Ontario’s Capital Markets Tribunal has dismissed allegations brought by the Ontario Securities Commission (OSC) against a securities lawyer, alleging that he misled and defrauded investors in connection with the preparation of press releases for a company that sought to capitalize on the hype surrounding non-fungible tokens (NFTs).
In 2024, the OSC filed an enforcement proceeding against Ahmed Kaiser Akbar, alleging that he breached securities rules in connection with the issuance of misleading press releases by a venture company, SoLVBL Solutions Inc., touting its deal with another company, New Foundation Technologies Corp., that would purportedly use SoLVBL’s technology to issue NFTs.
The regulator alleged that investors were misled when the company raised $4 million in a couple of private placements following the announcements because, among other things, there was no real work done on the NFT deal, apart from announcing it — and the proceeds of private placements were actually used to repay debts to company insiders, including Akbar.
While the tribunal found that the press releases did contain false and misleading statements, it also ruled that the OSC failed to prove that Akbar breached securities rules.
Among other things, the panel found issues with how the regulator framed its allegations against Akbar in its original application for an enforcement proceeding (AEP) and argued the case at the hearing raised fairness concerns.
The panel said Akbar argued that “it would be an error of law, and procedurally unfair, for the Tribunal to make findings of liability based on allegations that are not anchored in the [AEP], particularly where the allegations involve fraud.”
And, the tribunal agreed, concluding “that there was insufficient particularization of the allegations … to define the issues, prevent surprise and allow the respondent to prepare for the hearing.”
As a result, it declined to hold Akbar liable for the alleged misrepresentations in the company’s releases.
The tribunal also rejected the allegations that Akbar engaged in fraud — finding that it was the company, not Akbar, that made the false statements in the press releases.
“The [essence] of the commission’s case against Akbar was that, in drafting press releases that contained false statements and omissions, Akbar was the direct perpetrator of a fraud on the investing public … a proposition which we find unsupportable in both fact and law,” it said.
“The alleged fraud is against the investing public, who were the recipients of the press releases. However, Akbar did not make the statements at issue to the investing public; SoLVBL did,” it noted — adding that there is insufficient evidence for it to conclude that Akbar caused SoLVBL to issue the releases.
“In conclusion, we dismiss the application for enforcement proceeding brought by the commission against Akbar in its entirety,” the tribunal said in its decision.