The Ontario Superior Court of Justice has upheld an appeal by the Ontario Securities Commission (OSC), which sought to overturn a lower court decision dismissing charges the securities regulator brought against advisor Daniel Tiffin and his firm, Thornhill, Ont.-based Tiffin Financial Corp.
In 2016, the Ontario Court of Justice dismissed allegations against Tiffin and the firm that they traded securities without registration, distributed securities without a prospectus and traded while prohibited by the OSC, by borrowing $700,000 from six insurance clients in exchange for promissory notes.
The lower court dismissed the charges on the basis that the promissory notes did not count as securities under provincial securities legislation. Instead, the court found that they should be considered private loans.
The OSC appealed the lower court’s ruling and argued that the promissory notes in question did count as securities.
The Superior Court sided with the OSC, allowed the appeal, and substituted a conviction in the case.
Among other things, the trial judge “erred in law” by considering a U.S. legal test to help determine whether the promissory notes were excluded from the statutory definition of “security” in Ontario’s Securities Act, the Superior Court stated in its decision.