The Ontario Securities Commission (OSC) has commenced enforcement proceedings alleging Ontario securities law violations by former investment fund manager Emerge Canada Inc., two of its directors and officers, and members of the Independent Review Committee (IRC) for the funds Emerge managed. The OSC alleges Emerge knowingly took an estimated CAD 6 million of investor money in self-dealing loans over nearly four years, with most of the funds used to support Emerge businesses in financial distress. Alleged misconduct includes breaching duties to investors, causing funds to enter into prohibited loans, failing to properly address the conflict of interest created by the receivable, and failing to maintain proper books and records or an adequate system of controls and supervision to ensure compliance. The OSC also alleges the Emerge IRC members’ response to the receivable breached their duties to investors and other securities law obligations, and that IRC inaction deprived investors of safeguards designed to protect them from this type of harm. The Application for Enforcement Proceedings has been posted on the Capital Markets Tribunal website, and the OSC noted the matter followed work across its Registrations, Inspections, and Examinations, Investment Management, and Enforcement divisions.
Ontario Securities Commission 2025-03-10
Ontario Securities Commission files enforcement application alleging Emerge Canada used CAD 6 million of fund assets for self-dealing loans
The Ontario Securities Commission (OSC) has initiated enforcement proceedings against Emerge Canada Inc., its directors, officers, and Independent Review Committee members for alleged Ontario securities law violations. The OSC claims Emerge engaged in self-dealing loans totaling CAD 6 million, breaching investor duties and lacking proper controls. The proceedings follow collaborative efforts across OSC's Registrations, Inspections, Examinations, Investment Management, and Enforcement divisions.