Are Examinations by Video Conference the “New Normal” During COVID-19?

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial, Coronavirus, COVID-19, Investment | Financial Services, Investment Fraud, Professional Liability, Securities Fraud, Securities Litigation0 Comments

On March 17, 2020, Ontario declared a State of Emergency due to the COVID-19 pandemic and ushered in a new era of physical and social distancing rules.  Individuals are required to maintain a minimum distance of two metres from any other person who is not a member of the same household.  Gatherings of more than five people are banned unless they are members of a single household. Since March 17, 2020, the Ontario Superior Court of Justice has suspended all regular operations, including hearings for civil matters except urgent and time-sensitive motions and applications and other limited matters such as consent motions in writing.  Most of these hearings are conducted in writing, or remotely by telephone or video conference, due to physical and social distancing rules.  In-person hearings would only be granted in very limited circumstances. Although the Court may be closed for the time being, civil litigants and their … Read More

The Ontario Securities Commission and the “Active Market”

Peter Neufeld, B. Soc. Sc., J.D.Administrative Law, Appeals, Business Law, Business Litigation, Class Action Defence, Directors' and Officers' Liability, Finance Litigation, Investment | Financial Services, Professional Liability, Professional Services, Professions, Securities Litigation, Shareholder Disputes0 Comments

Determining what constitutes an “active market” for securities can have significant implications for Investment Dealers, Approved Persons, and other market participants facing civil lawsuits and regulatory scrutiny.  Such a determination provides ample assistance to investors seeking to quantify damages allegedly sustained through (1) misrepresentations in a company’s financial documents or (2) the negligence of their financial advisors. In Sutton (re), 2018 ONSEC 42, however, the failure to show an active market for securities proved devastating to the defence of a Chief Financial Officer (“CFO”) in charge of pricing those securities. Background  As CFO of First Leaside Securities Inc. (“FLSI”), Brian Sutton’s (“Mr. Sutton”) position required him to assess the price of certain unlisted securities (“Fund Units”) issued by three limited partnerships (“Funds”). In pursuit of meeting these obligations,  Mr. Sutton relied on the Fund Units’ allegedly active market to ascribe an appropriate price. The Industry Investment Regulatory Organization of Canada (“IIROC”) … Read More