OSC must send case documents to Mexico: panel

Facebook LinkedIn Twitter An Ontario Securities Commission (OSC) panel has ruled that OSC enforcement staff cannot require a Mexico-based defendant to come to the commission’s office to view the evidence against it. The OSC Thursday published its reasons for a decision made back on September 20, which found that OSC staff have not complied with their disclosure obligations in their case against Cabo Catoche Corp. (aka Medra Corp.). According to the decision, Medra requested that copies of all relevant documents in the commission’s case against it be sent to its offices in Mexico. OSC staff refused, and advised the firm that the documents are available for inspection at its offices in Toronto. The decision indicates that staff refused to send copies to Mexico for fear that Medra would breach their obligation not to disclose the contents of the documents to third parties, under Ontario securities laws. They maintain that neither Medra, nor its Mexican counsel, can give an enforceable undertaking not to disclose the documents. And, that the firm has indicated that it intends to share the disclosure with Mexican authorities, breaching their confidentiality obligation. Therefore, staff argue they should not be required to provide Medra copies of the materials. However, the commission sided with the firm, which did not appear at the hearing. It says that a fundamental problem with OSC staff’s position is that “it draws an unsupportable distinction between respondents living in Canada at the time of disclosure and those living abroad.” Any respondent to a regulatory action could later decide to leave the country and take their disclosure with them, it notes. “In such cases, staff are equally powerless to stop misuse of the documents upon their removal from Canada.” The decision says that to ensure Medra understands the limitations on its use of the disclosure material and agrees to those limitations, OSC staff will not be required to provide copies of the documents to Medra until it provides a written undertaking that it will not disclose the documents. If it fails to provide the undertaking, OSC staff are not required to provide copies. If it gives the undertaking, and then breaches it, it could be subject to further sanctions. The panel will allow the OSC staff to redact any personal information about investors from the disclosure material. Share this article and your comments with peers on social media PwC alleges deleted emails, unusual transactions in Bridging Finance case James Langton Mouth mechanic turned market manipulator BFI investors plead for firm’s sale Keywords EnforcementCompanies Ontario Securities Commission Related news read more