approach to corporate governance that is inappropriate for a public issuer and
that undermines investor protection and the integrity of the capital markets.
 Mr. Grossman conceded that he knew the purpose of the transfers. If
Mr. Mazzacato and Mr. Kadonoff did not know, they were reckless about that.
 As for any legal advice that was obtained, we conclude that it is more likely than
not that the respondents were not focused at that time on whether the offering
memorandum permitted the loans. Their concerns about the propriety of the
loans arose from other considerations, including tax law, trust law, and personal
liability. Had the respondents asked the right question of their lawyers, as they
ought to have done, they would likely have received a direct answer. They could
then have acted with the benefit of that advice.
 Instead, the respondents did not afford Aird & Berlis an opportunity to answer
the direct question that was not asked. The diversion of funds they caused was
an unauthorized one, and they knew or ought to have known that the funds were
being diverted for those purposes.
 We therefore find that since Staff has established the necessary elements as
against all three individual respondents, each of them contravened
s. 126.1(1)(b) of the Act. We must now calculate the amount of the fraud for
which each individual respondent is responsible.
 Because Mr. Grossman and Mr. Mazzacato were directing minds of SIF Inc.
throughout the ten-month period of July 1, 2015, to May 5, 2016 that Staff used
for its calculations, they are responsible for the full amount of $234,864.04,
being the total of $223,224.04 for distributions and $11,640.00 for dealer fees.
We repeat our note above that we accept Staff’s conservative analysis of the use
of funds available in the SIF #2 fund account, and specifically Staff’s application
of a $37,935.34 reduction to reflect the use of an opening balance in that
account. That reduction is reflected in the total of $234,864.04.
 Mr. Kadonoff’s responsibility spans only a portion of the ten-month period that is
the subject of Staff’s analysis. For Mr. Kadonoff, the relevant sub-period runs
from July 1, 2015 (the beginning of Staff’s ten-month period) to September 14,
2015 (the date on which he authorized payment of SIF #2 distributions using
funds loaned from SIF #1). In that shorter period, three months’ worth of
distributions were paid -- $25,680.67 in the first half of July, and the same
amount in each of the first half of August and the first half of September.
 As we mentioned above in paragraph , Staff’s adjustment was applied on a
chronological basis as impugned payments were made, and was fully consumed
by those payments by July 22, 2015. We give Mr. Kadonoff the benefit of that
conservative approach and exclude the June 2015 distributions paid in the first
half of July. That leaves a total of $51,721.34 that Mr. Kadonoff shares
responsibility for, being the two $25,860.67 payments in August and September.
In the relevant period, no dealer fees were paid until September 22, 2015, by
which time Mr. Kadonoff had resigned and was no longer signing cheques.
Are any of the individual respondents to be held liable under
s. 129.2 of the Act?
 Section 129.2 of the Act attaches liability to an individual for non-compliance by
a corporation, in certain circumstances. For s. 129.2 to apply, the individual