The Supreme Court of Canada will decide next week whether to hear an appeal from an asset manager on the standard a securities regulator needs to meet to get a court to appoint a receiver when it suspects possible misconduct.
The underlying case involves the Ontario Securities Commission’s (OSC) effort to have a receiver appointed over real estate investment firm Cacoeli Asset Management Inc.
In 2025, the Ontario Superior Court of Justice appointed a receiver for the firm, at the regulator’s request, after the OSC began investigating a complaint from the firm’s former chief financial officer about whether investors’ money was being used in projects other than those they had signed up for.
To date, the regulator hasn’t alleged any actual violations of securities law, and hasn’t filed any enforcement proceedings against the firm, or its executives.
The firm attempted to challenge the appointment of the receiver, arguing, among other things, that the OSC must have “strong prima facie” evidence that the firm has committed securities law violations to justify the court placing it into receivership.
However, the court ruled that the regulator only has to show that it has a “serious concern” about possible regulatory breaches in order to get a receiver appointed — a decision that was upheld on appeal to the Court of Appeal for Ontario.
Now, the firm is asking the Supreme Court of Canada to hear a further appeal on the standard for courts to use when deciding whether to grant a receivership sought by a securities regulator. The court will issue its decision on whether it will hear an appeal or not on Aug. 27.