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Alberta

OSC withdraws some charges against former CannTrust leaders at pretrial hearing

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VAUGHAN, Ont. — Three former CannTrust Holdings Inc. leaders accused of securities offences have had some charges dropped, the Ontario Securities Commission said Tuesday, though the fraud charges remain.

The withdrawn charges against Peter Aceto, Mark Litwin and Eric Paul were linked to making false or misleading statements to the Ontario Securities Commission through CannTrust press releases, OSC spokesperson JP Vecsi said in an email.

The charges were withdrawn to reduce the length of the upcoming trial and help “focus the issues” because of what’s expected to be a “complex” prosecution, said Ontario Securities Commission lawyer Dihim Emami, in a virtual pretrial hearing held Tuesday.

“By doing so, we will save trial time and distraction that would be required to argue the securities law issue related to those counts,” Emami told judge Tim Lipson over a Zoom video conference.

Aceto, Paul and Litwin still face charges of fraud and ofauthorizing, permitting or acquiescing in the commission of an offence.

Litwin and Paul are also facing insider trading charges and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus.

The charges were first laid by the OSC in June 2021, roughly three years after CannTrust was found to be growing thousands of kilograms of cannabis in unlicensed rooms.

The OSC and Royal Canadian Mounted Police allege Litwin, Aceto and Paul did not disclose to investors that about 50 per cent of the growing space at CannTrust’s Pelham, Ont. facility was not licensed by Health Canada. They say the men used corporate disclosures to assert that they were compliant with regulatory approvals.

They also allege that Litwin and Aceto signed off on prospectuses used to raise money in the U.S., which stated that CannTrust was fully licensed and compliant with regulatory requirements, and that Litwin and Paul traded shares of CannTrust while in possession of material, undisclosed information regarding the unlicensed growing.

Aceto, who served as chief executive, was terminated for cause by CannTrust’s board in July 2019. Former chairman Paul resigned in response to a demand from the company’s board at the same time and former vice-chairman Litwin resigned in March 2021.

Scott Fenton, Litwin’s lawyer, said in an email to The Canadian Press that he and his client are “pleased” with the withdrawal of some charges and expect those remaining to be “vigorously contested at trial.”

Aceto and Paul’s lawyers did not immediately respond to a request for comment.

Aceto’s counsel previously said “the evidence will show that he acted with integrity at all times.“ Paul’s counsel has said “the evidence will show (Paul) did nothing wrong.”

Their trial is set to begin in October and is expected to last until mid-December.

In the wake of the allegations, CannTrust was delisted from the Toronto Stock Exchange and filed for creditor protection.

It has since been trying to stage a comeback and exited creditor protection in March, after receiving $17 million in financing from a subsidiary of Kenzoll B.V., a Netherlands -based private equity investment company.

In May, it renamed itself Phoena Holdings Inc. and said it will continue to review alternatives to obtaining a stock exchange listing for its common shares.

This report by The Canadian Press was first published May 25, 2022.

Tara Deschamps, The Canadian Press

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Alberta

Calgary Stampede receives $10M from federal government to aid recovery from pandemic

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Calgary – The Calgary Stampede has received more than $10 million from the federal government to help it bounce back after last year’s event was scaled down due to the COVID-19 pandemic.

A report to the city this week showed the Stampede had an operating loss of $8.3 million in 2021.

Last year’s Stampede ran at half capacity because of COVID-19 public health measures and was cancelled all-together the year before.

Daniel Vandal, the federal minister for Prairies Economic Development Canada, says the money aims to support a full-scale Stampede to deliver the “authentic western experience” this year.

He says it would also help to reignite Alberta’s visitor economy.

The 2022 Stampede is set to run from July 8 to 17.

“Festivals large and small were hard hit during the pandemic,” Vandal said in a news release. “They are events where families and friends come together and take in the exciting atmosphere.

“The tourism industry is facing a strong comeback providing quality jobs across the country, showcasing stunning landscapes and offering exciting experiences right here in Alberta.”

The federal government also provided about $1.8 million for four other tourism projects in southern Alberta: Charmed Resorts, Cochrane Tourism Association, Heritage Park and Tourism Calgary.

This report by The Canadian Press was first published June 30, 2022.

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Alberta

Alberta Utilities Commission approves $31M ATCO fine, says in public interest

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The Alberta Utilities Commission has approved a $31-million fine proposed for ATCO Electric’s attempts to overcharge ratepayers for costs it shouldn’t have incurred.

In April, ATCO Electric agreed to pay the penalty after a commission investigation found it deliberately overpaid a First Nation group for work on a new transmission line.

It said ATCO also failed to disclose the reasons for the overpayment when it applied to be reimbursed by ratepayers for the extra cost.

But in May, the Consumers’ Coalition of Alberta said the proposed settlement doesn’t adequately compensate people in the province for the harm they have suffered.

The commission says in its ruling that after carefully considering the settlement agreement, it is satisfied that accepting it is consistent with the public interest.

The commission also says the agreement would not bring the administration of justice into disrepute.

“The commission considers that the settlement is fit and reasonable, falling within a range of reasonable outcomes given the circumstances,” reads the ruling released Wednesday.

The settlement came after an investigation into a complaint that ATCO Electric sole-sourced a contract in 2018 for work needed for a transmission line to Jasper, Alta.

The agreement says that was partly because another of Calgary-based ATCO’s subsidiaries had a deal with a First Nation for projects, including for work camps on the Trans Mountain Pipeline expansion.

The statement of facts says ATCO Electric feared that if it didn’t grant the Jasper contract to the First Nation, it might back out of its deal with ATCO Structures and Logistics. It’s illegal for a regulated utility to benefit a non-regulated company in this way.

This report by The Canadian Press was first published June 29, 2022.

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