What follows is Narwal Litigation LLP’s official statement, which details the troubling course of events leading to the collapse of the prosecution and calls for an independent investigation into the conduct and systemic practices of both the BCSC and the Vancouver Police Department.

All Charges Dropped Against Sean Pollard: Crown Counsel Terminates Prosecution Amid Revelations of Investigative Conduct and Systemic Failures

October 9, 2025

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On June 23, 2020, the Canadian Securities Administrators (CSA) released its fiscal year 2019/20 Enforcement Report, which outlines how securities regulators are protecting investors and the integrity of Canada’s capital markets.

Highlights from the fiscal year 2019/20 Enforcement Report include:

• 66 Investor Alerts were issued to warn the public about possible investment scams;
• 65 individuals were banned from participating in the capital markets;
• 95 interim cease-trade and asset-freeze orders were issued;
• Four individuals received a combined total of 18 years and 11 months years of jail time through regulators’ support of Criminal Code case investigations;
• 23 fraud cases were concluded, resulting in over $3 million in penalties; and
• 291 whistleblower tips were received.

“The CSA is a vital platform for nationwide collaboration and information sharing in the enforcement of securities laws in Canada. This year’s Enforcement Report outlines how CSA members protected Canadians from those who prey on investors and undermine confidence in the capital markets,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “Our resolve to work together was particularly critical in the last part of fiscal year 2019/20 when the COVID-19 pandemic hit and drove immense economic uncertainty. Our mission to safeguard investors and ensure that Canada’s capital markets are honest, fair and efficient has never been more important than it is today.”

Since the trading of securities and derivatives spans provincial and national boundaries, CSA members worked closely to share information, refer cases and seek assistance. This past fiscal year, members referred 91 cases to each other and provided assistance in 63 cases. They also cooperated with self-regulatory organizations in Canada, securities regulators in other countries, and law enforcement agencies in Canada and abroad.

In addition, the report outlines how the CSA enhanced its technological tools and skills to conduct investigations and better recognize and target fraudulent activity.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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Some of the key amendments will give the BCSC increased power to freeze and seize property transferred to third parties for below market value, seize registered retirement savings plans, and prevent offenders from renewing driver’s licences and plates until fines are paid.

To improve enforcement, the province is increasing maximum fines and jail terms for repeat offenders of “significant” offences. Another amendment sees the ability of the BCSC to order administrative penalties without a hearing for violations of regulations or decisions. A further amendment gives BCSC investigators greater powers to obtain information.

Once Bill 33 is passed into law, time will tell whether amendments will be effective in assisting the BCSC to collect penalties and improve enforcement. One thing is certain: defence lawyers will certainly mount constitutional challenges to some of these amendments.

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The Canadian Securities Administrators (CSA) released its fiscal year 2018/2019 Enforcement Report, which outlines how securities regulators are protecting investors and the integrity of Canada’s capital markets.

The report highlights the cross-jurisdictional collaboration and investments in technology that have enabled CSA members to detect and deter misconduct amid the emergence of new technologies and threats.

“As our world becomes increasingly digital, enforcement of securities laws must also evolve,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “This year’s Enforcement Report shows that by deploying sophisticated investigative tools and techniques and by continuing to strengthen our connections – with each other, global enforcement partners and other regulators – we are keeping pace with emerging trends in Canada’s capital markets.”

Recognizing that securities misconduct goes beyond borders, CSA members continued to strengthen efforts to collaborate with each other and securities regulators in other countries by sharing best practices and aligning on enforcement priorities. This included advancing the multijurisdictional response to emerging pump-and-dump threats as part of the Cross-Border Market Fraud Initiative and hosting global representatives at the annual Insider Trading and Market Manipulation Conference.

The CSA also continued the development of a data repository and analytics system that will help CSA members improve efficiencies and identify market misconduct faster and earlier.

Highlights from the fiscal year 2018/19 Enforcement Report include:

• 42 cases involving collaboration between CSA member jurisdictions;
• 100 cease-trade and asset-freeze orders issued;
• 63 individuals banned from participating in the capital market;
• 12 offenders received a combined 36 years of jail time under the Criminal Code; and,
• 46 Investor Alerts issued to warn the public about possible investment scams.

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The B.C. Securities Commission must be gentler with its handling of some securities violators, the Court of Appeal for British Columbia has determined. In particular, the regulator should be extra careful when it hands out a permanent ban, the court has ruled. Such bans can interfere with a person’s ability to earn a living, and should only be considered after an examination of lesser options.

The directive from the Court of Appeal is contained in a decision released on Friday, April 20. It stems from the case of Larry Keith Davis, an investor relations man who received a permanent ban from the BCSC in 2016. BCSC enforcement staff said that Mr. Davis offered to sell shares in an OTC Bulletin Board company to his neighbour. He then used her money for personal expenses, and never delivered the shares.

The matter went to a hearing before a BCSC panel, at which Mr. Davis argued that he was a victim of circumstances. The company that he worked for (Formcap Corp.) had promised him the shares after it completed a rollback. He said that he sold the shares to his neighbour on the basis that she would get the stock as soon as he did. Unfortunately for everybody, he never received the shares, he said.

The BCSC panel rejected Mr. Davis’s arguments, noting that he was well aware that Formcap was having serious financial troubles when he sold his neighbour the shares. Moreover, after his neighbour sought the return of her money, he continued to deceive her, the regulator determined. He told her that there was no money available as it was tied up in market.

When it came to penalties, the BCSC found that Mr. Davis’s actions constituted more than a minor offence. When he sold the shares to his neighbour, Wendy McDonald, he “not only knew he did not have any Formcap shares to sell to [Ms. McDonald] but also knew the previously proposed Formcap share consolidation had been abandoned and the company was having serious financial difficulties. Yet, he proceeded to agree to sell [Ms. McDonald] another 30,000 Formcap shares which he did not own on the same terms and conditions.”

For those reasons, the BCSC decided to impose a permanent ban. It also ordered Mr. Davis to pay $15,000. In doing so, it noted that the amount of money at issue was relatively small ($7,000) but Mr. Davis’s continuing deceit amounted to the “most serious misconduct” that the BCSC regulated.

The penalty, however, was not properly considered, at least according to the Court of Appeal. In its Friday ruling, the court determined that the BCSC should have looked at a lesser penalty for Mr. Davis. While much of the ruling hinges on technical points of law, the Court of Appeal heard that Mr. Davis had worked in the industry for decades without attracting any regulatory sanctions.

Of more importance, at least to other potential regulatory targets, is the fact that the Court of Appeal identified an error in the BCSC’s approach to the ban. The regulator imposed it without considering if a lighter sanction would suffice. A permanent ban is an extreme measure that should only be considered under a specific set of circumstances, the ruling states. Such bans are for instances when the public has been abused, an individual is resistant to governance, there is an element of criminal activity or there is a reason to believe that the individual could not be trusted to deal honestly with the public, the Court of Appeal found.
For those reasons, the Court of Appeal has sent the case back to the BCSC to have another look at Mr. Davis’s penalty. While Mr. Davis won the sanctions part of the appeal, he lost another part of the appeal in which he had contested his liability. The decision was unanimous, all three judges having agreed.

This article contains general information only and is not intended to provide a legal opinion or advice. Please consult a lawyer for matters related to your situation before relying on any of the statements made in this article.