General Archives - Thauli Law

British Columbian Couple to Pay $19 Million Debt Despite Bankruptcy Proceedings

Harveen Thauli — Sun, 11 Sep 2022 01:58:04 +0000

In a recently published article in BIV – Business Intelligence For British Columbia and entitled, “B.C couple still owes $19M despite bankruptcy, appeal court rules,” Graeme Wood shares developments in the case of Thalbinder Singh Poonian and Shailu Poonian, a British Columbian couple who are permanently banned from working in the capital markets after a British Columbia Securities Commission (BCSC) panel found they had misappropriated approximately $7 million from unsuspecting investors. According to the 2015 BCSC decision, the Poonians sold overpriced shares to unsophisticated investors through a business entity that advised people on how to pay off debts by accessing their retirement savings accounts. Ordered to repay 5.5 million to investors and an additional 13.5 million in administrative penalties, the Poonians’ case has stalled over the years on multiple accounts. Last year, the BCSC secured a declaration from the BC Supreme Court exempting the Poonians from bankruptcy proceedings, which the couple appealed and the Court of Appeal denied in a ruling on August 5, 2022. As a result, the Poonians must pay the $19 million they owe in full.

Further, in 2021, the Poonians lost an appeal to the Minister of National Revenue to have their debt (including an additional $6 million in unpaid taxes) discharged. With debt forgiveness provided to those who require a “fresh start,” the BC Supreme Court specified that the Poonians, who continue to deny misconduct and have yet to repay any of their debts, do not fit this profile and that their actions were “morally unacceptable and harmful to society, such that they should not be rewarded with a release of those debts.”

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The Metaverse: What We Know So Far

Harveen Thauli — Fri, 01 Jul 2022 22:53:21 +0000

This article entitled “The Metaverse Is on the Way: Here’s What You Need to Know” was written by Andrew Morse and Scott Stein and published by CNET in March 2022. Plotting the trajectory of the Metaverse, Morse and Stein conclude that tech giants and developers have only scratched the surface. With an evolving definition, there are few points of agreement. Most align with the idea that the Metaverse will consist of online spaces where people can socialize, work and play. These spaces are shared and always available, working alongside or overlaying themselves in our physical world. Users will have an avatar, which will be of their design and own digital assets recorded on a blockchain.

With that said, a consensus has yet to be reached on several prominent details. Most notably, it is still uncertain how users will engage the Metaverse. With all arrows pointing toward a fully immersive experience, household Virtual Reality and Augmented Reality headsets become the most viable option for the Metaverse to reach this potential. Another is whether there will be one or many Metaverses. With large companies like Meta, Microsoft and Sony vying for first-mover advantage, it is unclear whether these companies will unify to create a single Metaverse that will combine their different services or create distinctly separate Metaverses that prioritize potential profits.

With much still to be discovered, the Metaverse has the opportunity to redefine how we engage with each other online as well as challenge notions of ownership in an increasingly virtual world.

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SEC Considers Banning Payment for Order Flow

Harveen Thauli — Tue, 04 Jan 2022 00:05:55 +0000

Mark Kolakowski published his article entitled, “SEC Considers Banning Payment for Order Flow” on October 22, 2021 on Investopedia.com. A payment for order flow (PFOF) is the payment that a broker receives from a market maker who processes the trades for the broker’s client. Robinhood Markets is one such broker that does not charge commissions for trades and earns its revenues through PFOFs. The trades do not occur on exchanges but through dark pools or other “not lit” wholesalers. For example, when a client makes a trade, Robinhood sends it to a market maker (such as Citadel Securities or Virtu Financial), which then matches buyers and sellers internally instead of sending them to exchanges. The market maker profits off the spread between the bid and ask, and then sends a part of that profit back to Robinhood.

This practice is banned in Canada Australia and the United Kingdom, and it may soon become banned in the United States. The current Securities and Exchange Commission Chairman, Gary Gensler is pushing for an overhaul of the US’s current trading regime so that the system is more fair for retail investors. He says that so much trading happens off exchanges that the “best price” on an exchange may be different from the best overall market price. Despite this, Mr. Gensler has not committed to saying that all trading should happen on exchanges.

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New TSX-V Capital Pool Company (CPC) Rules in Effect

Harveen Thauli — Fri, 16 Apr 2021 17:28:43 +0000

This article entitled, “New and Improved TSX-V Capital Pool Company Program Rules Now in Effect” was prepared by James Leech and Michael J. Hanley of Torkin Manes LLP and posted on January 15, 2021. Their article provides a helpful summary of the new CPC rules. One of the significant changes is that the deadline of 24 months for a CPC to complete a Qualifying Transaction no longer applies. Other rules have also been relaxed, including lower distribution and public float requirements, a reduced escrow period, and relaxed director and officer requirements. This is good news for companies wishing to list a shell while searching for an appropriate qualifying transaction.

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How Bitcoin is Revolutionizing the Investment Space

Harveen Thauli — Wed, 29 Nov 2017 18:33:59 +0000

The Pacific Capital Markets Association published this article called, “How Bitcoin is revolutionizing the investment space” on November 20, 2017. The article provides an overview of Bitcoin’s history, investing in Bitcoin and its safety.

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.

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Securities Law and Equine Law – There is a Connection!

Harveen Thauli — Fri, 03 Jul 2015 02:55:11 +0000

An avid racetrack fan decides that she would like to own her own race horses, but the problem is she doesn’t have enough money to pay for their training and boarding as well as all of the entrance fees. As she contemplates how to fulfill her dream of owning horses, it strikes her that if she incorporates a company, she could then sell shares to raise money. The proceeds would be used to care for, train and enter the horses in races. She remembers, however, that her friend, a securities lawyer once told her that certain rules have to be followed before the sale of any shares.

The shares described in this scenario fall within the definition of a “security” in the provincial Securities Acts across Canada. Before the sale of any shares, the person wanting to sell the shares must file a prospectus unless she is relying on an exemption from that requirement. Since the avid racetrack fan in this example would only sell to people she knows, there is an exemption available to her in National Instrument 45-106 – Prospectus and Registration Exemptions (“NI 45-106”), which is law across Canada. Section 2.20 of NI 45-106 is known as the “private investment club” exemption and would permit our racetrack fan to sell shares to certain people who are not considered members of the “public” such as those related to her, close personal friends or close business associates. Although it may sound simple, I highly recommend speaking to an experienced securities lawyer who can guide you through the complicated world of securities regulation. More often than not, I’ve seen many people try to figure out the rules on their own only to find themselves explaining their intentions before an investigator in the Enforcement department of a securities regulator.

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

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Delayed – The Cooperative Capital Markets Regulatory System

Harveen Thauli — Tue, 28 Apr 2015 18:56:01 +0000

The launch of the Cooperative Capital Markets Regulatory System (CCMR) has been delayed one year and is now expected to begin operation in the fall of 2016. The federal government announced its commitment to implementing the CCMR in the 2015 federal budget. The below excerpt is from pages 254 and 255 of the budget.

It was also recently announced that Neil de Gelder (British Columbia), Susan Wolburgh Jenah (Ontario), Grant J. Kook (Saskatchewan), David G. Barry (New Brunswick) and The Honourable Michael Wilson (Canada) are the members of the nominating committee that will recommend candidates for the CCMR’s initial board of directors.

Excerpt from the 2015 Federal Budget

Cooperative Capital Markets Regulatory System

The Government is moving forward to implement the Cooperative Capital Markets Regulatory System, in partnership with provinces and territories.

Following additional public consultations, the Government intends to take legislative actions to strengthen Canada’s capital markets framework and better protect investors. In addition, the Government intends to make legislative amendments to fight white-collar crime that will allow the Financial Transactions and Reports Analysis Centre of Canada to disclose relevant information to provincial securities regulators.

British Columbia, Ontario, Saskatchewan, New Brunswick, Prince Edward Island, Yukon and Canada are jointly engaged in the creation of the Cooperative Capital Markets Regulatory System. The Cooperative System is designed to preserve local perspectives while streamlining the capital markets regulatory framework to enhance Canada’s financial services sector, support efficient capital markets and manage systemic risk. Participating jurisdictions are making progress on refining a federal-provincial legislative framework and developing a harmonized regulatory rulebook. Participating jurisdictions will release this summer updated consultation draft capital markets legislation, along with draft initial regulations, for public comment. The responsible Ministers of the participating jurisdictions will appoint in the coming months an initial board of directors for the new Capital Markets Regulatory Authority. Along with its provincial and territorial partners, the Government continues to invite all provinces and territories to participate in the implementation of the Cooperative System. If jurisdictions choose to operate outside the Cooperative System, they will have a constructive partner in the new Authority, with the ultimate goal of providing efficient access to capital markets.

The Benefits of the Cooperative System

Uniform provincial capital markets legislation to deal with provincial aspects of securities regulation.
Complementary federal capital markets legislation to address criminal matters and systemic risk related to capital markets.
A jointly established Capital Markets Regulatory Authority to administer both the provincial and federal legislation.
A single set of regulations designed to protect investors, while supporting responsive, efficient and innovative capital markets.
Priorities set on a national basis based on a single executive team, organized throughout the country, and accountable to an expert board of directors.
Single filing of prospectus with review conducted by the local office of the capital markets regulatory authority.
Fees established to fund the regulatory system, not to raise general revenue for participating governments.

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