In AMF v. TMF, Baazov, et al. (Court File No. 500-11-052989-171), the Quebec Superior Court confirmed that the Financial Markets Administrative Tribunal (the Tribunal) has the power to order the Autorité des marchés financiers (AMF), Quebec's securities regulator, to disclose documents to individuals against whom the AMF is seeking freeze orders and cease-trade orders in the course of an ongoing confidential investigation.

Freeze orders essentially prohibit a person from spending a single penny in his/her possession while cease-trade orders prohibit a person from trading on any and all securities he/she holds. These draconian orders are typically issued while the securities regulator is investigating the targeted person and remain in place for the duration of the investigation (i.e. months, if not years).

When applying to the Tribunal for the issuance of freeze and/or cease-trade orders, the AMF is free to decide which allegations it will make, which documents it will provide to support those allegations and which testimony it will put forward. As applications for freeze and/or cease-trade orders are made in the course of an ongoing confidential investigation, the AMF will choose to disclose what it believes is required to obtain the orders sought, but no more, so as to preserve the confidentiality of its ongoing investigation to the greatest extent possible.

For the first time in its history, further to requests by David Baazov and others and before hearing the AMF application for freeze and cease-trade orders, the Tribunal ordered the AMF to disclose specific documents.

As there is no right of appeal from such an order, the AMF applied to the Quebec Superior Court for judicial review. In its recent judgment, the Superior Court confirmed that even in the context of an ongoing and confidential securities investigation, the Tribunal has the power to order the disclosure by the AMF of documents:

  • that are directly related to the proceedings instituted by the AMF, to the allegations advanced by the AMF and/or to exhibits adduced in support thereof; and
  • that appear relevant, prima facie, to allow the individuals against whom the AMF is seeking orders to offer full answer and defense in the context of a fair hearing (débat loyal et équitable).

Moreover, given the significant consequences of freeze and cease-trade orders, the Superior Court confirmed that when the AMF chooses to launch proceedings seeking such orders, the AMF does not remain the sole arbiter of what is relevant and what needs to be disclosed.

Rather, insofar as the above two-pronged test is met and notwithstanding the confidentiality of the ongoing securities investigation, the Tribunal can, to preserve procedural fairness, order the disclosure by the AMF of additional documents to the individuals targeted by the AMF's requests.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see

Law around the world

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.