The Ontario Securities Commission alleged last September that Purpose Investments and its founder Som Seif made false or misleading statements about ESG investing between 2019 and 2023.Melissa Tait/The Globe and Mail
For years, Purpose Investments Inc. did not incorporate environmental, social and governance factors into its investment decisions anywhere near the extent that the company and its founder had repeatedly asserted, the Ontario Securities Commission alleged in a hearing on Tuesday.
The company’s high-profile greenwashing case is before the Capital Markets Tribunal, an independent division of the OSC. It is expected to span several months, with multiple witnesses expected to testify, before concluding in September. Tuesday was the first day of hearings.
The OSC first alleged in September, 2025, that Purpose and its founder, Som Seif, made 19 false or misleading statements about ESG investing between 2019 and 2023.
At the time, Mr. Seif, one of Canada’s best-known money managers, immediately dismissed the allegations as politically motivated “nonsense” and subsequently made multiple public statements proclaiming his innocence.
In addition to the possibility of multimillion-dollar fines, Mr. Seif also faces a potential ban from the investment industry if the OSC ultimately prevails.
Despite the complexity of the circumstances, OSC lawyer Alvin Qian sought to portray the case as simple in his opening remarks.
“For the most part, I expect you will find this case is quite straightforward,” Mr. Qian told the three-member adjudication panel. “As much as the respondents may try to make this about ESG standards and technical issues; in our position, it is really just a classic case of false and misleading advertising.”
In his own opening statement representing Purpose, David Hausman of law firm Fasken Martineau DuMoulin LLP also said the case was straightforward.
“The allegation is whether these, which are defined as sales communications, were untrue or misleading, and that makes this case simple, because that is the end of the inquiry,” Mr. Hausman said. “There are 19 statements. The question is whether they’re true or whether they’re not. It’s not a case about how well Purpose integrated ESG in its investment processes, provided that there was a sustained and persistent effort to do so.
“In other words, this is a case of whether they did it, not how well they did it.”
The hearing was briefly delayed on Tuesday because of a power outage in downtown Toronto, but Joseph Groia of Groia & Company, who is representing Mr. Seif, is expected to make his own opening statement on Wednesday before the start of witness testimony.
In a post on LinkedIn last week, Mr. Seif said the case was about ESG standards and technical issues.
“The OSC’s case focuses on how we communicated our ESG methodology during a period when the OSC itself had no guidance and was still developing its own understanding of ESG integration,” he said. “A settlement was available. We chose not to take it, because accepting it would have meant agreeing to things that are not true.”
In late 2019, Purpose publicly committed to start incorporating ESG factors into its investment decisions. The OSC cited 19 occasions between September, 2019, and March, 2023, when Mr. Seif or Purpose publicly asserted to consider ESG factors when making investment decisions.
Yet, the company’s portfolio management team, headed at the time by former chief investment officer Greg Taylor, “was generally not considering ESG factors at the time Purpose announced ESG factors were core factors in its entire investment process,” Mr. Qian alleged.
Mr. Taylor, who left Purpose in May of 2025 for a similar position with PenderFund Capital Management Ltd., is expected to testify as part of the tribunal proceeding. Graeme Cooper, who was head of product strategy at Purpose until 2024, and current Purpose portfolio manager Jeremy Lin are also on the witness list.
Mr. Qian said Purpose claimed in 2019 that a majority of its funds, equalling roughly 75 per cent of its total assets under management, were already operating within its new ESG framework. But according to an analysis conducted by OSC senior forensic accountant Jesse Dufour, Purpose funds identified as having either incorporated ESG or that will incorporate ESG comprised less than 35 per cent of its assets under management at the time, Mr. Qian said.
“Certainly 35 per cent is a far cry from the 75-per-cent figure provided by Purpose in its announcement,” he said.
Mr. Qian added that “records will show a consistent pattern of Mr. Seif pushing Purpose and its employees to market Purpose and its funds as ESG” and that “Mr. Seif is the one who set the tone for the exaggerated nature of the statements that Purpose later made.”
Mr. Hausman said the OSC case was built on a review of written records, but that “this is not a tale that can be told completely through parading through documents. It is a story best told through the individuals who did the work that they did, and that is why we have a larger-than-usual number of witnesses.”
The majority of witnesses expected to testify in the proceedings are expected to do so on behalf of Purpose and Mr. Seif.
In his LinkedIn statement last week, Mr. Seif accused the OSC of having “overreached” in a case that did not warrant the use of the regulator’s limited enforcement resources.
“We scratch our heads at why this is an enforcement case, yet here we are,” Mr. Seif said. “Principles only matter when they are inconvenient to stand by. This is one of those moments.”