Securities Law & Instruments

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5 AS AMENDED AND IN THE MATTER OF DAVID M. O'BRIEN

ORDER (Subsection 9(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended and Rule 8.1 and subrule 5.2(1) of the Commission's Rules of Procedure (2012), 35 O.S.C.B. 10071)

WHEREAS on December 8, 2010, the Secretary of the Ontario Securities Commission (the "Commission") issued a Notice of Hearing, pursuant to sections 37, 127 and 127.1 of the Ontario Securities Act, R.S.O. 1990, c. S.5, as amended (the "Act"), for a hearing to commence at the offices of the Commission on December 20, 2010 at 10:30 a.m., or as soon thereafter as the hearing could be held;

AND WHEREAS the Notice of Hearing provided for the Commission to consider, among other things, whether, in the opinion of the Commission, it is in the public interest, pursuant to section 127 of the Act, to issue temporary orders against O'Brien, as follows:

(a) O'Brien shall cease trading in any securities for a prescribed period or until the conclusion of the hearing on the merits in this matter;

(b) O'Brien is prohibited from acquiring securities for a prescribed period or until the conclusion of the hearing on the merits in this matter; and

(c) Any exemptions contained in Ontario securities law do not apply to O'Brien for a prescribed period or until the conclusion of the hearing on the merits in this matter;

AND WHEREAS on December 20, 2010, the hearing with respect to the issuance of the temporary orders was adjourned until December 23, 2010 at 12:30 p.m.;

AND WHEREAS on December 23, 2010, a hearing with respect to the issuance of the temporary orders was held and the panel of the Commission considered the affidavit of Lori Toledano, a member of Staff of the Commission ("Staff"), the cross-examination of Toledano and the submissions made by Staff and O'Brien;

AND WHEREAS on December 23, 2010, the Commission issued a temporary cease trade order pursuant to section 127 of the Act ordering that:

(a) O'Brien shall cease trading in securities;

(b) O'Brien is prohibited from acquiring securities; and

(c) Any exemptions contained in Ontario securities law do not apply to O'Brien (the "Temporary Cease Trade Order");

AND WHEREAS on December 23, 2010, the Commission ordered that the Temporary Cease Trade Order shall expire on April 1, 2011;

AND WHEREAS a confidential pre-hearing conference was scheduled for February 24, 2011;

AND WHEREAS at the confidential pre-hearing conference on February 24, 2011, Staff and O'Brien appeared and made submissions regarding the disclosure made by Staff, and Staff requested an extension of the Temporary Cease Trade Order;

AND WHEREAS on February 24, 2011, the Commission ordered that:

a) a hearing to extend the Temporary Cease Trade Order shall take place on March 30, 2011 at 11:30 a.m.;

b) a motion regarding disclosure shall take place on April 21, 2011 at 10:00 a.m., and in accordance with rule 3.2 of the Commission Rules of Procedure (2010), 33 OSCB 8017 (the "Rules of Procedure"), O'Brien shall serve and file a motion record, including any affidavits to be relied upon, by April 11, 2011 at 4:30 p.m.; and

c) a further confidential pre-hearing conference shall take place on May 30, 2011 at 10:00 a.m.;

AND WHEREAS on March 30, 2011, a hearing with respect to the extension of the Temporary Cease Trade Order was held, and the panel of the Commission considered the evidence filed and the submissions made by Staff and O'Brien, and the Commission ordered that:

a) the Temporary Cease Trade Order shall be extended to April 26, 2011; and

b) a further hearing to extend the Temporary Cease Trade Order shall take place on April 21, 2011 at 10:00 a.m.;

AND WHEREAS on April 21, 2011, a hearing with respect to the extension of the Temporary Cease Trade Order was held, and the panel of the Commission considered the evidence filed and the submissions made by Staff and O'Brien;

AND WHEREAS on April 21, 2011, the Commission ordered that:

a) the Temporary Cease Trade Order shall be extended until the conclusion of the hearing of the merits of this matter; and

b) O'Brien may, if he wishes to do so, apply to the Commission for an order revoking or varying this Order pursuant to section 144 of the Act;

AND WHEREAS also on April 21, 2011, O'Brien brought a motion regarding disclosure, wherein he sought an order from the Commission requiring Staff to provide him with all additional disclosure materials without requiring him to execute a further undertaking, and the panel of the Commission considered the evidence filed and the submissions made by Staff and O'Brien;

AND WHEREAS on April 21, 2011, the Commission ordered that Staff shall provide further disclosure materials to O'Brien without requiring the signing by him of an undertaking as to the confidentiality of that disclosure. The Commission further ordered that:

1) all disclosure materials provided to O'Brien are confidential and may be used by him only for the purpose of making full answer and defence in this proceeding. The use of disclosure materials for any other purpose is strictly prohibited. All disclosure materials provided to O'Brien are subject to the strict confidentiality restrictions imposed by section 16 of the Act;

2) O'Brien is also subject to the implied undertaking that all disclosure materials provided to him are subject to the restrictions on use referred to in paragraph (1);

3) the Previous Undertaking signed by O'Brien is binding upon him and applies by its terms to all of the disclosure materials provided by Staff to O'Brien, including all disclosure materials provided by Staff to O'Brien in the future; if O'Brien wishes to challenge the validity of the Previous Undertaking he is entitled to bring a motion before the Commission to do so; and

4) if O'Brien wishes to use the disclosure materials provided by Staff to him for any purpose other than as provided in paragraph (1), he must make an application to the Commission under section 17 of the Act for an order of the Commission consenting to that use;

AND WHEREAS at the confidential pre-hearing conference on May 30, 2011, Staff and O'Brien appeared and Staff sought to set dates for a hearing on the merits, while O'Brien advised the Commission that he was opposed to Staff's request. The Commission adjourned the hearing to June 20, 2011 at 10:00 a.m., for the purpose of setting the dates for the hearing on the merits;

AND WHEREAS at the confidential pre-hearing conference on June 20, 2011, Staff and O'Brien appeared and scheduling of the hearing on the merits was discussed and the Commission ordered that:

1. the hearing on the merits is to commence on March 12, 2012 at 10:00 a.m. at the offices of the Commission, and shall continue on March 14, 15, 16, 19, 20, 21, 22, 23, 26, and 28, 2012, or such further or other dates as may be agreed upon by the parties and fixed by the Office of the Secretary; and

2. a further confidential pre-hearing conference shall take place on January 11, 2012 at 10:00 a.m.;

AND WHEREAS at the confidential pre-hearing conference on January 11, 2012, Staff appeared and Counsel on behalf of O'Brien appeared, who advised the Commission that he had just been appointed to represent O'Brien in this matter and he requested that the pre-hearing conference be continued in a few weeks time to permit him to address certain matters that had just been brought to his attention. The Commission ordered that a further confidential pre-hearing conference take place on January 31, 2012 at 3:30 p.m.;

AND WHEREAS at the confidential pre-hearing conference on January 31, 2012, Staff and Counsel for O'Brien appeared and Counsel for O'Brien requested an adjournment of the hearing on the merits to permit interim issues to be raised before the Commission. Counsel for O'Brien also requested that the records from both the January 11 and 31, 2012 confidential pre-hearing conferences be sealed and treated as confidential. The Commission ordered that the hearing dates of March 12, 14, 15, 16, 19, 20, 21, 22, 23, 26 and 28, 2012 be vacated, a further confidential pre-hearing conference take place on March 12, 2012 at 10:00 a.m., and that the records from both the January 11 and 31, 2012 confidential pre-hearing conferences be sealed and treated as confidential pursuant to subsection 9(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended (the "SPPA") and rule 8.1 and subrule 5.2(1) of the Rules of Procedure;

AND WHEREAS at the confidential pre-hearing conference on March 12, 2012, Staff and Counsel for O'Brien appeared and Counsel for O'Brien requested a confidential motion be scheduled to seek an adjournment of the hearing dates. The Commission ordered that a confidential motion take place on April 18, 2012 at 10:00 a.m., for which O'Brien shall serve and file a motion record, including any affidavits to be relied upon, by April 5, 2012 at 4:30 p.m., Staff shall serve and file any responding materials by April 12, 2012, O'Brien shall serve and file a factum by April 13, 2012, and Staff shall file its factum by April 16, 2012, and that the records from the March 12, 2012 confidential pre-hearing conference and from the April 18, 2012 confidential motion shall be sealed and treated as confidential pursuant to subsection 9(1) of the SPPA and rule 8.1 and subrule 5.2(1) of the Rules of Procedure;

AND WHEREAS at the confidential motion on April 18, 2012, Staff and Counsel for O'Brien appeared and Counsel for O'Brien presented evidence and requested an adjournment of any hearing dates and that a further confidential pre-hearing conference be scheduled. Staff did not oppose the adjournment request and agreed to the scheduling of a further pre-hearing conference. The Commission ordered that a confidential pre-hearing conference shall take place on July 19, 2012 at 10:00 a.m., for which O'Brien shall deliver any materials relevant to the pre-hearing conference by July 9, 2012, and that the records from the July 19, 2012 confidential pre-hearing conference shall be sealed and treated as confidential pursuant to subsection 9(1) of the SPPA and rule 8.1 and subrule 5.2(1) of the Rules of Procedure;

AND WHEREAS confidential pre-hearing conferences took place on July 19, 2012, September 28, 2012, October 25, 2012, March 11, 2013, July 18, 2013, September 30, 2013, and December 11, 2013, at which Staff and Counsel for O'Brien appeared, and the Commission ordered that the records from those confidential pre-hearing conferences be sealed and treated as confidential pursuant to subsection 9(1) of the SPPA and rule 8.1 and subrule 5.2(1) of the Rules of Procedure;

AND WHEREAS on December 11, 2013, the Commission ordered that a confidential pre-hearing conference take place on March 6, 2014 at 10:00 a.m.;

AND WHEREAS at the confidential pre-hearing conference on March 6, 2014, Staff appeared, and no one appeared for O'Brien. Staff made submissions and requested that a further confidential pre-hearing conference be scheduled, and the Commission ordered that a confidential pre-hearing conference take place on May 8, 2014 at 10:00 a.m.;

AND WHEREAS at the confidential pre-hearing conference on May 8, 2014, Staff and Counsel for O'Brien appeared, presented evidence, made submissions and requested that a further confidential pre-hearing conference be scheduled. The Commission ordered that a confidential pre-hearing conference shall take place on September 15, 2014 at 9:00 a.m, O'Brien shall file and serve any materials on which he intends to rely at the pre-hearing conference by September 8, 2014, and the records from the May 8, 2014 and September 15, 2014 confidential pre-hearing conferences shall be sealed and treated as confidential pursuant to subsection 9(1) of the SPPA and rule 8.1 and subrule 5.2(1) of the Rules of Procedure;

AND WHEREAS at the confidential pre-hearing conference on September 15, 2014, Staff and Counsel for O'Brien appeared, presented evidence, made submissions and requested that a further confidential pre-hearing conference be scheduled;

IT IS HEREBY ORDERED THAT:

1. a confidential pre-hearing conference shall take place on January 12, 2015 at 9:00 a.m.;

2. O'Brien shall file and serve any materials on which he intends to rely at the pre-hearing conference by January 8, 2015; and

3. the records from the September 15, 2014 and January 12, 2015 confidential pre-hearing conferences shall be sealed and treated as confidential pursuant to subsection 9(1) of the SPPA and rule 8.1 and subrule 5.2(1) of the Rules of Procedure.

DATED at Toronto this 15th day of September, 2014.

"Mary G. Condon"

 

Alexander Christ Doulis and Liberty Consulting Ltd. -- s. 127 and OSC Rules of Procedure

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5 AS AMENDED AND IN THE MATTER OF ALEXANDER CHRIST DOULIS (aka ALEXANDER CHRISTOS DOULIS, aka ALEXANDROS CHRISTODOULIDIS) and LIBERTY CONSULTING LTD.

ORDER (Section 127 of the Securities Act; Ontario Securities Commission Rules of Procedure (2012), 35 O.S.C.B. 10071)

WHEREAS on January 14, 2011, the Ontario Securities Commission (the "Commission") issued a Notice of Hearing, returnable on March 10, 2011, in relation to a Statement of Allegations brought by Staff of the Commission ("Staff") with respect to Alexander Christ Doulis (also known as Alexander Christos Doulis, also known as Alexandros Christodoulidis) ("Doulis") and Liberty Consulting Ltd. ("Liberty") (together, the "Respondents");

AND WHEREAS on March 10, 2011, the Commission heard an application by Staff for a temporary order, pursuant to section 127 of the Act, and the Commission reserved its decision;

AND WHEREAS on September 9, 2011, the Commission ordered (the "Temporary Order") that:

(1) Pursuant to paragraph 2 of subsection 127(1) of the Act and subsection 127(2) of the Act, Doulis and Liberty shall cease trading in any securities, except for the benefit of Doulis personally or that of his spouse, Sally Doulis;

(2) Pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Doulis and Liberty; and

(3) This Order shall take effect immediately and remain in effect until the completion of the Merits Hearing or until further order of the Commission.

AND WHEREAS on April 12, 2012, at a status update hearing, the Commission ordered that this matter should return before the Commission on May 29, 2012 for a Pre-Hearing Conference;

AND WHEREAS on May 29, 2012, the Pre-Hearing Conference was adjourned to June 12, 2012;

AND WHEREAS on June 12, 2012, on the consent of Staff and counsel for Doulis, the Pre-Hearing Conference was adjourned to June 26, 2012;

AND WHEREAS on June 26, 2012, a Pre-Hearing Conference was held, and on the consent of Staff and counsel for Doulis, the hearing on the merits ("Merits Hearing") was scheduled for February 4, 5, 6, 7, 8, 11 and 13, 2013, and the Pre-Hearing Conference was adjourned to be continued on August 17, 2012;

AND WHEREAS on August 17, 2012, a Pre-Hearing Conference was held, and on the consent of Staff and counsel for Doulis, the Pre-Hearing Conference was adjourned to be continued on September 18, 2012, at 4:00 p.m.;

AND WHEREAS on September 13, 2012, Staff advised the Commission that Staff and counsel for Doulis and Liberty agreed that the Pre-Hearing Conference scheduled for September 18, 2012 should be vacated and the matter continued to the Merits Hearing;

AND WHEREAS the Merits Hearing took place on February 4, 7, 8, 11 and 13, 2013 and on April 3, 4 and 5, 2013, and closing submissions were scheduled to be heard on July 3, 2013;

AND WHEREAS on April 5, 2013, the Commission, with the consent of Staff and counsel for Doulis, ordered that Staff must file and serve its written submissions by May 17, 2013, the Respondents must file and serve their written submissions by May 31, 2013, Staff must file and serve its written reply submissions by June 7, 2013, and that closing arguments would be heard at an oral hearing on July 3, 2013;

AND WHEREAS Staff filed and served its written submissions on May 17, 2013 and Doulis filed his written submissions on May 27, 2013, but Doulis did not serve his written submissions on Staff until June 13, 2013;

AND WHEREAS the written submissions that Doulis served on Staff differed from the written submissions that he filed with the Office of the Secretary;

AND WHEREAS on May 23, 2013, Doulis filed and served a document titled "Notice of Constitutional Question" which appears to have been served on the Attorney General of Ontario and the Attorney General of Canada, with respect to constitutional submissions he proposes to make in this matter;

AND WHEREAS at the hearing on July 3, 2013, it became clear that the matter is not ready to be heard;

AND WHEREAS on July 3, 2013, the Commission ordered that: (i) the hearing scheduled for July 3, 2013 is vacated; (ii) by July 10, 2013, Doulis shall file his written submissions with the Office of the Secretary in accordance with Rule 1.5.4 of the Commission's Rules of Procedure (2012), 35 O.S.C.B. 10071 (the "Rules"), and serve his written submissions on Staff, in accordance with Rule 1.5.1 of the Rules; (iii) by July 10, 2013, Doulis shall file and serve his Notice of Constitutional Question, any responses received from the Attorney General of Ontario and the Attorney General of Canada, and his written submissions on the constitutional question; (iv) by July 24, 2013, Staff shall file and serve its written submissions in response to the documents filed and served by Doulis on July 3, 2013; (v) the closing argument of Staff and the Respondents will be heard on July 30, 2013, at 10:00 a.m., or such other date as is agreed by the parties and set by the Office of the Secretary; and (vi) by August 31, 2013, Staff shall file with the Office of the Secretary its redacted hearing brief, in accordance with the Commission's Practice Guideline -- April 24, 2012, Use and Disclosure of Personal Information in Ontario Securities Commission's Adjudicative Proceedings;

AND WHEREAS on July 3, 2013, after the hearing, Doulis filed with the Office of the Secretary and advised that he served on Staff a document entitled "Factum of the Respondent Alexander Christ Doulis Submitted May 27, 2013, resubmitted Wednesday, July-03-13" and a brief containing a Notice of Constitutional Question and related documents;

AND WHEREAS the closing argument of Staff and the Respondents was heard on July 30, 2013, at 10:00 a.m.;

AND WHEREAS following the Merits Hearing, the Commission issued its Reasons and Decision with respect to the Merits Hearing on September 18, 2014;

AND WHEREAS the Commission is of the opinion that it is in the public interest to make this order;

IT IS HEREBY ORDERED THAT:

1. Staff shall serve and file written submissions on sanctions and costs by 4:00 p.m. on September 24, 2014;

2. the Respondents shall serve and file responding written submissions on sanctions and costs by 4:00 p.m. on September 29, 2014;

3. Staff shall serve and file reply written submissions on sanctions and costs (if any) by 4:00 p.m. on October 2, 2014;

4. the hearing to determine sanctions and costs will be held at the offices of the Commission at 20 Queen Street West, 17th floor, Toronto, ON, on October 7, 2014, at 3:00 p.m., or such further or other dates as agreed by the parties and set by the Office of the Secretary;

5. the hearing to determine sanctions and costs shall commence on October 7, 2014 at 3:00 p.m. and be conducted by way of an electronic hearing where only the Panel will participate via teleconference, as defined in section 1.1 of the Rules and subsection 1(1) of the Statutory Powers Procedure Act, RSO 1990, c S.22 as amended (the "SPPA"), unless a party objects as provided under subsection 5.2(2) of the SPPA;

6. a party who objects to the hearing on sanctions and costs being conducted by way of an electronic hearing where only the Panel will participate via teleconference, shall file and serve a notice of objection setting out the reasons for the objection within 5 days after receiving notice of the electronic hearing;

7. a notice of objection shall set out the reasons for the objection and be accompanied by any evidence and any law relied on in support of the objection satisfying the Panel that holding an electronic hearing by teleconference rather than an oral hearing is likely to cause the party significant prejudice; and

8. upon failure of any party to attend at the time and place aforesaid, or upon failure by any party to file and serve a notice of objection that holding the hearing on sanctions and costs by way of an electronic hearing by teleconference is likely to cause the party significant prejudice, the hearing may proceed in the absence of that party, and such party is not entitled to any further notice of the proceeding.

DATED at Toronto this 18th day of September, 2014.

"Vern Krishna"