Two recent decisions of the Ontario Superior Court demonstrate the willingness of Canadian judges to find fraud on the basis of material omissions in both civil and criminal cases. In Midland Resources Holding Limited v. Shtaif, 2017 ONCA 320, 135 O.R. (3d) 481 and R. v. Fontana, 2016 ONSC 707,  omissions by the defendants were found to constitute fraudulent conduct.

Civil Fraud: Midland Resources Holding Limited v. Shtaif

In Midland Resources Holding Limited v. Shtaif, the Ontario Court of Appeal confirmed that the tort of deceit or fraudulent misrepresentation may:

 involve not only an overt statement of fact, but also certain kinds of silence: the half-truth or representation that is practically false, not because of what is said, but because of what is left unsaid.


Continue Reading

On May 26, 2016, the British Columbia Provincial Court dismissed Rashida Samji’s request for a stay of criminal fraud charges in R v. Samji.  The British Columbia Securities Commission had previously levied an Administrative Monetary Penalty (“AMP”) of $33 million against Samji, in relation to what the British Columbia Securities Commission found was a $100 million Ponzi scheme perpetrated by Samji between 2003 and January 2012. Samji had earned the nickname the “Magic Lady” for the large profits she claimed to generate for clients. Samji argued that the AMP was essentially a criminal penalty and the stigma that she has suffered as a result of media coverage amounted to criminal punishment. In light of the AMP, she argued that the Charter prevented double prosecution under both the Securities Act and Criminal Code.
Continue Reading

In a previous post, we reported on a then-ongoing Calgary trial involving an alleged $300 million Ponzi scheme affecting as many as 2,000 people, many of them Canadian.  The fraud represents one of the largest Ponzi schemes in Canadian history.  The accused individuals had already been sanctioned by the U.S. Securities and Exchange Commission and the Alberta Securities Commission.
Continue Reading

A Calgary trial is nearing conclusion on criminal charges against Gary Allen Sorenson (“Sorenson”) and Milowe Brost (“Brost”) relating to an alleged $300 million Ponzi scheme that operated between 1999 to 2008 with money from thousands of investors across the United States and Canada. The alleged scheme was orchestrated utilizing the sale of promissory notes issued by Syndicated Gold Depository, Inc. (“SGD”), an entity formed in 1999 by Sorenson and Brost. The two men were arrested in 2009 for what police called “the largest Ponzi-type scheme” in Canadian history.


Continue Reading

The Ontario Securities Commission (“OSC”) has almost completed its case in the high-profile Sino-Forest Corporation (“SFC”) hearing that began on September 2, 2014.  SFC and certain of its former executives are alleged to have engaged in widespread fraud relating to its public financial disclosure.  Specific allegations involve the fabrication or overestimation of revenue and assets, falsified evidence of ownership, backdated contracts, and undisclosed control over particular customers and suppliers.  The hearing is presently on a brief hiatus, with the respondents expected to begin their defence in late March of this year.
Continue Reading

A panel of the British Columbia Securities Commission has imposed an administrative penalty of $33 million against Rashida Samji for committing a $100 million fraud on at least 200 investors in its recent sanction decision. The scheme which the panel determined was a Ponzi scheme earned her the nickname the ‘magic lady’. The panel also ordered that Samji be permanently banned from participating in B.C.’s capital markets and ordered disgorgement of aproximately $10.8 million. This was the difference between the monies deposited by the investors pursuant to the fraud and the monies paid out to them.
Continue Reading

On September 2, 2014, the Ontario Securities Commission commenced its high-profile hearing in the case of the Sino-Forest Corporation (“SFC“). SFC is alleged to have engaged in widespread fraud relating to its public financial disclosure. The specific allegations involve the fabrication or overestimation of revenue and assets, falsified evidence of ownership, backdated contracts, and undisclosed control over particular customers and suppliers.
Continue Reading