Online discount brokers will be able to push more information to do-it-yourself investors, and provide them with a broader array of tools to facilitate their investing decisions, under new guidance being proposed by the Canadian Investment Regulatory Organization (CIRO). The self-regulatory organization (SRO) seeks to draw a clearer boundary between full-service firms and so-called order execution only dealers (OEO dealers).

The new guidance, which is out for public comment until Nov. 10, aims to address the demand from industry firms that are keen to expand the communications that they can have with investors, without going offside of the long-standing prohibition on discount brokers providing investors with advice. It also addresses the growing concerns that regulators have about investors’ increasing reliance on unregulated sources of investment information, such as finfluencers and social media generally.

“Our objective … is to provide flexibility that allows OEO dealers to better service clients’ needs in this channel without compromising investor protection … while remaining consistent with the [dealer] rules, which prohibit recommendations in OEO accounts,” CIRO said in a notice detailing its proposals.

To that end, the SRO is seeking to tighten its guidance around the prohibition on the provision of advice by discount brokers.

Under the current guidance, discount brokers are prohibited from providing investors with communications that could “reasonably be expected to influence” investors’ specific investing decisions — an approach that has made dealers cautious about providing information to investors that could be construed as driving their investing decisions, and putting firms offside with regulators.

Yet, at the same time, the online availability of investing material has grown exponentially in recent years, exposing investors to a vast, unregulated trove of information — and misinformation — that may well be influencing investors’ decisions.

In response, CIRO is now proposing to tighten its guidance to allow OEO dealers to provide a broader array of communications — including alerts, notifications, tools and sample portfolios — without straying over the line into providing specific advice.

“The new guidance clarifies that OEO dealers are allowed to provide informative resources and decision-making supports to clients as long as they do not endorse a specific investment decision and are provided with adequate safeguards,” the SRO explains in its consultation.

Under the proposed new guidance, discount brokers would be allowed to, “send targeted, proactive communications to clients as long as they are purely educational and do not endorse any specific investment decisions.”

The regulators hope that by expanding the ability of OEO dealers to communicate with investors, this will “help reduce investors’ reliance on social media or other non-regulated sources, fostering more confident and informed investment decisions.”

No free-for-all

At the same time, the regulators aim to maintain the prohibition on discount brokers straying into the provision of advice, which means that it also won’t be a free-for-all in terms of what firms are allowed to send to investors — dealers will still have to be wary of overstepping that line.

For instance, the proposed guidance indicates that the provision of multiple pieces of information that, taken together, amount to pushing a specific investment decision would still be prohibited.

Additionally, under the proposed guidance, firms would not be allowed to select specific investment products for sample portfolios that are provided to clients, again for fear that this could stray into driving an investment decision.

“OEO dealers cannot avoid the revised recommendation prohibition by simply stating that a sample portfolio is not tailored to a specific client if, in every other regard, it meets the test of a recommendation,” the proposals said.

“Ultimately, the proposed guidance seeks to strike an appropriate balance between empowering investors to make informed decisions for themselves, promoting healthy capital markets by addressing the types of decision-making supports that OEO dealers can opt to offer to their clients and maintaining adequate investor protection,” the SRO said.

“Relying on unverified sources of information could put investors at significant risk of financial harm,” said Alexandra Williams, senior vice-president, strategy, innovation and stakeholder protection at CIRO, in a release.

“Giving investors greater access to high-quality, trustworthy and timely information from OEO dealers will not only help them make informed, confident investment decisions, but could also reduce their reliance on unregulated sources that may be providing incomplete, biased or misleading advice,” she added.

A life agent who created a GoFundMe fundraiser to help a client who was unable to access funds locked into a life insurance policy has been sanctioned by the Insurance Council of British Columbia (ICBC).

The regulator ordered the agent, Mengyuan Li, to complete certain ethics courses by Nov. 3 and to pay $3,125 in costs, after finding that she breached its rules and code of conduct by providing false income and employment information on a client’s whole life policy, setting up a GoFundMe to help the client when they needed money, and improperly using an insurer’s logo on a client presentation.

According to the regulator’s order, in 2021, Li opened an RRSP, a TFSA that required a weekly premium and a whole life policy for a new client, who was a student at the time.

In late 2022, the student filed a complaint alleging that she had misrepresented his employment and inflated his income on the policy application. He also claimed that he was told he could recover the premiums if he stopped paying them within a certain timeframe.

At the time, he was still a student and had no annual earnings, yet the policy listed him as self-employed with an $85,000 annual income.

According to the order, Li couldn’t remember whether it was the client or another agent who provided the income information, but that “she wrote down what she was told” and didn’t typically require income verification.

“She admitted that she genuinely believed the [client] was working at the time and never questioned whether he was a student,” the order said.

The regulator concluded that she breached the rules by improperly documenting the client’s income, although it said it was not clear where the incorrect information came from.

“Since she was new to the industry, it appeared she simply took down instructions that she was provided, without conducting further due diligence,” it said.

The council concluded that Li wasn’t fully responsible for the mistake because the client had the opportunity to read the policy and correct the mistake, and he ultimately signed it. It considered the possibility that he used the incorrect income information as an excuse to get out of the policy.

Additionally, the client complained that after he tried to withdraw the $11,000 he had paid in premiums from the policy to pay a relative’s medical bills, and was told he couldn’t access that money, Li created a GoFundMe account to help raise money for those bills and donated $5 to it, it noted.

“When the [client] learned the GoFundMe account was open to public donations, he deleted the account and made a formal complaint,” it said.

According to the order, Li said she created the fundraiser “because she understood the tough circumstances the [client] was in and that because she was unable to cancel the policy and return his premiums, she wanted to do what she could to help him in her personal capacity.”

The council found that she breached her obligation of client confidentiality by creating the GoFundMe account based on information about his financial circumstances that she learned in a professional capacity.

“Council believed [Li] had good intentions but noted that she did not seek out more appropriate alternatives to help her client,” it said. “… although this may not have been the best method to remedy the situation, it was well-intended and [she] sincerely tried to help the [client].”

Additionally, she co-operated in the investigation, it noted, in handing down sanctions.

A fund rep who raised over $3 million from several clients to finance the expansion of his business has settled charges that he breached securities rules by engaging in undisclosed personal financial activities with clients.

A hearing panel of the Canadian Investment Regulatory Organization (CIRO) approved a proposed settlement with Jeremy Earl Clark, a former rep with Investia Financial Services in Calgary, who admitted to breaching the self-regulatory organization’s rules.

According to the settlement, between 2019 and October 2022, Clark raised $1.6 million from a handful of clients to fund the expansion of his firm, CH Financial Ltd. It provides various services alongside the fund business, including financial planning, wills and estates services, tax preparation, loans and mortgages and insurance services. The investors became shareholders in the firm as a result.

Additionally, in 2022, the firm borrowed $1.5 million from another client. That money was repaid by mid-2023.

However, by engaging in these transactions and not disclosing them to his dealer, the SRO alleged that Clark violated its rules. It also alleged that he made misleading statements to his dealer when he failed to disclose the arrangements with clients.

According to the settlement, none of the shareholder clients have complained about their investments. They also provided the SRO with letters indicating that they were aware of the risks of investing in the firm and that they want to remain shareholders.

Under the settlement, Clark was fined $80,000, ordered to pay costs of $5,000 and banned from conducting securities-related business for 12 months.

Clark was terminated by his dealer on March 6, 2023, following its investigation into the personal financial dealings. He is not currently registered.

A former mutual fund rep, who was banned by the Ontario Securities Commission (OSC) 27 years ago, is now facing fraud allegations.

Back in 1998, an OSC hearing panel ordered that Dino Delellis — who was a fund rep with The Height of Excellence Financial Planning Group Inc. in London, Ont. — was permanently banned from registration after it found that he breached a number of securities rules in connection with the sale of a series of limited partnerships that invested in a cattle breeding scheme.

Among other things, the panel found that Delellis accepted undisclosed commissions, made misrepresentations to investors, and breached his fiduciary duty to investors.

Now, following an investigation by the OSC’s Criminal Investigations & Prosecutions team, Delellis has been charged with fraud and “making a prohibited representation” to investors, the regulator announced.

The new allegations have not been proven.

Delellis is scheduled to appear in court on Sept. 2 to answer those charges.

The OSC alleged that Delellis defrauded a couple of investors between July 2022 and the end of 2023.

“Specifically, it is alleged that Mr. Delellis used investor money for personal expenses, failed to invest funds as promised, promised to repay losses if one of the investors bought securities from him, and used a fake name to obscure his record of securities misconduct,” the regulator said in a release.

In 2020, a rep with CIBC World Markets Inc. was also sanctioned for his involvement with a so-called “gifting club” that he was introduced to by Delellis — which regulators found amounted to a pyramid scheme.

The Supreme Court of British Columbia ruled that, while the so-called winners in a large Ponzi scheme didn’t know they were part of a fraud, they must return the money they received to the bankruptcy trustee that’s heading the insolvency proceedings.

Back in June, the court granted an application from PricewaterhouseCoopers Inc. (PwC) — which is serving as trustee in bankruptcy for the company at the heart of an alleged $300 million Ponzi scheme, My Mortgage Auction Corp. — that sought an order allowing it to clawback money from investors that benefited from the scheme, and dismissing the efforts of certain investors to adjourn the proceeding.

Now, the court has issued its reasons for that ruling, which found that PwC’s proposed approach to clawing back money from investors who received profits from the scheme is “sound” and that the relief it sought from the court is “appropriate, both on legal and equitable grounds.”

In its reasons, the court said that, while there is no allegation that any of the winners knew that they were participating in an illegal Ponzi scheme, the payments they received amounted to proceeds of the fraud, and that they were unjustly enriched, as a result.

“No investor here is a ‘winner’ in the true sense — each is a victim,” the court said. “Yet, there is a substantial disparity in terms of the outcomes faced by the investors — with some investors reaping ‘profits’ from the scheme, often only by blind luck in terms of the timing of the scheme’s collapse …”

According to PwC, there were 480 investors that profited from the scheme to the tune of $68.2 million, while another 1,229 investors lost a combined $149 million. Another 81 investors received about $3.1 million in the months immediately preceding the scheme’s collapse.

Hardly any money has been recovered from the perpetrator of the scheme, and anything that the trustee has secured has been used to finance the recovery efforts. According to the court, the trustee and the receiver have done about $4 million worth or work on the file so far, and less than $1 million of that bill has been paid.

And, while it’s expected that about $3 million will be recovered from forthcoming corporate tax refunds, the only other source of recovery for the estate is clawing back money from the winners to finance a distribution to harmed investors.

Ultimately, the court concluded that the evidence “overwhelmingly establishes” that the investment activity that took place amounted to a Ponzi scheme — that investors’ profits from the scheme represent “fraudulent conveyances,” that the payment of these profits are void and that the money must be returned to the trustee. 

For some investors, the fact that they now have to pay back their “false profits” is compounded by the fact that they’ve already paid, “hundreds of thousands (if not millions) of dollars,” in income tax on those profits.

Indeed, the court said that, “Given the scale of the scheme, there is no doubt that [the Canada Revenue Agency] received millions of dollars in tax revenue on the false profits,” that were paid out while the scheme was running, between 2018 and 2023.

However, since every investor’s tax situation is unique, and the tax issues are “complex,” the court said that there’s no way to resolve the tax issues on a global basis — such as allowing the winners to offset the taxes they paid against the money they are expected to return to the estate — at this point.

“… The issue is very preliminary at this stage and cannot be addressed substantively,” the court said.

After ruling that the investors must repay their profits, the court’s order gave the trustee 30 days to provide affected investors with a calculation of what it thinks each investor owes. Investors were given 30 days to dispute that calculation.

In an effort to boost its appeal to foreign companies and investors, the Australian Securities and Investments Commission (ASIC) is expanding market access to foreign trading venues and forging greater ties with smaller Canadian exchanges in particular.

The ASIC announced that it’s in the final stages of reviewing an application from the Australian subsidiary of Cboe Global Markets — which currently trades securities listed on the primary market, the Australian Securities Exchange — to become a listing market in its own right.

“This move is expected to enhance competition and attract foreign investment, providing more choice for investors and greater international alignment,” the regulator said.

At the same time, the ASIC said it’s expanding the roster of approved foreign trading venues to include Cboe’s Canadian and U.S. exchanges, along with the Canadian Securities Exchange (CSE).

“This expansion will enable Australian investors to participate in certain transactions in these markets, further integrating Australia into the global financial system,” the regulator said.

The CSE is already in the process of acquiring the National Stock Exchange of Australia (NSX), a Sydney-based venture market. That deal, announced in May, requires regulatory, shareholder and Australian court approval.

Earlier this week, the NSX announced that the CSE has raised its offer for the company by 14%, and that the NSX pushed back its planned shareholder vote. The deal is now expected to close by the end of October.

The ASIC said the proposed acquisition “will enhance competition and bring global expertise to Australia’s capital markets.”

Alongside these moves, the ASIC reported that it’s considering reforms to “streamline dual listings” of foreign companies in Australia and is actively considering other innovative applications to attract international businesses to Australia’s public markets.

Touting its efforts to enhance competition and innovation in its capital markets and to attract more foreign capital, ASIC chair Joe Longo said: “Our capital markets are healthy and strong but face intensifying global competition for capital and listings. As superannuation funds grow and investors seek opportunities, our actions will help keep our markets efficient, innovative and attractive, supporting economic growth for all Australians.”

A software developer who worked at a newswire service has been fined $1.4 million and sentenced to six months in jail after pleading guilty to insider trading.

In 2022, a pair of Brampton, Ont.-based developers at Intrado Corp., which operates GlobeNewswire — Harpreet Saini and John Natividad — were charged with insider trading by both the Ontario Securities Commission (OSC) and the U.S. Securities and Exchange Commission (SEC). The regulators alleged that they traded on inside information acquired from corporate press releases before they were publicly released.

The OSC announced that Saini, who pled guilty in July 2024, has been sentenced to six months less a day in jail and fined over $1.4 million — comprised of full disgorgement of his illicit insider trading profits, plus $100,000 and a mandatory 25% surcharge. The regulator said he will also be subject to a 10-year trading ban.

According to the OSC, Saini admitted to accessing material, non-public information between May 2018 and July 2021 and to trading on that information over 500 times, generating US$770,000 in illicit trading profits.

“Employees who have access to confidential corporate information have a duty to safeguard that information and not misuse it for their personal benefit,” said Bonnie Lysyk, executive vice-president, enforcement, at the OSC, in a release.

“Insider trading is illegal, and it erodes investor confidence in our markets. The OSC will continue to use all the tools at our disposal to root out this type of misconduct and pursue bad actors,” Lysyk said.

The case against Natividad remains before the courts. The allegations against him have not been proven.

The proceedings in the U.S. were stayed by the U.S. District Court in New Jersey, pending the outcome of the Canadian cases against them.

While the SEC opposed granting a stay, the court ruled a stay was warranted in the interests of justice.

The Canadian Securities Administrators (CSA) are proposing a refined framework that will grant the Ombudsman for Banking Services and Investments (OBSI) the authority to issue binding compensation decisions. This reform, long recommended by independent experts, represents an important corrective to a system that has allowed financial firms to disregard fair and reasoned decisions without serious consequences.

While the refined framework represents a necessary step forward, its over-engineered design reflects the many compromises made to overcome governmental hesitation and industry opposition. A policy initiative that began with a clear objective — to guarantee consumers fair redress without relying on firms’ voluntary compliance — has evolved into a heavily structured process marked by layered procedures, multiple adjudicative stages and extensive oversight requirements.

Still, considering political and jurisdictional constraints, this version of binding authority is the most practical outcome available at this time. Further attempts to refine or recalibrate the framework would, at best, yield diminishing returns while distracting from more pressing priorities.

It is time to proceed with implementation and turn our attention to the broader task ahead: building a modern, accessible complaint-handling system. As that work proceeds, future oversight should be calibrated to support effectiveness by enhancing efficiency and responsiveness, rather than creating additional procedural burdens.

Despite the significance of binding authority, it will not resolve the more fundamental weaknesses that continue to define Canada’s redress landscape. Even with this reform in place, consumers will remain subject to a fragmented and opaque system. Navigating the complaint process often requires moving between internal firm procedures, multiple ombuds services and an array of provincial and federal regulators, each with distinct rules, timelines and jurisdictions. This complexity obscures accountability, discourages complaints and inhibits regulators from identifying and addressing emerging risks.

Moreover, the refined framework does little to strengthen the system’s ability to detect and respond to systemic issues. OBSI is uniquely positioned to identify patterns of misconduct and product deficiencies through its intake and investigation of individual complaints. However, without a clear mandate, dedicated resources and appropriate reporting frameworks, its ability to contribute to regulatory intelligence remains underutilized.

Systemic reform

If Canada is to achieve a redress model that is both credible and effective, it must look beyond institutional fixes and toward system-level reform. This means moving toward a unified, consumer-facing platform that offers a single point of access across all financial services sectors — banking, securities, insurance and beyond.

It means standardizing procedures, modernizing digital interfaces and ensuring that complaint processes are navigable regardless of product, provider or jurisdiction.

A national complaints portal — multilingual, accessible and transparent — could provide real-time progress tracking, standardized timelines and automatic escalation when firms fail to respond. It would also generate publicly available data on complaint volumes, resolution times and systemic patterns — supporting both consumer awareness and regulatory accountability.

Such a system would not only streamline redress but would also enhance investor protection and market conduct oversight. Importantly, it would allow ombuds services like OBSI to focus on resolving disputes and contributing to systemic risk detection, rather than navigating increasingly complex governance obligations.

In short, binding authority should be understood as a point of departure, not a destination. The priority now must be to design a redress framework that delivers fairness, accessibility and transparency at scale.

Canadians deserve a complaint-handling system that reflects the complexity of modern financial markets while remaining intelligible and responsive to those it is meant to serve. The path forward begins with implementing binding authority — but it cannot end there.

The Court of Appeal for British Columbia will hear a bid to overturn a lower court’s ruling that a marriage-like relationship existed between a couple, both now deceased, with the fate of a $3-million estate hanging in the balance.

Last December, the Supreme Court of B.C. was asked to rule whether the pair — Sharon Clark and Dikran Matheos Matossian — were in a relationship that amounted to marriage, a decision central to determining what would happen with Clark’s estate.

After she died without a will in 2020, Matossian sued Clark’s brother, the administrator of her estate, claiming he was entitled to inherit her assets on the basis that he was legally her spouse.

Matossian also died in late 2022 before the court could hold a hearing on the issue, and the claim was taken up by the executor of Matossian’s estate — leaving the court to decide whether they were spouses without direct testimony from either person, and amid considerable uncertainty.

According to the court, the pair met at a tennis club in 1982 and had a relationship that lasted until Clark died — yet there was a dispute about whether their relationship amounted to a marriage.

If their relationship was deemed not to be a marriage, Clark’s $3.1-million estate would go to her brother. If it was considered a marriage, her estate would go to Matossian’s estate to be distributed to his heirs, including his three nieces, a nephew and his executor, Marcus von Albrecht. The pair met von Albrecht at the same tennis club where their relationship started, when he became executive chef there in 2001.

“While the relationship between Ms. Clark and Mr. Matossian lasted 38 years, compared to most marriage-like relationships it was at least unconventional,” the court said. “They did not raise a family together. They did not share the same residence. Each of them was financially self-sufficient. They maintained no joint bank accounts, owned no joint assets and did not name each other as beneficiaries on their investments.”

Ultimately, the Supreme Court concluded that they were in a marriage-like relationship — and so, Matossian’s estate would be entitled to her assets.

Clark’s brother is now appealing that ruling.

The appeal court noted that the challenge will be to “identify an extricable error of law or an overriding and palpable error of fact.”

And while an earlier ruling indicated it will be tough to succeed on appeal, “given the heavily factual nature of the trial judge’s analysis,” the court concluded the appeal can go ahead.

“The argument is that the trial judge identified the parties’ intentions as a key consideration in determining whether a marriage-like relationship exists but focused his analysis on Mr. Matossian’s intentions, not Ms. Clark’s. The appellant submits that there was evidence of Ms. Clark’s intentions inconsistent with an intention, on her part, to engage in a marriage-like relation, but the judge overlooked or gave it no weight,” the court noted.

Ahead of the appeal hearing, von Albrecht asked the court to order Clark’s brother to post $108,000 in security for potential trial costs.

The court denied that request.

“Taking everything into account, I am unpersuaded that security for costs is required in the interests of justice. There is at least some merit to the appeal,” it said. “There is nothing exceptional about this appeal to make it appropriate that security for trial costs be ordered before the costs are assessed.”

Ontario’s Court of Appeal has refused to stay a lower court ruling that allows an estate trustee to sell two farm properties — originally gifted to a deceased man’s sons — to cover large tax liabilities now facing the estate.

In April, the Ontario Superior Court of Justice issued a decision in a complex estate case involving the interpretation of the will of William Archibald Stewart, who died in 1994. The key issue was whether the estate trustee had the authority to sell the properties, which were bequeathed to Stewart’s sons.

According to the decision, Stewart’s will provided for a life estate for his wife, with the farm properties to be sold to his sons for fixed prices set out in the will — $50,000 for one property and $90,000 for the other.

Complications arose because Stewart’s wife outlived him by more than 24 years. During that time, the value of the farm properties rose significantly, to $617,500 and $1.12 million respectively. After her death in 2018, the estate faced more than $600,000 in tax liabilities linked to the disposition of the properties. The Canada Revenue Agency placed a lien on the farms and threatened to seize and sell them to recover the taxes.

The estate trustee sought court approval to sell the properties to cover the debts, including the CRA’s tax claim. This was opposed by Stewart’s surviving son and his late brother’s widow, who argued that the sales would void the original gifts and that they should still be able to purchase the farms at the prices specified in the will.

The Superior Court sided with the trustee, ruling that she could sell the properties and was not bound to accept the original sale prices — which could have left her personally liable for the estate’s debts.

The Ontario Court of Appeal has now upheld that decision, rejecting a motion for a stay from the heirs.

According to the appeal court, the heirs want the trustee to avoid selling the properties outright and instead work out an arrangement that would allow them to retain the farms while the estate pays off its debts.

“It seems that [the heirs] believe they can best jockey for that outcome if the estate trustee remains in possession of the farms and they are in a position to exercise their options under the will,” the court noted. However, it found they failed to demonstrate grounds for a stay.

The court concluded that the heirs did not establish that they would suffer “irreparable harm” if the stay were not granted.

“The farms are not, on the facts, ‘unique.’ The issues appear to be all financial, leading to the conclusion that there is no irreparable harm,” the ruling stated.

The court also held that the “balance of convenience” favoured the estate trustee, who argued that a stay would increase the risk of CRA seizure and raise costs for the estate.

Ultimately, the Court of Appeal dismissed the motion, concluding: “There is no serious question to be decided for which a stay is required; the ground of irreparable harm has not been established; and the balance of convenience favours the estate trustee’s position.”