Decision in brief: Go-To Developments Holdings Inc., Enforcement Proceeding, Merits, May 6, 2025

In this enforcement case, the OSC says that Oscar Furtado and companies he controls, Furtado Holdings, Go-To Developments Holdings, and Go-To Spadina Adelaide Square, defrauded investors, were in the business of trading securities without being registered with the OSC and made improper statements to investors relating to that trading. The OSC also says that Furtado misled OSC staff when they questioned him about their investigation.

Furtado ran a real estate development business. Furtado Holdings is his personal and family holding company. Through it, he owns Go-to Developments Holdings, which is a real estate development company. Go-To Developments Holdings set up and managed limited partnerships for each of its real estate projects. Go-To Spadina Adelaide Square was set up to manage the Adelaide Limited Partnership.

The Tribunal decided that Furtado and his companies committed five frauds connected to the Adelaide Limited Partnership.

In the first fraud, they did not tell investors that Furtado would personally benefit from the partnership’s purchase of properties.

In the second fraud, they paid one investor before other investors were paid, which the partnership agreement did not allow.

In the third fraud, they used the assets of two other limited partnerships to secure a loan on a property owned by the Adelaide Limited Partnership. The agreements for the other two limited partnerships did not allow this use of their assets.

In the fourth fraud, they lied to an investor about the Adelaide Limited Partnership’s finances in order to get him to invest another $12 million and did not tell him that Furtado would personally benefit.

In the fifth fraud, they turned an investor’s equity investment in the Adelaide Limited Partnership into a debt, which was a fraud on the limited partnership and its investors.

When deciding about those five frauds, the Tribunal disagreed with Furtado and his companies that the OSC had to prove that investors actually relied on what Furtado did or didn’t tell them.

The Tribunal then dealt with the OSC’s allegation that Furtado and his companies were in the “business” of trading in securities. If they were, they would have to be registered with the OSC. The Tribunal decided that Furtado and his companies were not in the business of trading securities. Instead, they were primarily real estate developers who sold securities to fund their development projects.

The OSC’s allegation that Furtado and his companies made prohibited statements depended on them having to be registered with the OSC. Because the Tribunal found that Furtado and his companies were not in the business of trading securities, that meant that they didn’t have to be registered, so the Tribunal dismissed this allegation.

Finally, the Tribunal decided that Furtado misled OSC staff in his interviews by saying that the payments he received from the partnership’s purchase of the Adelaide Properties were unexpected.

As a result of this decision, the Tribunal will hold a hearing to decide what sanctions and costs it should order against Furtado and his companies because of their conduct.