Gravitas Securities Inc.
IN THE MATTER OF THE SECURITIES ACT R.S.O. 1990, C. S.5, AS AMENDED --AND-- IN THE MATTER OF THE REGISTRATION OF GRAVITAS SECURITIES INC.
DECISION OF THE DIRECTOR
- Gravitas Securities Inc. (Gravitas) was registered under the Ontario Securities Act (the Act) as an investment dealer effective May 26, 2008 and as an investment fund manager effective April 20, 2012.
- Gravitas has been subject to terms and conditions on its investment fund manager registration since September 12, 2019, revised on October 30, 2020, limiting its investment fund manager activity to the remediation and orderly termination, sale, or transfer of its existing investment funds under the oversight of an independent compliance consultant.
- On June 8, 2023, a Hearing Panel of the Canadian Investment Regulatory Organization (CIRO) suspended the membership of Gravitas. CIRO staff sought the suspension of Gravitas' CIRO membership as a result of Gravitas becoming capital deficient and advising CIRO of its intention to wind up its business as an investment dealer.
- Pursuant to subsection 29(1)(2) of the Act, the registration of Gravitas in the category of investment dealer was automatically suspended upon the suspension of Gravitas' membership with CIRO. However, subsection 29(1)(2) does not automatically suspend Gravitas' registration as an investment fund manager.
- On June 8, 2023, on behalf of the Compliance and Registrant Regulation Branch of the Ontario Securities Commission (CRR Branch), Elizabeth King, Deputy Director, Registrant Conduct, notified the registered ultimate designated person of Gravitas in writing that staff of the CRR Branch had recommended to the Director that the registration of Gravitas be suspended.
- CRR Branch did not receive notice from anyone acting on behalf of Gravitas objecting to CRR Branch's recommendation or requesting an opportunity to be heard.
- Pursuant to section 28 of the Act, in considering whether to continue the registration, the Director is required to consider whether, among other things, a registration is otherwise objectionable.
- I am of the view that it would be inconsistent with the OSC's mandate to provide investor protection, and to foster fair and efficient capital markets and confidence in the capital markets, to permit Gravitas to continue to be registered as an investment fund manager when Gravitas' registration as an investment dealer has been suspended. Moreover, Gravitas' compliance consultant has confirmed that all of Gravitas' investment funds have been terminated or sold, except for one which is being terminated, and for which all of the fund assets have already been returned to investors. Accordingly, it would be objectionable for Gravitas to continue to be registered as an investment fund manager in these circumstances.
- My decision is that the registration of Gravitas be suspended effective June 16, 2023.
June 16, 2023
Manager, Registration, Compliance and Registrant Regulation Branch