Decision in brief: Ontario Securities Commission v Emerge Canada Inc, Enforcement Proceeding, Merits, November 9, 2026

In this enforcement case, the OSC says that Emerge Canada Inc., an investment fund manager, broke Ontario securities law when it withdrew more than $10 million from the investment funds that it managed and used part of that money to pay its own expenses and those of its US affiliate, Emerge Capital Management Inc. (Emerge US). The OSC says that two of Emerge Canada’s officers, Lisa Langley and Desmond Alvares, are responsible for Emerge Canada’s conduct and related compliance failures. Langley was Emerge Canada’s Chief Executive Officer, Chief Compliance Officer and Ultimate Designated Person: the person primarily responsible for the effectiveness of Emerge Canada’s compliance system. Alvares was Emerge Canada’s Chief Financial Officer.

The OSC also says that three members of Emerge Canada’s Independent Review Committee (IRC) – Marie Rounding, Monique Hutchins and Bruce Friesen – failed in their duties. Under Ontario securities law, an IRC is required to review potential conflicts of interest between the fund manager and the investment funds it manages.

The Tribunal found that Emerge Canada broke Ontario securities law. It had a duty to act in the best interests of the funds. Instead, it put its own interests ahead of the investment funds by taking more than $10 million from them and using much of it to pay its expenses and those of Emerge US. This amounted to a prohibited loan from the investment funds to Emerge Canada and created conflicts of interest that Emerge Canada failed to properly address or refer to its IRC. The Tribunal also found that Emerge Canada had inadequate compliance policies and procedures, did not properly follow its own procedures, and failed to keep adequate records showing where the investment funds’ money went. Its records contained unexplained adjustments, inconsistencies, and improperly recorded transactions. Some payments to Langley were not properly documented.

The Tribunal found that Langley failed in her duties as Ultimate Designated Person and Chief Compliance Officer because she did not adequately understand or oversee Emerge Canada’s compliance obligations.

The Tribunal found that Langley and Alvares were responsible for Emerge Canada’s conduct because they were aware of or caused Emerge Canada to borrow money from the investment funds.

The Tribunal found that the members of Emerge Canada’s IRC did not fail in their duties. Emerge Canada denied that there was a conflict and did not refer the matter to the IRC along with a proposal to address the conflict. Without this, the IRC was unable to provide a recommendation on a proposal to address the conflict. The IRC also does not have investigative powers. The IRC nevertheless raised concerns and made inquiries, but Emerge Canada gave it false information about whether the withdrawals from the investment funds had stopped and whether the money would be repaid.

The Tribunal will hold a further hearing to determine sanctions and costs against Emerge Canada, Langley and Alvares.