A group of executives have lost a legal challenge to the multimillion-dollar regulatory sanctions against them.
In 2022, the regulatory tribunal found that a pair of companies, First Global Data Ltd. and Global Bioenergy Resources Inc., along with four executives — First Global’s CEO, Andre Itwaru, and its CFO, Nayeem Alli, and Global Bioenergy’s co-founders, Harish Bajaj and Maurice Aziz — violated securities law when they raised $4.5 million for First Global, purportedly to finance natural resource projects in Colombia.
The tribunal found that all of the companies and executives engaged in illegal distributions, that Global Bioenergy and its executives (Aziz and Bajaj) defrauded investors, and that First Global and its executives (Alli and Itwaru) misstated its financials.
The respondents were collectively fined more than $3 million and ordered to pay more than $1 million in costs. They were also ordered to disgorge almost $5 million. Aziz and Bajaj were permanently banned, and Alli and Itwaru were prohibited from trading for five years.
On Wednesday, the Ontario Superior Court of Justice denied an appeal brought by executives Aziz, Alli and Itwaru, who appealed both the findings that they violated securities law and the associated penalties imposed on them.
The trio argued the tribunal erred in finding they violated securities law. They asked the court to set aside that ruling and dismiss the allegations against them, or send the case back to the tribunal.
Failing that, they asked the court to reduce the sanctions and costs, or to send that issue back to the tribunal too.
On appeal, however, the court concluded that “the tribunal did not make any reversible errors that would justify interfering with the merits decision.”
As for the appeal on sanctions and disgorgement, the court ruled in favour of the tribunal, saying, “[T]he tribunal’s decision is ultimately a discretionary and fact-intensive exercise deserving of deference.” The court also said the tribunal’s findings “were grounded in the evidence and it properly exercised its discretion in determining sanctions.”
In rejecting the appeal on sanctions, the court ordered the appellants to pay costs to the OSC.
This article has been updated to clarify the tribunal’s findings against specific companies and executives.