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Introduction
For nearly fifty years, the proposition that a securities regulator may sanction conduct that breaches no provision of securities law has been more often stated than used. The Ontario Securities Commission said as much in Cablecasting Ltd (Re) in 1978, and the Capital Markets Tribunal confirmed in the 2024 decision in Riot Platforms, Inc v Bitfarms Ltd that orders made without a breach of securities laws remain exceptions rather than the rule.1
The numbers bear this out. Since 2014, findings of conduct contrary to the public interest in the enforcement context absent any contravention of Ontario securities law can be counted on one hand. They are comprised of matters involving the concealment of trading from an employer’s compliance function (Agueci,2 Kitmitto3), recommendations made while in possession of material non-public information (Azeff4, Kitmitto), and obstruction of a Staff investigation for which no express statutory prohibition exists (Daley5).
Outside of Ontario, the trend holds. The British Columbia Securities Commission has held since Re Carnes6 that where an allegation of a specific contravention fails, only in very rare circumstances will a public interest order issue on the same conduct.
Two features unite past jurisprudence about when public interest powers have been relied upon in enforcement matters. The findings have been directed at natural persons. And they have addressed discrete acts — a concealed account, a tip, a refusal to answer — rather than the adequacy of an institutional system.
Oasis World Trading Inc (Re),7 released by Ontario’s Capital Markets Tribunal in July 2026, departs from both traditional uniting features. The Tribunal found that Oasis, a corporation, engaged in conduct contrary to the public interest by failing to establish and maintain adequate systems of control and supervision, in circumstances where the statutory supervision obligation did not apply to it at all. It declined to make the same finding against the company’s two directors and officers. We are not aware of a prior Ontario decision in which a corporate respondent alone has been held to have acted contrary to the public interest on a standalone basis in an enforcement proceeding.
Background
Oasis described itself as a proprietary day trading firm. During the 2018-2020 period at issue it had more than 600 traders located in China. These traders conducted a high volume of day trading using Oasis’s trading platform to place trades on Canadian and Australian markets.
The Ontario Securities Commission alleged certain misconduct on the part of Oasis and two of its principals. The alleged misconduct included spoofing and wash trading.8
Oasis had been before the Commission previously. Under a 2015 settlement agreement, Oasis was required to retain a Commission-approved compliance monitor who redesigned Oasis’s compliance system and audited it in 2017.9
The panel found market manipulation, concluding that 568 of the 643 alleged spoofing instances involved non-bona fide orders, while dismissing the wash trading allegations. It also found that Oasis breached section 4.7(4) of NI 23-103 by passing on its direct electronic access to its traders, and that the two principals, Pang and Modi, authorized, permitted or acquiesced in that breach.
The public interest question in Oasis
The Commission alleged that Oasis was offside registration requirements. The Tribunal held that there was no language in the regulation that captured the Commission’s concerns about Oasis. Making its platform available to onboarded traders was not a standing solicitation of “the investing public” and an exemption was available to it under NI 31-103. Oasis did not breach section 25 of the Ontario Securities Act. Because Oasis was not a registrant, the obligation in section 32(2) of the Act to establish and maintain systems of control and supervision did not apply to it and could not be breached. The Tribunal stated that it was sympathetic to the Commission’s policy objectives but was unable to make Oasis’ conduct fall within an existing provision.
The Commission pleaded, in the alternative, that a failure to maintain adequate systems was contrary to the public interest. That alternative allegation is what the Tribunal went on to decide with respect to Oasis.
Riot crosses into the enforcement context
Riot concerned an application by an aggrieved party about a shareholder rights plan. Dispersed throughout Riot was a two-part test for a no-breach public interest order: i) the impugned conduct must undermine, in a real and substantial way, one or more clearly discernible animating principles underlying Ontario securities law; and ii) the conduct must have an effect that has a public dimension such that it is in the public interest for the Tribunal to intervene. The Tribunal in Riot also spoke of a requirement that conduct must not be justifiable under exceptional circumstances permitting it to continue10, although given the formulation of the underlying test and as can be seen in Oasis this can be read as a preservation of discretion rather than a strict requirement. The Tribunal in Riot left it to future panels to decide whether the analysis travelled to other kinds of proceedings such as enforcement proceedings.11
In Oasis, the Tribunal elected to apply the Riot standard to a Commission-initiated enforcement proceeding for the first time.
Practitioners should note the Tribunal’s statement about the extent to which application of the public interest standard was contested in Oasis. The Tribunal records that it received no detailed submissions from either side on whether the Riot approach was appropriate in an enforcement setting: the Commission simply asked that it be applied, and the respondents did not propose an alternative.12
The Tribunal finds conduct contrary to the public interest
The Tribunal located the applicable standard in NI 23-103 itself: sections 4.3 and 4.4 require a direct electronic access client to have reasonable knowledge of, and the ability to comply with, marketplace and regulatory requirements, and reasonable arrangements in place to monitor order entry. Measured against that standard, the panel found Oasis’s systems wanting.13 Trade supervision had been delegated to the Trading General Managers, who did not report to head office and whose activities head office could not see. There was effectively only one person at head office responsible for supervision, monitoring hundreds of thousands of monthly trades across a language barrier. Of roughly 59,000 alerts in the single category of broker-generated alerts Oasis chose to review, that person reviewed or commented on fewer than 1,500 and marked all but one “nothing to report”; for five months he reviewed none. No post-trade review of Australian trading was conducted in 2018, the year in which all of the Australian spoofing occurred. Records of what had been reviewed and how issues were resolved were, in the panel’s word, demonstrably lacking.14
The Tribunal found that Oasis’s failure to maintain an adequate supervision system over 600 traders undermined, in a real and substantial way, a core animating principle concerning the maintenance of fair capital markets in which trading is conducted with integrity and in which participants can have confidence.15 It also found that Oasis’s approach exposed other investors to a heightened risk of improper trading practices by its traders which is an effect extending beyond the parties.16
The panel did not address the residual question, articulated in Riot, of whether Oasis could point to exceptional circumstances to avoid an order notwithstanding those findings.
The public interest finding was entered against Oasis alone. Although the Commission had advanced the alternative allegation against Pang and Modi as well, the panel declined to extend it, not having heard submissions on the appropriateness of allocating responsibility for inadequate compliance to individuals in addition to the corporation.17 The contrast with the NI 23-103 finding is instructive. Section 129.2 supplied a route to individual liability there because there was a contravention of Ontario securities law for it to attach to.
Conclusion
Oasis serves as a warning that institutional parties may have obligations beyond those specifically described in securities legislation and national instruments. Oasis holds that the public interest jurisdiction can supply, in substance, an obligation that no securities law provision imposes directly and that such obligation may be enforced against.
The Oasis decision applied the Riot test for conduct contrary to the public interest in an enforcement matter in an essentially unopposed context. The Tribunal decided that applying Riot in this case was appropriate, leaving room for a differently argued case to reach a different result. A respondent prepared to argue for a different standard is not foreclosed.
The Tribunal in Oasis did not address the exceptional circumstances element mentioned in Riot. Nor is a future respondent foreclosed from invoking the exceptional circumstances element, which the panel left untouched in this case. That said, it may be very challenging for a respondent to demonstrate that conduct with the Tribunal otherwise finds has a public impact is otherwise justifiable.
The sanctions and costs hearing in Oasis is scheduled for December 11, 2026. Because that step has not yet occurred, Oasis still has time to appeal. Further guidance on the application of Riot’s public interest test in an enforcement context may yet be forthcoming.
Footnotes
1 Riot Platforms, Inc. v. Bitfarms Ltd., 2024 ONCMT 27 at para. 25 [Riot]. For comprehensive discussion of the public interest standing as applied in securities law more generally, see Paul Davis, “Justifiable Expectations Standard: The Basis for the Exercise of the Public Interest Power of the Ontario Securities Commission” (22 August 2014); and Paul Davis, Arjin Choi & Zach Lechner-Sung, “Ten Years Later: The Justifiable Expectations Standard and the Evolution of Public Interest Powers in Canada” (30 September 2024).
2 Agueci (Re), 2015 ONSEC 2.
3 Kitmitto (Re), 2022 ONCMT 12.
4 Azeff (Re), 2015 ONSEC 11.
5 Daley (Re), 2021 ONSEC 27.
6 2015 BCSECCOM 187 at para. 131.
7 Oasis World Trading Inc (Re), 2026 ONCMT 29 [Oasis].
8 Oasis at para. 5.
9 Oasis at paras. 23-24.
10 Oasis at para. 5.
11 Riot at para. 19.
12 Oasis at para. 191.
13 Oasis at paras. 211-224.
14 Oasis at para. 217.
15 Oasis at para. 240.
16 Oasis at para. 241.
17 Oasis at paras. 177-178.
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