Happy Monday everyone.
Elon Musk said he’s filing a “thermonuclear” lawsuit today because advertisers abandoned Twitter*. Can his scorched earth litigation strategy restore the billions of dollars in value the company lost since Musk took over? Time will tell.
I’d love to hear what you think about the stories mentioned in this newsletter (today or any other day). There’s a poll at the bottom, but replying also works. Replies go directly to me.
— Dylan Gibbs
*Only a Musk lawsuit could make me use the name “X”.
TODAY’S DOCKET
SCC: Provincial securities laws apply to non-residents
Round up: Judge overstepped with pronoun intervention, BC can rubber-stamp Kitsilano housing, feds appealing plastics ruling
Down south: Colorado court says Trump engaged in insurrection
SCC
Quebec can prosecute out-of-province traders for alleged pump-and-dump
If a British Columbian manipulates the value of a US company, can Quebec’s securities regulator go after them? On Friday, the Supreme Court of Canada gave the Quebec regulator a green light. The Court said a province can regulate any matter with a sufficient connection to the province — even if the people who need to follow the rules aren’t connected to the province themselves.
Fred Sharp and the magnetic pumpers: Fred Sharp was the Canadian face of the law firm that brought you the “Panama Papers”. According to securities regulators, he’s a serial pump-and-dumper. Sharp was already punished for market manipulation in BC (his home province) and the US (where he traded shares). Now Quebec wants a turn.
The Quebec regulator says Sharp pumped the value of Solo International by making it look like a legitimate Quebec mining company. Solo was a Nevada corporation, but it was controlled by a Quebec shareholder, held mining claims in Quebec, and used a Montreal address.
Sharp argued Quebec has no business coming after him, because he’s a BC resident and Solo’s shares traded outside the province. Plus — hasn’t he faced enough securities regulation already?
On appeal: The Court said Quebec’s securities legislation applies to Sharp because of the ties between Solo and Quebec. The company’s inflated value came from Quebec mining assets, which made Quebec the face of the pump-and-dump scheme. Plus, a Quebec resident controlled the company. Sharp didn’t accidentally get caught up in the Quebec securities market — it was part of his scheme.
What does that tell us about applying other provincial statutes beyond provincial borders? The Court’s decision doesn’t provide much concrete guidance — so you’ll just have to know it when you see it:
In each case, a court or tribunal must examine the relationship among the enacting jurisdiction, the subject matter of the law, and the person sought to be regulated by it, to decide whether that relationship is sufficient to support the applicability of the legislation to the out-of-province person
Decision report card:
◻️◻️🙂◻️◻️ Factual interest
◻️◻️◻️😃◻️ Legal interest
😭◻️◻️◻️◻️ Clear legal rules
HEARSAY ROUNDUP
Canadiana
🧑⚖️ The Federal Court of Appeal criticized a lower court judge for his “inappropriate and unwarranted” intervention in Colin Ewen’s deportation proceedings. In written argument, the Crown used both “he/him” and “they/them” to refer to Ewen. The judge took exception to the mixed pronoun usage. After confirming Ewen uses he/him pronouns, the judge suggested the Crown may have violated Ewen’s Charter rights. He asked for written submissions on the issue and halted Ewen’s deportation. The Court of Appeal said the judge shouldn’t have raised the issue himself.
🏘 The BC Supreme Court held that a Kitsilano supportive housing project can move forward. Vancouver approved the development after a contentious hearing last year. Kitsilano residents challenged the city’s approval. In response, the province enacted legislation validating the city’s approval process and insulating the decision from review. The residents challenged the legislation, arguing the province improperly restricted their access to the courts. The Court disagreed, saying there’s nothing wrong with the legislation’s rubber-stamping effect.
🥤 The federal government is doubling down on the position that all plastics are toxic. Last week, the Federal Court said that position was unreasonable and unconstitutional, but the government announced today it plans to appeal that ruling.
Beyond the border
🇺🇸 A Colorado court held that Donald Trump engaged in insurrection when he encouraged people to storm the US Capitol after the 2020 election. But he’s still allowed to run in the 2024 election. The 14th Amendment prevents people who engage in insurrection from running for office, but the Court said that doesn’t include the office of the presidency. A spokesperson for Trump “applauded” the ruling (it’s unclear whether he read the part of the decision that concludes Trump actively promoted and incited violence).
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