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Key takeaways
- Mark Morabito and Jetlines faced a lengthy investigation by the British Columbia Securities Commission over insider trading and disclosure allegations, which eventually led to an abuse of process claim.
- The British Columbia Court of Appeal found procedural unfairness in the adjudication of the abuse of process claim, but the settlement on August 22, 2025, closed the case without resolving the abuse of process question.
- The outcome raises questions about whether there should be independent oversight for securities regulation in British Columbia, mirroring practices in Ontario.
As we discussed in our previous blog posts (November 30, 2023 and May 28, 2025), Mark Morabito and Global Crossing Airlines Group Inc. (formerly known as Canada Jetlines Ltd.) (Jetlines) were engaged in protracted proceedings before the British Columbia Securities Commission (the BCSC) and the British Columbia Court of Appeal (BCCA), including a dispute over whether the BCSC proceedings constituted an abuse of process. On August 22, 2025, the BCSC’s executive director (the director) entered into a settlement agreement with Mark Morabito and Jetlines, bringing the seven-year proceeding to a close — with implications for procedural fairness.1
Background
Mr. Morabito was the executive chairman and a director of Jetlines, a start-up ultra-low-cost airline carrier.2 In August 2018, the BCSC commenced an investigation into Mr. Morabito for insider trading allegations after he transferred Jetlines shares to his spouse and disclosed the trade to the BCSC.3 In a Notice of Hearing issued in October 2021, the director further alleged that Jetlines failed to make timely disclosure of material information (the termination of a letter of intent to lease aircraft needed to meet its announced start-up date), contrary to the Securities Act, R.S.B.C. 1996, c. 418, and that Mr. Morabito authorized that contravention.4
Abuse of process claims
In early 2023, as set out in our previous blog post, Mr. Morabito and Jetlines applied to stay the BCSC proceedings as an abuse of process, citing issues with the conduct of the investigation and the director’s disclosure practices. Mr. Morabito and Jetlines alleged that the BCSC improperly probed into Mr. Morabito’s life (including confronting his spouse at his residence, investigating his elderly father, and compelling production of his young daughter’s personal emails), failed to disclose the terminal illness of a key witness before his death, and refused to disclose other relevant documents.5
A BCSC panel heard the application at a blended hearing alongside the substantive allegations against Mr. Morabito and Jetlines6 and dismissed it on August 17, 2023.7 Mr. Morabito and Jetlines appealed the decision to the BCCA. On November 15, 2024, the BCCA held that the blended hearing was procedurally unfair, including by shielding the relevant investigators from cross-examination.8 The Court set aside the panel’s decision and remitted the abuse of process applications to a newly constituted BCSC panel.9 The BCSC subsequently dismissed Mr. Morabito and Jetlines’ application for recusal of a member of the new panel on the grounds of a reasonable apprehension of bias arising from prior involvement in earlier panel decisions, citing the high burden required for demonstrating bias.10
The settlement
On August 22, 2025, prior to the hearing of the remitted abuse of process applications scheduled for December 2025,11 the director entered into a settlement agreement with Mr. Morabito and Jetlines.12 Under the settlement agreement, Jetlines admitted that it failed to make timely disclosure of a material change about its business and affairs after terminating a letter of intent in early 2018, contravening the continuous disclosure requirements under s. 85 of the Securities Act.13 Mr. Morabito admitted that by operation of s. 168.2(1) of the Act, he authorized, permitted, or acquiesced in Jetlines’ contravention and thereby contravened the same provision.14 Jetlines and Mr. Morabito undertook to make a joint-and-several voluntary payment of $100,000 to the BCSC.15 No admissions regarding the insider trading allegations were made and the director issued a notice of discontinuance stating that the proceedings against the respondents were discontinued, considering it would not be prejudicial to the public interest to do so.16
Takeaways
Notably, the settlement did not resolve or otherwise address the question of whether the proceedings constituted an abuse of process; that question, which was the subject of the applications remitted by the Court of Appeal, was not determined on the merits. Although the question of how allegations of abuse of process for reasons other than delay should be analyzed by administrative bodies remains unanswered, the BCCA has provided some guidance through these proceedings regarding procedural fairness and abuse of process, including that
- blending the hearing of applications alleging an abuse of process with the hearing on the merits may prevent a fair determination of the abuse of process issues, as in this case,17
- where an applicant adduces credible evidence of abuse, the evidentiary burden may shift to the respondent to respond in a meaningful way. In Mr. Morabito’s case, the BCCA held that the director cannot rely solely on a witness with no first-hand knowledge of the investigation while shielding the actual investigators from cross-examination.18
It remains to be seen how the BCSC will apply the BCCA’s guidance in future investigations and hearings. The issues raised by these lengthy proceedings reinforce the relevance of the question we raised in our previous post: whether British Columbia should follow the lead of other securities regulators in establishing an independent tribunal separate from Commission staff, such as the Ontario Securities Commission’s Capital Markets Tribunal.
Footnotes
2. Settlement Agreement, Global Crossing Airlines Inc. (formerly known as Canada Jetlines Ltd.) and Mark Morabito, 2025 BCSECCOM 364 [PDF], at para. 1, items 1 and 2.
3. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at paras. 1–2.
4. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at para. 11.
5. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at para. 3; Abuse of process: the continuing saga of Morabito, “Background”.
6. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at para. 27; Abuse of process: the continuing saga of Morabito, “Background”.
Abuse of process: the continuing saga of Morabito, “Background”.
7. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at para. 35;
Abuse of process: the continuing saga of Morabito, “Background”.
8. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at para. 80;
Abuse of process: the continuing saga of Morabito, “The BCCA’s decision”.
9. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at para. 91; Abuse of process: the continuing saga of Morabito, “The BCCA’s decision”.
10. Re Mark Morabito, 2025 BCSECCOM 133, at para. 50; Abuse of process: the continuing saga of Morabito, “The BCSC’s subsequent decision”.
11. Abuse of process: the continuing saga of Morabito, “The BCCA’s decision”.
13. Settlement Agreement, Global Crossing Airlines Inc. (formerly known as Canada Jetlines Ltd.) and Mark Morabito, 2025 BCSECCOM 364 [PDF], at para. 1, items 3–8 (“Admissions”).
14. Settlement Agreement, Global Crossing Airlines Inc. (formerly known as Canada Jetlines Ltd.) and Mark Morabito, 2025 BCSECCOM 364 [PDF], at para. 1, item 9 (“Admissions”).
15. Settlement Agreement, Global Crossing Airlines Inc. (formerly known as Canada Jetlines Ltd.) and Mark Morabito, 2025 BCSECCOM 364 [PDF], at para. 1, item 10 (“Undertaking”).
17. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at para. 80.
18. Morabito v. British Columbia (Securities Commission), 2024 BCCA 377, at paras. 66–67.
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