By Danica Bennewies
Welcome back to another Top Five Friday Finds – the weekly series where we share five of the top corporate and securities law news stories that have dominated our conversations this week. We took a short break last week, but now we’re back and ready to catch you up on the latest headlines.
One of the biggest stories of the week was Canada’s legalization of cannabis on Wednesday. The cannabis investment market has seen significant growth in the months leading up to legalization. In response to this growth, the Canadian Securities Administrators (CSA) published a review regarding best practices and common deficiencies of issuers in the cannabis industry. The review found that issuers’ disclosure practices in this area were subpar, and included guidelines for making improvements. In light of this review, the CSA will continue to monitor and assess disclosure practices in the cannabis industry to ensure that investors are receiving transparent information.
The Ontario Securities Commission (OSC) has also been busy protecting investors. This week, the OSC accused Toronto hedge fund K2 & Associates Investment Management Inc of “manipulative trading”. The OSC alleged that K2 engaged in “spoofing” – placing bids on an exchange and then removing them shortly after – thereby misleading investors as to the demand for these derivatives. This allowed K2 to trade at artificial prices, contrary to the public interest. A hearing has been scheduled to discuss a settlement.
Nova Scotia is strengthening investor protection as well. Recently, the Government of Nova Scotia passed Bill 67, which increases the Investment Industry Regulatory Organization of Canada’s (IIROC) investigative power in the province. The new bill gives IIROC access to the “full enforcement toolkit” – in other words, the legal authority to enforce fine collections and to collect and present evidence during investigations and hearings. Bill 67 also protects IIROC from any malicious lawsuits it may face when acting in good faith in the public interest. With the passing of this bill, IIROC now can enforce fine collection in seven provinces, and has access to the full enforcement toolkit in three.
Canada and the US are also trying to reach a settlement. The two countries have been in talks recently to negotiate an end to President Trump’s steel and aluminum tariffs prior to the formal signing of the United States-Mexico-Canada Agreement (USMCA). The USMCA deal was reached back in September, but Trump, who instituted the tariffs in June, has kept the metal tariffs place. Now, Canada is trying to reach a deal with the Trump administration, which would set a quota on exports of steel and aluminum to the US, in exchange for the lifting of the tariffs. The pressure to reach an agreement is on, as the formal signing of the USMCA is set for the end of November.
Finally, it’s time for your weekly Elon Musk update. Tesla and Musk’s settlement with the Securities and Exchange Commission (SEC) was approved on Tuesday by US District Judge Alison Nathan, despite a string of insulting tweets from Musk aimed at the SEC. After the announcement that the settlement was accepted, Tesla’s share price jumped 4.2%. Musk isn’t the only billionaire who’s been in hot water recently. Mark Zuckerberg is facing backlash from shareholders over the latest Facebook security breaches. On Wednesday, several public funds and the New York City Comptroller joined hedge fund Trillium Asset Management in a proposal to have Zuckerberg removed as Facebook’s chairman of the board. The proposal claims that Zuckerberg mishandled the recent Facebook scandals, and that an independent party should take on the role of chair to improve independence and accountability. A similar proposal was brought and voted down in 2017. This latest proposal is set to be voted on in May 2019 at Facebook’s annual shareholder meeting.
Those are your top headlines for the week. Thanks for catching up with us and don’t forget to check back next Friday for another round up of Friday Finds.