The Ontario Securities Commission alleges Emerge Canada, CEO Lisa Langley and chief financial officer Desmond Alvares improperly borrowed almost $6-million of investor money to cover operating expenses.Fred Lum/The Globe and Mail
An enforcement hearing against investment fund manager Emerge Canada Inc. was postponed Monday after company founder and chief executive officer Lisa Langley said she could not arrive in time owing to travel delays in the United States.
Ontario’s Capital Markets Tribunal – an independent division of the Ontario Securities Commission that handles adjudicative matters – granted Ms. Langley and Emerge Canada a one-day adjournment after she sent several e-mails notifying the tribunal about her connecting flight from Atlanta being cancelled.
The dates for the hearing were scheduled last year, and it was expected to start Monday morning at 10 a.m. The case involves four other respondents who were all present with their lawyers at the tribunal’s Toronto office on Monday morning.
Both Ms. Langley and Emerge Canada are listed in filings as self-represented for the hearing.
It is not the first time Ms. Langley has asked for extensions. Earlier this year, Ms. Langley and Emerge asked for the hearing to be adjourned, as well as extensions for certain deadlines leading up to the hearing. The tribunal dismissed the requests.
Emerge Canada case to test responsibilities of funds’ independent review committees
The OSC alleges Emerge Canada, Ms. Langley and chief financial officer Desmond Alvares improperly borrowed almost $6-million of investor money from funds they managed to cover the management company’s operating expenses. At the same time, the OSC has levelled allegations against three members of the independent review committee overseeing the Emerge funds – Marie Rounding, Monique Hutchins and Bruce Friesen – saying they had a responsibility to scrutinize the borrowing more carefully after it was first flagged as a possible conflict of interest.
Ms. Langley first alerted the OSC of her travel delays on Sunday evening around 5 p.m., the tribunal panel said Monday during a hearing to discuss her request for a delay.
Shortly after, the panel said Ms. Langley sent a second e-mail to say she would not arrive in Toronto until Monday morning at 11:10 a.m.
Early Monday morning, Ms. Langley sent a third e-mail to request the hearing be postponed owing to her delays.
Legal counsel for all three members of the IRC committee opposed the motion to delay the start of the hearing, saying the travel documents Ms. Langley provided as evidence of her delay appeared questionable.
“I find it particularly concerning that if you look at the specifics of that document, it appears to relate to someone else’s travel to Roanoke, Virginia,” Adam Chisholm, a lawyer with McMillan LLP and legal counsel for Ms. Hutchins and Ms. Rounding, said on Monday.
Mr. Alvares did not take a position on the request but noted that a delay would be unfortunate as he has “very limited resources” and his lawyer will not be able to attend the hearing every day.
While lawyers for the Ontario Securities Commissions said they had no position on the motion, Krystina McMillan, a senior litigator for enforcement branch at the OSC, said the commission did have concerns about the delay and the evidence Ms. Langley provided.
“The commission is quite concerned about losing limited hearing dates, especially for something as foreseeable as travel delays,” Ms. McMillian said at the hearing on Monday. “Unfortunately, there is a bit of a history in this case of missed deadlines, and repeated adjournment requests.”
The OSC – along with counsel for Mr. Alvares and the IRC – shared concerns over the “veracity” of the travel documents, particularly that the ticket Ms. Langley provided appeared to not be in her name and had different flight routes than she had originally communicated.
“The image that was e-mailed appears to be a sort of custom airline ticket,” Ms. McMillan told the tribunal. “I don’t really know what to call it, I’ve never seen anything like this before.”
The hearing will commence March 24 at 10 a.m.