The OSC’s case against CannTrust goes up in smoke

Good morning! In this week’s newsletter, Barbara Shecter reports on the CannTrust trial’s dramatic turn, Stephanie Hughes explains why BMO was forced to raise $3.15 billion and the Financial Times with more damning details about FTX. Hope you enjoy.

— Joe Hood, Managing Editor, Financial Post

OSC moves to withdraw charges against CannTrust trio

The case against former CannTrust officials over supposed “unlicensed” growing of cannabis during the early days of legalization was supposed give the OSC a chance to prove its credibility on enforcement. Now it’s looking like the regulator may have a major embarrassment on its hands. As Barbara Shecter reported yesterday, the OSC abruptly moved to withdraw all charges against former CannTrust CEO Peter Aceto and two former directors after determining there was no longer reasonable likelihood of a conviction. The decision was apparently triggered by testimony last week that suggested the rooms at the company’s Pelham, Ont., facility where cannabis was grown surreptitiously were in fact covered by a production licence, something even the company seems to have been confused about. The distinction between alleging “non-compliance” and unlicensed growing may sound like semantics, but not as far as the law is concerned. The parties are due back in court this morning.

GROWING CONCERNS

Buffer forces BMO to raise billions


Changes to the Office of the Superintendent of Financial Institutions’ domestic stability buffer can be tough to get excited about. After all, what’s the big difference between 2.5 per cent and three per cent — the level going into effect early next year? Fifty measly basis points may not seem like a lot in a year when interest rates have surged by 400 basis points, but for the big banks these moves can have massive implications. To wit, the Bank of Montreal, was forced this week to raise an additional $3.15 billion in an offering of common shares after it became apparent that it would not have enough capital set aside to meet the higher threshold, largely due its US$16.3 billion Bank of the West acquisition. The good news for BMO: the market barely blinked. 

COSTLY CUSHION 

In an increasingly complex world, the Financial Post should be the first place you look for answers. We want to hear your questions, so we can turn them into articles that inform all our readers. Ask your questions here.

Was this newsletter forwarded to you?

Sign up here to get it delivered to your inbox.

The U.S. legal system caught up with Sam Bankman-Fried this week as the FTX founder was taken into custody in the Bahamas and an indictment against him was unsealed in New York. While his lawyers are trying to prevent him from being extradited to the U.S., the torrent of damning details about how FTX was run has only picked up speed.  “This is one of the biggest financial frauds in American history,” said Damian Williams, U.S. attorney for the Southern District of New York. The Financial Times this week laid out elements of the case against SBF’s alleged crypto house of cards, where record keeping was apparently non-existent and corporate controls were nowhere to be found.

THE CASE AGAINST SBF

Canadian securities regulators tighten rules for unregistered crypto platforms in wake of FTX collapse 

Laurentian Bank shares surge 6% on strong earnings report 

Here’s where David Dodge thinks the economy and the central bank are heading next 

Why the mortgage stress test is likely here to stay, even as qualifying rates hit 8% 

Canadians have lost $500 billion in paper wealth, but there’s a silver lining 

The FP Finance Newsletter was compiled by FP Managing Editor Joe Hood. Reporters Barbara Shecter and Stephanie Hughes go where the action is. Designer Gigi Suhanic made it look great and web editors Pamela Heaven, Victoria Wells and Noella Ovid contributed at every step along the way.

Do you work in Finance? Do you have a tip? In between Zoom calls, let Barbara or Stephanie know what’s up.

For general inquiries reach us at [email protected].