Recently, the Ontario Securities Commission released its 2016 Annual Report, including its enforcement
statistics for the 2015-16 year. The OSC saw a decrease from
2014-15 in the number of cases assessed (down from 288 to 164),
however, the number of such cases transferred to investigation
remained relatively steady (down from 37 to 32). Similarly, while
there was a decrease in the number of completed investigations
(down from 54 to 35), the number of such cases transferred to
litigation was somewhat stable (down from 28 to 24).
There was also a decrease in temporary orders issued, with 5
freeze directions obtained, compared to 13 in the previous year. 12
proceedings (concerning 40 respondents) were commenced before the
Commission – down from 18 proceedings concerning 55
respondents in the previous year. Quasi criminal statistics
remained steady with a slight increase, with 10 proceedings
commenced, concerning 12 respondents, as compared to the previous
year's 10 proceedings concerning 10 respondents. While executed
search warrants were down (from 69 to 52), Criminal Code
proceedings doubled from 2 to 4, and the number of respondents
increased from 3 to 8.
Concluded hearings and settlements before the Commission were
also down (from 31 to 26), however, the breakdown of sanctions
remained steady with 53 cease trade orders (down from 58), 54
exemptions removed (steady from 54), 36 director and officer bans
(down from 39), and 35 registration restrictions (down from 40).
Total monetary awards did in fact increase from $52,970,941 to
$59,026,455 (the latter number not including the $164,260,580 that
respondents in three settlement agreements undertook to return to
investors directly). Reciprocal orders mirroring those in other
jurisdictions were up from 12 to 17.
Concluded matters before the courts were up, however (from 5 to
9), with 24.5 months of jail sentences meted out (down from 41), 42
months of conditional sentences (up from nil), $296,000 in fines
(up from $10,000), and $335,634 in restitution (down from
In Ontario Securities Commission v. Tiffin, the Ontario Court of Justice clarified the limits of the definition of "securities" under s.1(1) of the Securities Act, as it relates to promissory notes. The defendant in the case was charged with trading in securities without being registered and while prohibited, and without filing a prospectus.
The OSC has issued a press release advising stakeholders that Ontario securities law may apply to any use of distributed ledger technologies, such as blockchain, as part of financial products or service offerings.
The use of electronic signatures is becoming increasingly commonplace in commercial transactions, as individuals and businesses capitalize on the administrative efficiency afforded by today’s digital world.
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