an adjournment under Rule 34(1) of the Capital Markets Tribunal Rules of Procedure, noting her delay in addressing the fee issue since December 2022.

The Tribunal also rejected the withdrawal request, emphasizing the negative impact on the administration of justice and potential delays. It highlighted that counsel had represented Natasha for over a year without payment, expecting eventual resolution. Additionally, Natasha's request to keep the unredacted version of her Motion Record confidential was granted, underscoring the importance of maintaining the hearing schedule and ensuring timely and just proceedings.

Capital Markets Tribunal (Ontario)
Bridging Finance Inc (Re)
2024 ONCMT 12 (CanLII)
https://canlii.ca/t/k4rzb
May 17, 2024

investors — temporary cease trade — securities — product — tradingThe Ontario Securities Commission (OSC) determined tha...
07/08/2024

investors — temporary cease trade — securities — product — trading

The Ontario Securities Commission (OSC) determined that Nova Tech Ltd and its principal, Cynthia Petion, engaged in unregistered trading, an illegal distribution of securities, and violated a temporary cease trade order. Nova Tech promoted a product promising high returns through forex and crypto trading without proper registration or filing a prospectus. Despite a cease trade order, Nova Tech continued to accept investments while freezing withdrawals. Petion, as CEO, was held accountable for these violations. The Tribunal planned a hearing to decide on sanctions and costs. Although the conduct was found to be in violation of Ontario securities law, no public interest order was issued.

Capital Markets Tribunal (Ontario)
Nova Tech Ltd (Re)
2024 ONCMT 18 (CanLII)
https://canlii.ca/t/k5xrj
July 19, 2024

carve-outs — bans — trading — capital markets — sanctionsIn Kraft (Re), 2024 ONCMT 16, the Capital Markets Tribunal dete...
06/08/2024

carve-outs — bans — trading — capital markets — sanctions

In Kraft (Re), 2024 ONCMT 16, the Capital Markets Tribunal determined that Michael Paul Kraft and Michael Brian Stein violated the Securities Act through illegal tipping and insider trading, respectively. Kraft, who was the Chairman of WeedMD Inc., disclosed material non-public information to Stein, which Stein then used to trade shares. The Tribunal imposed several sanctions: Kraft received a three-year trading ban, a four-year ban from serving as a director or officer, an administrative penalty of $200,000, and was ordered to pay $150,000 in costs. Stein was subjected to a four-year trading ban, a three-year director and officer ban, an administrative penalty of $150,000, the disgorgement of $29,345, and $50,000 in costs. The Tribunal underscored the gravity of the offenses and the necessity of deterrence in its ruling.

Capital Markets Tribunal (Ontario)
Kraft (Re)
2024 ONCMT 16 (CanLII)
https://canlii.ca/t/k5m88
July 2, 2024

take-over bid — acquisitions — offeree issuer — misuse — take-over bidsIn the case of Aimia Inc (Re), 2024 ONCMT 17, Mit...
05/08/2024

take-over bid — acquisitions — offeree issuer — misuse — take-over bids

In the case of Aimia Inc (Re), 2024 ONCMT 17, Mithaq Capital SPC, the largest shareholder of Aimia Inc., acquired shares in February 2023, approaching a 20% threshold that would trigger Ontario take-over bid laws. Aimia alleged that Mithaq acted in concert with others, surpassing the 20% limit, which would require Mithaq to make a take-over bid offer to all shareholders, a step Mithaq did not take. Consequently, Aimia filed an application under section 104 of the Securities Act. Mithaq moved to dismiss the application, arguing that Aimia lacked standing and that the application was an abuse of process. The Tribunal determined that Aimia did have standing to file the application but ultimately dismissed it due to Aimia's delay in filing and other intervening events, concluding that Aimia's use of section 104 was inappropriate.

Capital Markets Tribunal (Ontario)
Aimia Inc (Re)
2024 ONCMT 17 (CanLII)
https://canlii.ca/t/k5pn7
July 5, 2024

confidential — redacted — typographical — reconsider — submitsThis is about a hearing for Go-To Developments and Oscar F...
11/07/2024

confidential — redacted — typographical — reconsider — submits

This is about a hearing for Go-To Developments and Oscar Furtado. Furtado wanted his medical info to be private, but the tribunal refused. They did fix a typo in their decision though.

Capital Markets Tribunal (Ontario)
Go-To Developments Holdings (Re)
2023 ONCMT 49 (CanLII)
https://canlii.ca/t/k1rfp
December 12, 2023

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