Decision in brief: Phemex Limited, Enforcement Proceeding, Motion to strike, April 1, 2025

In an earlier decision, the Tribunal decided that the respondents broke Ontario securities law by selling securities without being registered to do so and without having filed a prospectus (a document that gives investors information about the investment) for those securities.

The next step in this proceeding is the hearing to decide about sanctions and costs. The OSC asked the Tribunal to strike (remove from the record) certain parts of the documents that the respondents filed in advance of the hearing. The OSC says those parts refer to settlement discussions between the parties that are meant to be confidential and cannot be used at the hearing (a rule known as “settlement privilege”). The respondents say that there are exceptions to this rule that apply to the parts of their materials that the OSC is asking the Tribunal to strike.

The Tribunal decided to strike all parts of the materials that refer to settlement discussions. The respondents did not convince the Tribunal that there were any exceptions to settlement privilege that applied.

The Tribunal did not strike references to Phemex cooperating with the Commission throughout the proceeding. Those references did not include any discussions protected by settlement privilege.