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Citation: First Global Data Ltd (Re), 2022 ONCMT 25  
Date: 2022-09-15  
File No. 2019-22  
(Subsection 127(1) of the Securities Act, RSO 1990, c S.5)  
Adjudicators: Timothy Moseley (chair of the panel)  
Lawrence P. Haber  
Mary Anne De Monte-Whelan  
By videoconference and teleconference, October 5, 7, 9, 13-16, 19,  
21-23, 26, 27, November 20, 25-27, December 4, 7, 9-11, 14-17,  
2020; January 7, 8, 11-15, 18, April 6, 2021; written submissions  
received March 29 to August 10, 2021  
Appearances: Mark Bailey  
Charlie Pettypiece  
For Staff of the Ontario Securities  
Anil Saxena  
For Global Bioenergy Resources Inc.  
Syed Abid Hussain  
For Nayeem Alli, for a portion of the  
Simon Bieber  
Robert Stellick  
For Maurice Aziz  
Harish Bajaj  
For himself  
Kevin Richard  
For Andre Itwaru, for a portion of the  
No one appearing for First Global Data Ltd.  
OVERVIEW .............................................................................................. 1  
BACKGROUND.......................................................................................... 3  
Introduction ................................................................................... 3  
The initial connection....................................................................... 4  
The Colombian assets and the need for funding................................... 5  
Aziz introduces Bajaj and Thiviyanayagam to the project ...................... 6  
GBR entities................................................................................... 7  
Desire to raise funds using public companies......................................10  
Agreement between First Global and GBR Colombia ............................11  
Solicitation of investors...................................................................11  
The breakdown of the First Global relationship ...................................12  
2.10 Loans from EH...............................................................................13  
2.11 Purported licence transactions..........................................................13  
PRELIMINARY MATTERS ...........................................................................14  
Alli’s requests to adjourn the merits hearing ......................................14  
October 1, 2020, request.......................................................14  
October 7, 2020, request.......................................................15  
Mid-hearing ruling on the admissibility of testimony about a meeting with  
Roch (GBR Colombia’s lawyer).........................................................16  
Mid-hearing ruling on the rights of respondents to cross-examine each  
Background .........................................................................18  
Analysis ..............................................................................20  
STRUCTURE OF THE ANALYSIS..................................................................22  
FIRST GLOBAL DEBENTURES.....................................................................22  
Introduction ..................................................................................22  
Alleged illegal distribution................................................................23  
Factual background...............................................................23  
Analysis of First Global’s alleged illegal distribution....................24  
Conclusion about the allegation that First Global illegally distributed  
its debentures......................................................................26  
Role of the other respondents in First Global’s illegal distributions27  
Engaging in the business of trading the First Global debentures without  
being registered.............................................................................33  
Trading with repetition, regularity and continuity.......................34  
Directly or indirectly soliciting securities transactions .................34  
Receiving, or expecting to receive, compensation for trading ......35  
Engaging in activities similar to those of a registrant..................35  
Conclusion about Staff’s allegation that GBR, Bajaj and Aziz were  
engaged in the business of trading..........................................36  
Alleged misrepresentations..............................................................37  
Use of Funds Representations.................................................38  
Colombian Operations Representations ....................................53  
Security Representations .......................................................59  
Staff’s allegations of fraud contrary to s. 126.1(1)(b)..........................75  
Did the GBR Ontario Parties engage in an act of deceit, falsehood  
or some other fraudulent means?............................................76  
Was there a deprivation caused by the dishonest act, i.e., the  
unauthorized diversion of funds?.............................................81  
Did each respondent have subjective knowledge of the fraudulent  
act? 83  
Did each of the GBR Ontario Parties have subjective knowledge  
that the fraudulent act could have as a consequence the  
deprivation of another?..........................................................91  
Conclusion regarding fraud in relation to the First Global  
debentures ..........................................................................92  
Staff’s allegations of representations prohibited by s. 44(2) .................93  
GBR DEBENTURE.....................................................................................96  
Introduction ..................................................................................96  
Additional background facts.............................................................97  
The reliability of EH’s testimony .....................................................101  
Staff’s allegations of fraud contrary to s. 126.1(1)(b)........................102  
Did Aziz and GBR Ontario engage in an act of deceit, falsehood or  
some other fraudulent means? .............................................102  
Was there a deprivation caused by the dishonest act?..............103  
Did each respondent have subjective knowledge of the dishonest  
act? 104  
Did each respondent have subjective knowledge that the fraudulent  
act could have as a consequence the deprivation of another?....104  
Conclusion regarding fraud in relation to the GBR debenture.....104  
FIRST GLOBAL PURPORTED LICENCE TRANSACTIONS ................................104  
Introduction ................................................................................104  
Additional background facts .................................................106  
Expert opinion evidence.......................................................108  
Financial reporting and involvement of First Global’s auditor .....113  
First Global........................................................................118  
Role of Itwaru and Alli.........................................................124  
Conclusion about purported licence transactions...............................125  
In more than 100 separate transactions during an eight-month period in 2015,  
80 investors invested an aggregate of approximately $4.46 million in debentures  
of First Global Data Ltd. (First Global), an Ontario public company. The  
investors lost all their money.  
The fundraising activities were carried on by Global Bioenergy Resources Inc.  
(GBR Ontario), a private Ontario company, and its two principals. None of them  
was a registrant under Ontario securities law.  
Staff of the Ontario Securities Commission alleges that the First Global  
debentures were illegally distributed (i.e., sold without a prospectus or an  
exemption from the prospectus requirement), and that GBR Ontario and its two  
principals engaged in the business of trading those debentures without being  
registered. We agree. Their sales efforts were repeated and continuous, they  
were compensated or expected to be compensated for those efforts, and some of  
their activities resembled those of a securities dealer.  
Staff also alleges that GBR Ontario and its two principals perpetrated securities  
fraud because of misrepresentations they made. The three sets of allegedly  
fraudulent misrepresentations were about:  
how the funds raised by selling First Global debentures would be put to  
use, i.e., to fund First Global’s working capital, and/or to help First Global  
deploy its mobile technology and global payment systems outside Canada,  
and/or to fund certain Colombian natural resource operations unrelated to  
First Global’s core business;  
whether natural resource assets and production facilities existed in  
Colombia that were operating and that were producing sufficient revenue  
to generate the promised returns on the First Global debentures; and  
whether investment in the First Global debentures was secure, guaranteed  
and risk-free.  
The individual respondents and other principals cannot themselves agree as to  
how investors’ funds were to be used, or whether the representations were  
complied with. Worse, the documents provided to investors were fundamentally  
contradictory on those subjects.  
We agree with Staff’s submission that GBR Ontario and its principals perpetrated  
securities fraud as alleged. We conclude that those respondents put investor  
funds raised from the First Global debentures to uses that had not been disclosed  
to investors, including to:  
go toward a different Colombian project involving a coal mine;  
pay referral fees and other expenses of GBR Ontario; and  
pay interest to debenture holders.  
We also conclude that at a minimum, those respondents:  
were reckless as to whether there were sufficient operating assets to  
produce the necessary income (we conclude that there were not);  
were reckless as to whether any assets had been pledged as promised to  
secure the First Global debentures (we conclude that they had not been);  
were cavalier in promising that investment in those debentures was 100%  
secure, guaranteed and risk-free (which it was not).  
Staff makes similar allegations against GBR Ontario and one of its principals  
about a debenture issued by GBR Ontario (not First Global) directly to one  
investor, reflecting a total investment of $450,000 made over a period of less  
than two months. As with the First Global debentures, the same  
misrepresentations were made about whether the investment was secured by  
assets. We conclude, for reasons similar to those about the First Global  
debentures, that GBR Ontario and the principal against whom the allegation is  
made perpetrated securities fraud in respect of this debenture.  
Finally, Staff alleges that First Global entered into agreements that purported to  
be licence agreements but that were in reality investment or financing  
agreements. In one set of audited year-end financial statements, and three  
subsequent quarterly unaudited interim financial reports, First Global improperly  
recognized revenue in connection with these agreements. First Global eventually  
restated its financial results to reflect a significant negative impact, but Staff  
alleges that before that restatement, First Global breached its obligation to  
prepare and file financial statements prepared in accordance with applicable  
standards. Staff also alleges that First Global’s two principals authorized the  
release of the improper financial results and that they therefore failed to comply  
with Ontario securities law.  
[10] We agree that First Global improperly recognized revenue in respect of the  
purported licence agreements. We conclude, though, that First Global and its  
principals exercised reasonable due diligence before they did so with respect to  
the year-end financial statements and two of the three quarterly interim financial  
reports. We reach that conclusion primarily because First Global’s auditor gave a  
clean audit opinion with respect to the year-end financial statements despite  
being aware of the revenue recognition issue.  
[11] However, we find that the due diligence defence was not available in respect of  
the third interim financial report. By that time, the issue had been repeatedly  
discussed, and First Global’s auditor had reversed his position and advised First  
Global not to recognize the revenue. We find that Staff has proven its allegations  
regarding that interim financial report.  
[12] We explain our reasoning for all the above conclusions in our analysis below,  
following a review of the background facts.  
[13] This proceeding arises because a number of individuals saw opportunities in  
coming together with other individuals involved in different sectors, whose  
ambitions were different but were seen as complementary. Things did not turn  
out as hoped, at least for some of the individuals and their associated  
[14] There are two geographic centres to the events underlying Staff’s allegations.  
[15] The first is Colombia, in which may have been situated certain natural resource  
assets, including one or more bitumen mines, biodiesel facilities, and coal mines.  
We say “may have” because the existence, status and ownership of these assets  
were unclear throughout the relevant time and are in dispute in this proceeding.  
[16] The second geographic centre is Ontario, which was home to businesses (First  
Global and GBR Ontario) and individuals who sought to raise funds from the  
public, supposedly for one or both of two purposes:  
to develop mobile payment technology and introduce that technology  
outside Canada; and/or  
to develop some or all of the Colombian assets referred to above.  
[17] It is the public fundraising in Ontario that forms the core of this proceeding. Staff  
alleges that from approximately May to December of 2015 (the Solicitation  
Period), the respondents raised funds in a manner that breached numerous  
provisions of the Securities Act.1  
The initial connection  
[18] The connections in this case began in early 2014, when through a mutual friend,  
the respondent Maurice Aziz met Michel Faille (who is not a respondent). Aziz  
had worked in financial services but described his passion as business  
development, bringing some of his many contacts together to help them solve  
problems. Aziz understood that Faille was a tax specialist.  
[19] According to Aziz, who was based in Ontario, Faille told him about a project that  
he was working on in Colombia. Faille explained that a friend of his owned all the  
necessary facilities, rights and permits with respect to some natural resource  
assets, but that more funding was needed to develop the assets and to increase  
production at the facilities.  
[20] Aziz expressed interest in the project. Faille then introduced Aziz by telephone to  
Faille’s friend Adriana Rios Garcia, and Garcia’s husband Martin Grenier. Aziz  
began to speak with Garcia and Grenier regularly. Like Faille, neither Garcia nor  
Grenier is a respondent in this proceeding.  
RSO 1990, c S.5  
[21] Garcia is from Colombia and is a dual citizen of Colombia and the United States  
of America, with residences in both countries. Garcia and Grenier told Aziz that  
Garcia controlled various assets in Colombia, although legal title to some of them  
was held by Garcia’s family members’ companies. According to Garcia, who  
testified at the hearing, she oversaw the operations of the Colombian  
businesses, and her husband Grenier was in charge of fundraising.  
[22] Despite Grenier’s active and prominent role in the events giving rise to this  
proceeding, his name does not appear on any contracts or other formal  
documents. In late June 2015, Grenier explained to Aziz and other involved  
individuals that this was so because of issues in his past. It is evident that he  
was referring to some or all of what had been publicly reported about him,  
including that:  
he had been charged with offences (some of which he had very recently  
pled guilty to) relating to money laundering and the proceeds of drug  
he had used aliases; and  
he had used a Canadian lawyer to fabricate a document in an attempt to  
legitimize the origins of illicit funds.  
The Colombian assets and the need for funding  
[23] Aziz says that Garcia and Grenier told him that Garcia held rights to six  
Colombian assets. These assets, and the distinctions among them, become  
significant in our analysis below, since Staff’s allegations raise issues relating to  
whether all the assets were indeed operating, who owned what portion of the  
assets, and what representations were made to investors about the assets for  
which their funds would supposedly be used.  
[24] Four of the six assets were bitumen mines: the Rio Negro mine, the SGS  
Baranquilla mine, the Asfaltitas mine, and the La Esperanza mine. The other  
two assets were the Hoyo Patia coal mine and either one or two biodiesel  
production facilities (an uncertainty we address below).  
[25] Aziz says that Garcia and Grenier explained that their bitumen production was  
being done by hand in open pit mines using “artisanal” methods, including  
pickaxes and shovels. According to Garcia and Grenier, they needed funding to  
upgrade their bitumen production methods. Similarly, they needed funding for  
the biodiesel facility(ies), so that they could buy equipment and make capital  
investments in order to significantly increase production.  
[26] Garcia and Grenier said they had been unable to raise the necessary funds  
through conventional means, because many lenders feared investing in  
Aziz introduces Bajaj and Thiviyanayagam to the project  
[27] Aziz liked the opportunity that the Colombian projects appeared to present, but  
he felt that he lacked the appropriate skillset to raise the necessary funds. He  
decided to introduce the projects to two individuals he knew in Ontario the  
respondent Harish Bajaj, whom Aziz had known for about 15 years, and an  
associate of Bajaj’s, Shankar Thiviyanayagam, who is not a respondent. Aziz  
testified that Bajaj and Thiviyanayagam often partnered together to raise funds.  
[28] In late 2014, Aziz introduced Bajaj and Thiviyanayagam to Faille, who in turn  
introduced them to Garcia and Grenier. Following that introduction, Aziz, Bajaj  
and Thiviyanayagam reviewed documents from Garcia and Grenier. They also  
traveled to Colombia to meet with Garcia and Grenier and to visit some of the  
assets. During a January 2015 trip, Bajaj and Thiviyanayagam visited:  
what they were told was the La Esperanza mine, where they saw a few  
people digging by hand and filling bags; and  
a biodiesel plant that they were told was producing biodiesel, although the  
extent of Bajaj’s understanding about this plant was that one of Garcia’s  
companies owned it; when he testified at the hearing he could not recall  
the name of the company.  
[29] In our analysis below, we examine more closely the due diligence conducted by  
Aziz and Bajaj, which becomes important in considering the representations they  
made to investors.  
[30] There was significant uncertainty about the subject assets from the start. For  
example, Aziz and Bajaj differed about which assets were to be the subject of  
the fundraising efforts. Bajaj testified that initially it was the bitumen assets  
only. Aziz says the biodiesel facility was included from the beginning.  
[31] In any event, Aziz testified that having made the initial connection, he left it to  
Bajaj, Thiviyanayagam, Garcia and Grenier to move things forward. He says that  
over the first few months he was not actively and directly involved in the  
GBR entities  
[32] Two corporations using “Global Bioenergy Resource” or its derivation “GBR” as  
part of their names figure prominently in this case. We mentioned the  
respondent GBR Ontario above. We will return to GBR Ontario after describing  
the other GBR company.  
[33] That other company, which was incorporated six months earlier than GBR  
Ontario, is “Global Bioenergy Resource SAS”, a Colombian corporation with  
offices in Bogotá. The parties in this proceeding referred to the company as  
“GBRSAS”. We will refer to it as GBR Colombia.  
[34] Garcia testified that on February 26, 2015, she incorporated GBR Colombia, of  
which she owned 100% and was the sole legal representative and only person  
with authority to sign on behalf of the company.  
[35] Just over three months later, in early June 2015, Bajaj and Thiviyanayagam  
signed a memorandum of understanding (which they dated May 14, 2015) with  
GBR Colombia (the GBR Colombia MoU, or the MoU). The GBR Colombia MoU,  
which was signed by Garcia on behalf of GBR Colombia, reflected that:  
Bajaj and Thiviyanayagam committed to raise funds through an  
unspecified Canadian company and to invest in GBR Colombia an amount  
up to C$5 million;  
GBR Colombia would manage the Colombian bitumen mining operation  
and would increase production to 30,000 tons per month;  
Garcia would own 50% of the shares of GBR Colombia; and  
Bajaj and Thiviyanayagam together would own the other 50% of the  
[36] Bajaj and Garcia agree that at the time they signed the MoU, the La Esperanza  
and Rio Negro bitumen mines were the only assets that were identified as  
becoming part of the fundraising arrangement. While Bajaj did not know at the  
time what assets GBR Colombia owned, he says he was promised by Garcia and  
Grenier that the La Esperanza mine would be transferred to GBR Colombia  
without any conditions. He expected the transfer to be effected when the MoU  
was signed. The biodiesel facility was added later.  
[37] There is some dispute about the extent of Aziz’s participation at this stage. Bajaj  
claims to have been working with Aziz from the beginning. Bajaj states that even  
before the MoU was signed, there was an oral understanding between him and  
Aziz that the two of them would be entitled to equal shares of the business. On  
the other hand, Aziz denies having had any direct involvement in the fundraising  
efforts at the time. He notes that he was not a party to the MoU and that he had  
no entitlements under it.  
[38] Bajaj drafted the MoU without the benefit of any legal advice. It is brief and it is  
precise as to share ownership (Garcia as to 50%, with Bajaj and Thiviyanayagam  
together owning the other 50%, with no suggestion that Aziz would own any  
shares). The only evidence to suggest that Aziz was entitled to an ownership  
interest is Bajaj’s testimony, which is contradicted by the MoU and by testimony  
from Aziz and Garcia.  
[39] Bajaj gave no explanation as to why the supposed oral understanding was not  
reduced to writing in the MoU or elsewhere. Aziz’s testimony aligns with the  
documentary evidence, and we conclude that it is more likely than not that Aziz  
had no ownership interest in GBR Colombia at that time.  
[40] Ownership of GBR Colombia aside, much of the evidence in this hearing revolved  
around whether Garcia promised to transfer any of the Colombian assets to that  
company, and whether any such transfers ever happened. We will return to that  
issue in our analysis below.  
[41] For our purposes in this proceeding, the next significant corporate event for GBR  
Colombia occurred in October 2015, four months after the MoU was signed. At a  
meeting in Montreal, at the offices of GBR Colombia’s lawyer, four directors of  
GBR Colombia (Garcia, Aziz, Thiviyanayagam and Bajaj) signed a resolution  
appointing Bajaj as president, an individual by the name of Paul James as chief  
executive officer, and Garcia as secretary. Garcia testified that there was an oral  
agreement that this and other resolutions signed at that time were to remain  
undated and were to be held in escrow until GBR Ontario raised at least $5  
million. We reject Garcia’s claim, for reasons we discuss further below.  
[42] GBR Ontario was founded by Aziz, Baja and Thiviyanayagam, and incorporated  
on August 11, 2015. From its inception, Aziz was a director and Bajaj was its  
president. Aziz became the secretary beginning in 2017. GBR Ontario’s sole  
reason for existing was to carry out the fundraising. GBR Ontario carried on no  
other business.  
[43] In these reasons we sometimes refer to the respondents GBR Ontario, Bajaj and  
Aziz together as the GBR Ontario Parties.  
[44] Bajaj testified that he and the other two co-founders of GBR Ontario (Aziz and  
Thiviyanayagam) were responsible for raising funds for GBR Colombia to develop  
the Colombian assets. Bajaj stated that the three of them, along with Faille,  
managed the day-to-day operations of GBR Ontario.  
[45] Staff submits that Aziz was a directing mind of GBR Ontario. Aziz disagreed,  
testifying that he was not part of management and played only a peripheral role,  
and that it was Faille (as Grenier’s voice) and Bajaj who managed the company.  
We address that issue in our analysis below.  
[46] According to Bajaj, Faille and Aziz told him:  
to continue to use, for GBR Ontario, an office in Richmond Hill that Bajaj  
had previously been using for an unrelated entity; and  
that whether Bajaj used the Richmond Hill office or Bajaj’s Brampton  
office (which Bajaj used for his financial and accounting services, and  
which Bajaj preferred over the Richmond Hill office), he would be  
reimbursed for rent and employee salaries.  
[47] Staff submits that Bajaj was also a directing mind of GBR Ontario. Bajaj submits  
that his role with GBR Ontario was to raise funds and to show the investment  
opportunity to investors. That role is not inconsistent with Staff’s allegation, and  
as we set out in more detail below, we conclude that Bajaj was indeed a  
directing mind of GBR Ontario.  
[48] Even though some documents referred to GBR Ontario as the “Canadian office”  
and GBR Colombia as the “Colombian office”, there was no corporate relationship  
between the two companies. Where possible in these reasons, we will distinguish  
between the two companies. However, presentations and marketing documents  
often conflated the two entities, referring to them together as “GBR”, or referring  
to one or the other as “GBR”, without being clear about which entity was  
involved. Accordingly, where appropriate, we will occasionally refer simply to  
GBR”, to reflect the message that was being given to investors at that time that  
the two entities were one.  
Desire to raise funds using public companies  
[49] By June 2015, when the GBR Colombia MoU was signed, Bajaj had already been  
speaking with investors about the Colombian assets, and had already been  
promoting the investment through marketing material and radio advertisements.  
[50] Bajaj and Thiviyanayagam considered it important that the fundraising be done  
through a public company, so that investors could hold their investments in  
registered accounts (e.g., RRSP, TFSA). Unsuccessful attempts ensued with two  
companies, before Aziz suggested a company he knew of that, he had recently  
learned, was experiencing financial difficulties.  
[51] The company was the respondent First Global, a Canadian company with its head  
office in Toronto. First Global became a public company by way of a reverse  
takeover in 2012. It was listed on the TSX Venture Exchange and was a  
reporting issuer in Ontario and other provinces. First Global described itself as an  
international financial technology company, involved in mobile payments and  
cross-border payments.  
[52] Aziz had a long-standing relationship with First Global, having been friends with  
its two principals, the respondents Andre Itwaru (a co-founder of First Global and  
its then-CEO) and Nayeem Alli (also a co-founder of First Global and its  
then-CFO) for approximately ten years. In these reasons we sometimes refer to  
First Global, Itwaru and Alli together as the First Global Parties.  
[53] Aziz believed that there was an opportunity to align his and Bajaj’s interests with  
those of First Global, Garcia and Grenier. In July 2015, Aziz introduced First  
Global’s principals Itwaru and Alli to Faille, Bajaj and Thiviyanayagam to discuss  
how they might all work together to raise funds to meet their various objectives.  
Agreement between First Global and GBR Colombia  
[54] First Global Corp. (First Global’s subsidiary) entered into an agreement with GBR  
Colombia, pursuant to which GBR Colombia agreed to help First Global raise  
funds by distributing First Global debentures. The agreement, which we refer to  
as the First Global-GBR Debenture Agreement, is dated August 21, 2015,  
although it appears to have been executed sometime after that date, likely in  
October or later. In any event, by August 21, the date shown on the agreement,  
First Global had already raised approximately $1.6 million from investors using  
First Global’s subscription documents.  
[55] According to Aziz, First Global was to be only a temporary solution for GBR  
Colombia, as a vehicle to raise funds. He testified that once a shell listed  
company could be identified, GBR Colombia would roll all its assets into that  
company and continue raising capital using that company. GBR Colombia would  
no longer need First Global.  
Solicitation of investors  
[56] In our analysis below, we describe in detail the methods by which investors were  
solicited and investments were documented. Briefly:  
Bajaj led the fundraising efforts on behalf of GBR Ontario, using his  
existing client network, PowerPoint presentations at open in-person  
seminars, brochures made available to potential investors, radio  
advertisements, and referral networks;  
Aziz played a role in the fundraising, although a less central role than  
Bajaj and Aziz made representations to investors about:  
how funds would be used;  
the extent to which the assets in Colombia were operating and  
capable of producing the advertised return; and  
whether investment in the First Global debentures was secure,  
guaranteed and risk-free; and  
investors signed First Global subscription documents that indicated that  
funds were to be used for First Global’s working capital, but did not  
mention use of funds for any other purposes, including the Colombian  
The breakdown of the First Global relationship  
[57] During the time that funds were being raised, primarily for the Colombia  
operations, a dispute arose about the extent to which First Global was entitled to  
retain some portion of those funds. Once it was clear that First Global had  
retained approximately $1.5 million (more than some thought it was entitled to),  
trust between Garcia, Grenier and Faille on the one hand and First Global on the  
other was eroded. The parties agreed that the best way forward was for GBR  
Colombia to work with a new Canadian company and for First Global to assign  
the debentures to that company.  
[58] Grenier and the GBR Ontario Parties urgently wanted to find a public company to  
replace First Global. Grenier reintroduced Threegold Resources Inc.  
(Threegold), which had been one of the companies contemplated before First  
Global became the fundraising vehicle (see paragraph [50] above). The  
relationship with Threegold had not previously been formally concluded.  
[59] Preparatory steps were taken, and on December 22, 2015, Bajaj (as a director of  
Threegold) signed an agreement pursuant to which First Global assigned $3.43  
million of the First Global debentures to Threegold. However, challenges arose  
because Threegold was not actively listed on the TSX-V, and if that issue were  
not addressed, investors would suffer significant tax penalties.  
[60] Threegold made efforts to resolve the issue, but those efforts were not  
successful. The proposed reverse take-over transaction with Threegold, which  
had been contemplated before First Global became involved, was never effected.  
Ultimately, in December 2017, First Global accepted the reassignment of the  
First Global debentures back from Threegold.  
2.10 Loans from EH  
[61] One investor provided funding for the Colombian operations through a channel  
other than the First Global debentures. In July and August of 2015, investor EH  
provided loans totaling $450,000. Staff and Aziz dispute which entity EH invested  
in, and the extent of Aziz’s involvement. We explore these issues in detail in our  
analysis below (see discussion of the “GBR Debenture” beginning at paragraph  
[62] Staff alleges that Aziz and GBR Ontario perpetrated securities fraud in respect of  
these loans. EH received a limited number of interest payments (fewer than EH  
was entitled to) but no principal.  
2.11 Purported licence transactions  
[63] The last category of transactions that form the subject of Staff’s allegations is a  
set of what purported to be licence agreements involving First Global’s subsidiary  
First Global Data Technologies Inc. These agreements stated that individuals  
advanced funds in exchange for exclusive licences to market and deploy First  
Global’s technology. EH, the investor mentioned above, was one of the  
individuals, but there were others.  
[64] At the time these agreements were entered into between First Global Data  
Technologies Inc. and various individuals, there was much discussion involving  
First Global’s principals and First Global’s auditor and accounting staff about the  
appropriate accounting treatment for the agreements. In one set of year-end  
comparative financial statements, and three succeeding quarterly interim  
financial reports, First Global recognized significant revenue from the  
agreements. Concerns were raised about whether it was appropriate to recognize  
revenue equal to the sums advanced by the individuals, as opposed to treating  
the sums received as liabilities (due to the obligation to repay the amount  
advanced at the end of the term of the agreement) or deferred revenue.  
[65] First Global’s auditor signed a clean audit opinion for the year-end statements  
that recognized revenue. He later changed his view, following further discussions  
with First Global management. First Global eventually restated the various  
financial results, to exclude the revenue.  
[66] Before we address the merits of Staff’s allegations, we review three preliminary  
two requests by Alli to adjourn the merits hearing, immediately prior to  
and immediately after the commencement of, the hearing;  
our mid-hearing ruling (for reasons to follow) about the admissibility of  
certain testimony, given Staff’s objection on the ground that the  
substance of the testimony was not properly disclosed before the hearing;  
our mid-hearing ruling (for reasons to follow) about the right of  
respondents to cross-examine each other, and the procedure to be  
followed in hearings with multiple respondents.  
[67] We note here as well that after the evidentiary portion of this hearing had  
concluded, Alli brought a motion to stay this proceeding. Staff brought a motion  
to dismiss Alli’s stay motion. On consent, we ordered that Staff’s motion to  
dismiss be heard in writing. We issued our decision to grant Staff’s motion,2 and  
our reasons for that decision are issued simultaneously with, but separately  
from, this decision.3  
[68] We will now address in turn the three preliminary matters mentioned above.  
Alli’s requests to adjourn the merits hearing  
[69] We begin with Mr. Alli’s requests to adjourn the merits hearing.  
October 1, 2020, request  
[70] Less than a week before the merits hearing was set to begin, Mr. Alli requested a  
30-day adjournment for several reasons, primarily to retain new legal counsel.  
Mr. Alli had previously been represented by counsel at the preliminary  
(2021) 44 OSCB 10375  
First Global Data Ltd (Re), 2022 ONCMT 24  
attendances in this matter, but by September 24, 2020, that counsel was no  
longer retained.  
[71] After hearing submissions from the parties, that panel (differently composed  
than this panel) advised that for reasons to follow, the merits hearing would  
proceed as scheduled, beginning the following Monday, October 5, 2020. The  
reasons for that decision are published simultaneously with, but separately from,  
this decision.4  
[72] At the motion hearing, and in its reasons, the panel stated that the decision on  
the October 1 adjournment request would not preclude any future counsel  
retained by Mr. Alli from bringing a further request for adjournment, should new  
facts or evidence become available.  
October 7, 2020, request  
[73] By the second day of the merits hearing, Mr. Alli had retained new counsel,  
Mr. Syed, who attended on his behalf. At the commencement of the hearing day,  
counsel for Mr. Alli made a request for a week-long adjournment, citing the large  
volume of material he needed to review in order to effectively represent his  
client, given his recent retainer.  
[74] Staff opposed the request, citing the facts that the hearing had already begun,  
and investor witnesses were scheduled to begin their testimony that week. Staff  
submitted that the “exceptional circumstances” requirement under Rule 29 of the  
Rules of Procedure and Forms had not been met.  
[75] As the Tribunal has previously held, the “exceptional circumstances” standard is  
a "high bar" that reflects the important objective set out in Rule 1, that Tribunal  
proceedings be "conducted in a just, expeditious and cost-effective manner.  
This objective must be balanced against the parties' ability to participate  
meaningfully in hearings and to present their case. A determination about  
whether to grant an adjournment is necessarily fact-based.5  
First Global Data Ltd (Re), 2022 ONCMT 23  
2019 ONSEC 40 (Money Gate) at para 54, citing Pro-Financial Asset Management Inc (Re), 2018  
ONSEC 18 at para 28 and Cheng (Re), 2018 ONSEC 13 at paras 5-6  
[76] Mr. Alli did not provide any additional facts or evidence supporting his request  
for an adjournment, aside from his recent retainer of new counsel. In Money  
Gate, the Tribunal explained that “while a party is generally entitled to choose its  
counsel without any obligation to explain its choice, that rule cannot apply when  
the party seeks to rely on a change of counsel to justify an adjournment  
request.6 In those circumstances the party must provide evidence that the  
change of counsel constitutes exceptional circumstances. Mr. Alli failed to  
provide any such evidence.  
[77] The panel denied Mr. Alli’s request for an adjournment. Mr. Alli failed to meet his  
onus of establishing exceptional circumstances that warrant an adjournment of  
the merits hearing, and the hearing continued as scheduled.  
Mid-hearing ruling on the admissibility of testimony about a meeting  
with Roch (GBR Colombia’s lawyer)  
[78] We now turn to our mid-hearing ruling on the admissibility of testimony about a  
meeting that involved GBR Colombia’s lawyer.  
[79] During the hearing, Aziz sought to testify about a meeting held in Montreal on  
October 12, 2015, at the offices of Steven Roch, of the firm of Colby Monet,  
which acted for GBR Colombia and various entities controlled by Garcia. Present  
with Aziz at the meeting were Garcia, Bajaj, Thiviyanayagam, Faille and Grenier.  
[80] Aziz wished to testify about a discussion at that meeting, at which Roch allegedly  
told the group that they could retain a reserve amount from funds raised, to  
cover interest obligations owing to investors.  
[81] Staff objected to the admission of this testimony on the basis that Staff had not  
been given sufficient notice of this anticipated evidence in pre-hearing  
disclosure, contrary to Rule 27 of the Rules of Procedure and Forms. That rule  
provides that parties may not rely on evidence that was not disclosed as  
required, unless the panel permits.  
[82] After hearing submissions, we decided to admit the evidence, without prejudice  
to the ability of any party (including Staff) to make submissions following the  
Money Gate at para 58  
hearing about what weight, if any, ought to be attached to the evidence. We  
advised that our reasons for that decision would follow, and we set out those  
reasons here.  
[83] The idea of retaining a portion of the raised funds in order to pay interest to  
earlier investors was incorporated into a GBR Colombia resolution signed at the  
meeting in Montreal, by Garcia, Aziz, Thiviyanayagam and Bajaj. The resolution  
said that “14% of raised fund [sic] will keep [sic] for interest purposes”.  
[84] Staff called Garcia as a witness at the hearing. She testified that Roch drafted  
the resolution. On cross-examination, she was asked whether there was any  
discussion at the meeting about 14% being retained for interest purposes. She  
said she did not remember.  
[85] In his testimony, Aziz explained that production in Colombia at the time was  
insufficient to fund interest obligations to the First Global debenture holders,  
which made Bajaj concerned. Following discussion among everyone including  
Roch, the decision was to retain 14% of the raised funds to cover interest in the  
first year, in case there was a shortfall.  
[86] In submissions about the admissibility of this testimony, Aziz conceded that his  
summary of anticipated evidence, delivered to Staff as required before the  
hearing, did not refer specifically to this evidence. However, Aziz submitted that  
Staff received notice of this evidence through Roch’s summary of anticipated  
evidence, which said that Roch would testify about:  
how he “advised [GBR Ontario] and [GBR Colombia] on how to raise  
money in compliance with applicable securities laws”;  
the resolutions signed at the meeting, including the one referred to  
above; and  
“the flow of funds from [GBR Colombia] investors through the Fundraising  
into Olympia Trust, to his own trust account at Colby Monet, and then on  
to Ms. Garcia and Mr. Grenier in Colombia.”  
[87] Aziz notes that during Staff’s investigation, Staff did not interview Roch. Further,  
once confronted by this evidence from Aziz, Staff could have asked for some  
relief, including an adjournment if necessary to adduce evidence in response.  
Presumably, that could have been done by having Roch testify orally or provide  
an affidavit. Staff also chose not to request that Bajaj be recalled so that Staff  
could ask him about that evidence.  
[88] Staff submits that the failure to disclose before the hearing “prevent[ed] any  
pre-hearing investigation of the evidence by Staff. We do not accept that  
submission. Staff was free, during its investigation, to ask questions of any of  
the attendees at the meeting, including Roch. Staff knew about the meeting, at  
least through Staff’s own witness Garcia, and Staff had the resolutions. Staff was  
in no way prevented from investigating as it saw fit.  
[89] Staff submitted that a party cannot rely on the summary of anticipated evidence  
of one witness to allow another witness (in this case, a respondent witness, Aziz)  
to testify about something. That may be an appropriate outcome in some cases,  
but we are not prepared to adopt that approach as a categorical rule. The  
purpose of pre-hearing disclosure is to put parties on notice of issues in the  
proceeding and evidence that may be given. There is no policy reason to treat  
each witness’s evidence separately in all cases. In some cases, the admissibility  
decision might turn on who the source of the anticipated testimony is. We do not  
think that applies in this case.  
[90] Roch’s summary of anticipated evidence gave Staff enough pre-hearing notice  
that discussions at the Montreal meeting were at issue. In addition, Staff’s own  
witness Garcia testified about the meeting and that Roch drafted the resolution.  
Staff was not prejudiced by Aziz testifying about the same meeting.  
[91] For these reasons, we ruled that Aziz’s testimony was admissible.  
Mid-hearing ruling on the rights of respondents to cross-examine each  
[92] As a final preliminary matter, we explain our mid-hearing ruling about the rights  
of respondents to cross-examine each other and the procedure to be followed in  
hearings with multiple respondents who wish to question each other.  
[93] During the evidentiary portion of the hearing, these questions arose. It appeared  
to the parties and to us that the questions had not been squarely addressed in a  
Tribunal decision in the context of competing submissions. Following our receipt  
of helpful submissions from the parties before us, we gave our ruling and  
advised that our reasons for that ruling would be incorporated in these reasons.  
[94] We begin by noting that the term “cross-examination” describes examination of  
a witness by another party, as opposed to by the representative for the party  
that called the witness. Questions in cross-examination may be leading (i.e.,  
suggesting the answer in the question) and often are leading, but even if they  
are not leading, they are still cross-examination.  
[95] In this hearing, the issue arose in the context of one respondent (or their  
representative) examining another respondent, as opposed to examining a  
non-party witness called by another respondent. The principles set out here may  
well apply equally to non-party witnesses, but our ruling was and is confined to  
respondents as questioners and witnesses.  
[96] During the hearing, we ruled that:  
on issues where the two parties were adverse in interest, they were  
entitled to cross-examine each other, including by asking leading  
on issues where the parties were aligned in interest, they were entitled to  
cross-examine each other, but were not permitted to ask leading  
questions; and  
on issues where it was not clear whether the parties were adverse or  
aligned in interest (including because respondents in enforcement  
proceedings before the Tribunal do not file a formal response to the  
Statement of Allegations), we would err on the side of caution and permit  
leading questions, but the questioning party would bear the risk of the  
resulting answer being given less weight if it ultimately became clear that  
the parties were aligned in interest.  
[97] As matters of practice:  
a. we ruled that a testifying respondent be cross-examined by their  
co-respondents first (in an order determined by the panel after hearing  
submissions) and then by Staff;  
we encouraged the questioning parties to advise when they were about to  
move into questions about a different issue, so that we could determine  
(after hearing submissions if necessary) whether leading questions would  
be permitted on that issue; and  
we adopted a practice of permitting co-respondents, after Staff’s  
cross-examination, to conduct re-direct examination of the witness within  
the normal boundaries, i.e., to address any issue on which the questioner  
and the witness were aligned in interest and where the purpose of the  
re-direct questions was to address matters raised in cross-examination.  
[98] The core principles underlying our decision are well explained by the Superior  
Court of Justice in Elder v Rizzardo Bros Holdings Inc:7  
cross-examination is an integral part of the adversarial process we employ  
in hearings to find the truth;  
cross-examination is designed to challenge or discredit evidence given in  
chief, so leading questions are permitted for those purposes; and  
leading questions in non-adversarial circumstances could distort rather  
than enhance the truth-finding objective, and the rationale for permitting  
leading questions is absent.8  
[99] We also referred to the decision of the Court of Appeal for Ontario in  
R v McLaughlin,9 which while a case arising in criminal law, offers useful  
guidance. The Court held that once an accused person chooses to testify, that  
person subjects themselves to cross-examination, whether for impeachment  
purposes or to elicit testimony favourable to the questioner.10 The ability of an  
accused to cross-examine a fellow accused (i.e., by asking leading questions) is  
an important right for the former.11  
2016 ONSC 7235 (Elder)  
Elder at paras 22, 24-26 and 30  
1974 748 (McLaughlin)  
McLaughlin at para 15  
McLaughlin at para 17  
[100] As for “sweetheart” evidence (where a party asks questions to bolster a common  
position or set of facts), the Court of Appeal held that allowing one accused to  
cross-examine another could permit the questioner to put their defence before  
the court without testifying and thereby exposing themselves to  
cross-examination. The Court stated, however, that this was not “a matter of  
great concern”, because in deciding what weight to give to the evidence, the  
trier of fact would note, among other things, the form of the question that  
elicited the answer.12  
[101] This Tribunal has previously considered the issue in part. In reasons for decision  
at the conclusion of a hearing on the merits in Natural Bee Works Apiaries  
Inc (Re), the Tribunal reviewed instructions that it had given to the respondents  
about their ability to cross-examine each other.13 The Tribunal stated that in  
cross-examination, the questions must be on matters where the co-respondents  
are adverse in interest, and that the respondents were not allowed to ask  
questions to bolster a common position or set of facts.  
[102] It does not appear from the reasons in that case that the issue had been the  
subject of opposing submissions, or that the panel was required to turn its mind  
to whether there was a middle ground between adversity and bolstering. In our  
view, there will be circumstances where parties who are aligned in interest on an  
issue can legitimately ask non-leading questions whose purpose is not to  
improperly bolster testimony, but instead is, for example, to clarify an answer  
given earlier or fill in a gap that would be best addressed by the respondent  
being questioned. The reasons in Natural Bee Works do not expressly preclude  
those possibilities, and in our view such a refinement on the language in that  
decision is more consistent with the principles set out in the authorities cited  
[103] The panel is of course always able to control any examination by any party, to  
ensure that it respects applicable parameters, and to ensure that the hearing is  
conducted in a fair and efficient manner.  
McLaughlin at para 23  
2019 ONSEC 23 (Natural Bee Works) at para 44  
[104] For these reasons, we issued the mid-hearing ruling described in paragraph [96]  
[105] We turn now to our analysis of the merits of Staff’s allegations.  
[106] Given the complex factual matrix underlying the allegations, as well as the  
number of respondents and their differing interests, we have organized our  
analysis in three main parts, each of which focuses on a group of significant  
transactions. Those three categories are:  
sales of the First Global debentures;  
the loans from investor EH; and  
the First Global purported licence transactions.  
[107] With respect to each of the three groups of transactions, Staff alleges that one or  
more respondents contravened a number of different provisions of Ontario  
securities law.  
[108] We will address each group of transactions in turn. In our discussion of each  
group, we will begin by describing the factual background, followed by our  
analysis of the allegations relating to that group. We start with the First Global  
[109] Staff alleges that some or all respondents breached Ontario securities law in  
several ways relating to the First Global debentures:  
by illegally distributing those debentures (i.e., without a prospectus and  
without an exemption from the prospectus requirement);  
by engaging in the business of trading the debentures without being  
registered to do so; and  
by perpetrating fraud in connection with the debentures.  
[110] We will address each of these, beginning with the alleged illegal distribution of  
the First Global debentures.  
Alleged illegal distribution  
[111] Staff alleges that the First Global debentures were illegally distributed, because  
they had never previously been traded before they were sold to investors, no  
prospectus was filed and receipted, and no exemption was available from the  
prospectus requirement. Of those elements, the only one about which there was  
any real dispute was whether an exemption was available. First Global purported  
to rely on the accredited investor exemption, which allows an issuer to proceed  
without a prospectus in respect of distributions to investors who meet certain  
qualifications. The issuer must take steps to document the availability of, and  
reliance on, that exemption.  
[112] As we explain below, we conclude that in none of the distributions of First Global  
debentures was the accredited investor exemption available. We therefore find  
that First Global illegally distributed the debentures. We further find that the  
other respondents directly participated in that illegal distribution.  
Factual background  
[113] A possible alignment of interests between First Global and GBR became apparent  
to some of the respondents in the late spring of 2015. First Global was  
experiencing financial difficulties, and GBR needed a public company to use as a  
vehicle to raise capital from holders of registered accounts (e.g., TFSA, RRSP) to  
further development of the Colombian assets. This alignment of interests formed  
the basis for what ultimately evolved into distribution of First Global debentures,  
with First Global and GBR splitting the funds raised through those distributions.  
[114] We heard conflicting evidence about the evolution of this idea, from the initial  
plan to the mechanism that was put in place. For example, while it is undisputed  
that Bajaj took on significant responsibility for raising funds from investors, it is  
unclear what limits, if any, there were on his responsibility. Alli (First Global’s  
CFO) testified that because Bajaj was not qualified to be a broker to raise funds,  
Bajaj’s responsibility was only to bring investors to First Global.  
[115] Bajaj denies that there was such a limitation. Whatever the truth about whether  
there was supposed to be a limitation, things did not proceed in a way that  
resembled Alli’s version. Bajaj proceeded as if there had been no limitation. He  
did significantly more than simply refer investors, in that he gave regular  
seminars regarding the investment opportunity, he met with the investors, he  
explained aspects of the investment, and he worked with the investors to  
complete subscription documents.  
[116] We explore Bajaj’s role in further detail below. We turn now to analyze the  
allegation of illegal distribution by First Global.  
Analysis of First Global’s alleged illegal distribution  
[117] Every issuance of the First Global debentures was a “distribution”, as that term is  
defined in the Act, because the debentures had not previously been issued.14  
Section 53(1) of the Act prohibits the distribution of securities unless a  
prospectus has been filed and a receipt for the prospectus has been issued, or an  
exemption is available.  
[118] No prospectus was filed. Alli is incorrect in his unsubstantiated submission that  
none was required.  
[119] Ontario securities law does provide numerous exemptions from this requirement.  
However, where a respondent seeks to rely on an exemption, the respondent  
must file a report of exempt distribution (Form 45-106F1), which provides a wide  
range of information about the distribution, including the particular exemption  
relied on. Whichever exemption the issuer seeks to rely on, the issuer ultimately  
bears the burden of establishing their entitlement to that exemption.15  
[120] First Global filed no reports of exempt distribution in respect of the First Global  
debentures. Despite this, in this proceeding the respondents asserted to varying  
extents that some steps were taken at the time of investment to show that First  
Global was relying on the accredited investor exemption provided for in s. 2.3 of  
National Instrument 45-106 Prospectus Exemptions (NI 45-106). That  
exemption applies where certain requirements are met, including prescribed  
income and asset thresholds for the investor.16  
Act, s 1.1, “distribution”  
Meharchand (Re), 2018 ONSEC 51 (Meharchand) at para 95  
Act, s 73.3(1)(j); NI 45-106, s 1.1 “accredited investor” (j) to (m)  
[121] As the Tribunal has previously held, issuers that rely on the accredited investor  
exemption cannot, without further investigation, simply rely on an investor’s  
certification as to their accredited status. Before accepting a prospective  
subscription, the issuer must go beyond any boilerplate language in a  
subscription agreement and must conduct a serious factual inquiry in good  
[122] The investor witnesses testified either that the term “accredited investor” was  
not discussed with them (in the case of investors KF, SR and KG) or that they  
were told that the accredited investor forms were just a formality (in the case of  
investor JN). Bajaj denied saying that to the investors. Instead, Bajaj claimed  
that every investor who met with him told him that “they have enough assets  
back home” worth more than $1 million, and that that was sufficient to qualify as  
an accredited investor.  
[123] We prefer the testimony of the investor witnesses, which is consistent from one  
witness to another, and is consistent with the perfunctory manner in which the  
subscription documents and other agreements were completed (by Bajaj, among  
others), often after the fact, as attempts of varying quality that purported to  
memorialize practices that were already being followed.  
[124] In any event, even if we believed Bajaj’s assertion that every investor said they  
had assets worth more than $1 million “back home”, that assertion, unsupported  
by any documentary evidence, would be insufficient to meet the standard of a  
serious factual inquiry. It would also fail to meet the asset threshold for the  
accredited investor exemption, which requires either financial assets (as opposed  
to total assets) of more than $1 million, or total assets of more than $5 million.  
In both cases, the minimum asset amount is net of related liabilities.  
[125] Itwaru submits that in 2015, his understanding of First Global’s obligations was  
that First Global simply had to verify that each investor had completed an  
accredited investor certificate. Unfortunately for Itwaru, his understanding was  
incorrect, as we have explained above regarding an issuer’s obligation to conduct  
appropriate due diligence.  
Money Gate at para 189  
[126] Alli offered two additional responses to the allegation that First Global illegally  
distributed its debentures.  
[127] First, Alli submitted that each capital raise that First Global completed was  
recorded in First Global’s financial statements. Even if true, that fact does not  
relieve First Global of its securities law obligations with respect to the  
[128] Second, Alli submitted that for each capital raise, First Global relied on the  
expertise of its counsel. A defence of reasonable reliance on legal advice is not  
available for an alleged breach of s. 53(1) of the Act,18 but even if it were, First  
Global would have to show that its counsel advised First Global that it was  
entitled to distribute the debentures without a prospectus, and the reasons for  
that conclusion. First Global offered no such evidence.  
[129] We conclude that the accredited investor exemption was unavailable to First  
Global because:  
none of the investors who testified before us was in fact an accredited  
despite Bajaj’s assertions to the contrary, the investor witnesses were not  
given an explanation of the subscription documents, and they signed  
blank documents and/or initialed them where they were told; and  
the completed documents were provided to First Global (the issuer of the  
debentures), whose staff simply reviewed the forms to ensure that the  
accredited investor certificates were completed, without having any  
contact with the investors.  
Conclusion about the allegation that First Global illegally distributed its  
[130] The First Global debentures were securities that had not previously been issued.  
No prospectus was filed, no relief from the prospectus requirement was obtained,  
and First Global has failed to show that it was entitled to rely on any exemption  
from that requirement, including the accredited investor exemption.  
Money Gate at para 195  
[131] Accordingly, each trade in First Global debentures was an illegal distribution and  
constitutes a breach by First Global of s. 53(1) of the Act.  
[132] Staff submits that we should make a similar finding against each of the other  
respondents. We turn now to consider that submission.  
Role of the other respondents in First Global’s illegal distributions  
Itwaru and Alli  
[133] We begin with First Global’s principals, Itwaru and Alli. Staff alleges that Itwaru  
and Alli participated directly in First Global’s illegal distributions, or alternatively  
that they should be deemed not to have complied with Ontario securities law  
because they authorized, permitted or acquiesced in First Global’s non-  
[134] We conclude that each of Itwaru and Alli played a direct role in the illegal  
both were involved in negotiating the First Global-GBR Debenture  
Agreement, the foundational document pursuant to which GBR Colombia  
agreed to assist First Global in raising funds through the sale of the First  
Global debentures;  
Itwaru signed the First Global-GBR Debenture Agreement on behalf of  
First Global;  
both voted as directors of First Global to approve the debenture offering;  
Itwaru signed the debentures on behalf of First Global; and  
both Itwaru and Alli signed and accepted subscription documents on  
behalf of First Global.  
[135] Alli submits that neither he nor Itwaru ever issued the debentures directly to  
purchasers. While that may be true in a literal sense, in that neither of them  
physically handed a debenture to an investor, Staff need not show physical  
delivery in order to establish an individual’s direct participation in an illegal  
distribution. We return to this point below (at paragraph [146]) in our discussion  
about Aziz’s role in the distributions.  
[136] We find that Itwaru and Alli, as principals, contravened s. 53(1) of the Act by  
participating directly in the illegal distribution of First Global debentures.  
[137] Even if we had not found that Itwaru and Alli participated directly as principals,  
we would have found that as directors and officers of First Global they authorized  
First Global’s illegal distributions, and therefore by virtue of s. 129.2 of the Act,  
they would be deemed to have contravened Ontario securities law.  
GBR, Bajaj and Aziz  
[138] We turn next to the GBR Ontario Parties, i.e., GBR Ontario and its principals  
Bajaj and Aziz. Staff alleges that all three directly participated in First Global’s  
illegal distributions.  
[139] In considering the role of each of the three GBR Ontario Parties, it is useful to  
understand, at a high level, two PowerPoint presentations that the GBR Ontario  
Parties used to solicit new investors and, to some extent, to update existing  
investors. We will examine the contents of these presentations in greater detail  
later in these reasons, but the presentations may be described briefly as follows:  
Colombia Presentation Many iterations of this presentation were  
entered into evidence. Through to February 2016, its contents were  
updated as new information was acquired, or in response to questions  
asked by investors at seminars. The presentation gave information about,  
among other things:  
GBR, and its assets and reserves;  
the advantages of investing in Colombia;  
bio-diesel and bitumen generally;  
how investor funds would be used;  
how the investment would be secured;  
expected revenues from the bio-diesel and bitumen operations;  
methods of investment (e.g., RRSP, TFSA) and their corresponding  
returns; and  
risk mitigation strategies.  
Mortgage Presentation This presentation offered scenarios whereby  
investors could pay down personal mortgages on their homes more  
quickly by using savings, or by borrowing funds, to invest and receive  
royalty payments from the investment in First Global debentures.  
Bajaj’s role  
[140] Bajaj, on behalf of GBR, led the effort to sell the First Global debentures. Most  
investors were Bajaj’s clients from his tax business, or individuals who had been  
referred to Bajaj.  
[141] Bajaj had been actively fundraising for the Colombian assets before First Global  
became involved. Once Bajaj, Aziz and Thiviyanayagam had agreed on their  
desire to use a public company as the investment vehicle so that holders of  
registered accounts could invest, the three of them had short-lived relationships  
with two other public companies (Threegold Resources Inc. and Northern  
Coast Financial Limited) before engaging First Global.  
[142] Bajaj described himself as a member of the GBR fundraising team, along with  
Aziz and others. His direct participation and central role in the fundraising  
throughout is evident from the following:  
in March 2015, before First Global became involved, he and  
Thiviyanayagam traveled to Montreal to meet with the president of  
Northern Coast, one of the two public companies that was originally to  
have been used as the fundraising vehicle;  
he reviewed drafts of the Northern Coast subscription documents;  
he completed copies of the Northern Coast subscription documents and  
presented them to investors (although no investors ever completed  
purchases of Northern Coast bonds as intended, because Northern Coast  
terminated the relationship in early July 2015 for reasons we explain  
he conducted seminars at the Richmond Hill office, during which he  
explained the Colombian investment opportunity in bitumen and biodiesel  
to potential and existing investors, including to individuals who were  
helping to solicit new investors these seminars began in March or April  
of 2015 (before First Global became the public company vehicle for the  
fundraising) and continued throughout 2015;  
he drafted the Colombia Presentation, presented it at seminars at the  
Richmond Hill office, and asked investors to show it to other people;  
he signed a GBR Colombia board resolution as one of the company’s  
directors, confirming that version 85 of the Colombia Presentation  
(entitled “Bio-Diesel & Bitumen”) could show investors the biodiesel plant  
and Rio Negro bitumen mineral rights, including pictures of both, as being  
part ofGBR Colombia;  
he prepared and showed the Mortgage Presentation, encouraging  
investors to borrow money through a secured line of credit to invest in the  
First Global debentures;  
he participated in reviewing drafts of the First Global subscription  
documents (including the attached term sheet) and in preparing packages  
for investors that included those documents as well as account opening  
beginning in July 2015, he started raising funds using the First Global  
subscription documents;  
he prepared and distributed brochures that were available at the  
Richmond Hill office, were handed out to seminar attendees, and were  
also sent to investors by mail;  
when his tax clients came to his office, Bajaj spoke to them about the  
investment opportunity, showed them the presentations and brochures,  
and encouraged them to attend the seminars at the Richmond Hill office;  
he prepared and placed radio advertisements, some but not all of which  
mentioned that investment in the First Global debentures was for  
accredited investors;  
he met with investors to help them fill out First Global subscription  
documents as well as Olympia Trust account opening and transfer  
documents, and provided the Olympia Trust documents to Olympia Trust;  
he managed a referral network for sales of First Global debentures, and  
received and paid referral fees from and to his team of agents, which  
team together with Bajaj himself raised over $3.8 million from 68  
investors through 85 subscriptions for First Global debentures.  
Aziz’s role  
[143] Aziz’s involvement was less central, but he also participated directly in the  
fundraising efforts, including the distribution of First Global debentures:  
he reviewed, or at least was given an opportunity to review, drafts of the  
Northern Coast subscription documents;  
he was included in correspondence that exchanged draft First Global  
subscription documents and drafts of the Colombia Presentation, which  
drafts Aziz reviewed and approved;  
he and Thiviyanayagam came up with the idea to use brochures to market  
the investment;  
Bajaj gave him packages of First Global subscription documents and  
account opening forms because Aziz was speaking to existing and  
potential investors;  
as the sole signatory on behalf of GBR, he signed the foundational First  
Global-GBR Debenture Agreement referred to above, which agreement  
contemplated the First Global debentures being offered to the public;  
he had his own office in the Richmond Hill office space that was used for  
the seminars;  
he signed rent cheques on behalf of GBR Ontario, the only business of  
which was to raise funds by selling First Global debentures;  
he was aware of Bajaj’s radio advertisements referred to above and  
received at least one script of an advertisement, and concluded that Bajaj  
should not be advertising on the radio, although there is no evidence that  
he expressed that concern to Bajaj;  
he approved payment of the referral fees mentioned above;  
he provided First Global subscription documents to GBR staff and directed  
staff to send packages to investors;  
as he admitted, he remained in close contact with Bajaj, Thiviyanayagam,  
Garcia and Grenier and he was kept generally apprised of the status of the  
Colombian projects; and  
subscription documents showed that he was the salesperson for at least  
$288,305 of First Global debentures, and together with Faille solicited  
approximately $600,000 of debenture investments.  
[144] In addition, we find that Aziz attended and spoke at several seminars regarding  
the potential investment. Investor witness JN, who regularly attended the  
seminars, testified that Aziz came to four or five of the seminars, and that on at  
least two of those occasions Aziz: (i) talked about having just returned from  
Colombia, and (ii) advised that the project was going well and that investors’  
money was safe.  
[145] In his submissions, Aziz sought to minimize his involvement in these seminars.  
However, we accept JN’s testimony, which was corroborated by Bajaj to a  
material extent in this respect, and which is more consistent with the broad  
range of activities set out above in which Aziz was involved. Further, Aziz did not  
cross-examine JN on this aspect of his testimony. Accordingly, we are unable to  
accept his submission that we should prefer his version over JN’s.  
[146] Aziz also submits that he cannot be found to have “distributed” the First Global  
debentures because a distribution is a kind of trade, and he did not “trade” the  
First Global debentures. Aziz further submits that he could not reasonably have  
known that First Global was not entitled to an exemption (including the  
accredited investor exemption) in respect of those investors who subscribed for  
First Global debentures. He submits that we should narrowly construe the  
prohibition in s. 53(1) and that he should not be found to have contravened it.  
[147] We cannot accept that submission. Subsection 53(1) does not provide or even  
suggest that it applies only to the issuer whose securities are distributed.  
Indeed, the language explicitly includes any individual who trades the issuer’s  
security on behalf of that issuer, as the following excerpt demonstrates:  
No person… shall trade in a security… on behalf of any…  
company if the trade would be a distribution of the security,  
unless a preliminary prospectus and a prospectus have been  
filed… [emphasis added]  
[148] Further, a “trade” is not limited to the actual purchase or sale of the security.  
The term “trade” is defined in the Act19 to include acts, solicitations, or other  
conduct directly or indirectly in furtherance of a trade.  
Conclusion about the GBR Ontario Parties’ roles in the illegal  
[149] We find that by their many activities in aid of securing investors for the First  
Global debentures, Bajaj and Aziz, and through them GBR Ontario, traded the  
First Global debentures on behalf of First Global. Aziz’s participation was less  
active than Bajaj’s, but he was nonetheless fully involved.  
[150] As we concluded above, the trades were distributions of the securities.  
Accordingly, we find that each of the GBR Ontario Parties directly contravened  
s. 53(1) of the Act.  
Engaging in the business of trading the First Global debentures without  
being registered  
[151] We turn now to Staff’s allegation that GBR Ontario and its principals Bajaj and  
Aziz engaged in the business of trading in securities. If they did, then because  
none of them was registered under the Act, they will have violated s. 25(1) of  
the Act. We conclude that they did violate that provision.  
[152] The meaning of “engaged in the business of trading in securities” is addressed in  
Companion Policy 31-103CP Registration Requirements, Exemptions and  
Ongoing Registrant Obligations. That Companion Policy suggests criteria that  
Act, s 1(1), “trade”  
help determine whether a person or company is engaged in the business of  
trading in securities.  
[153] The Companion Policy is not part of Ontario securities law and therefore is not  
directly binding on the respondents. However, in other proceedings the Tribunal  
has adopted the “business purpose” test in s. 1.3 (also referred to as the  
“business trigger” test), on which Staff relies.20 Of the factors that are included  
in the test, the following are relevant in this proceeding:  
trading with repetition, regularity or continuity, whether or not that  
activity is the sole or even primary endeavour of the business;  
directly or indirectly soliciting securities transactions;  
receiving, or expecting to receive, compensation for trading; and  
engaging in activities similar to those of a registrant, including by  
promoting the sale of securities.  
[154] We adopt the test and will assess each of these factors in turn.  
Trading with repetition, regularity and continuity  
[155] In the eight-month period in 2015 that GBR Ontario was raising funds, it raised  
over $4.46 million from 80 investors in 104 separate transactions.  
[156] That timing and frequency place the trading in this case at the high end of the  
spectrum for repetition, regularity and continuity. By this criterion, the GBR  
Ontario Parties’ conduct suggests that they were engaged in the business of  
trading securities.  
Directly or indirectly soliciting securities transactions  
[157] We set out above, in paragraphs [142] and [143], Bajaj’s and Aziz’s specific and  
direct involvement in soliciting investment in the First Global debentures. These  
efforts yielded the desired results of attracting investors, including individuals  
who had been referred by others and individuals who had heard about the  
opportunity through the radio advertisements.  
See, e.g., Money Gate at para 145  
[158] Within GBR Ontario, Bajaj and Aziz’s exclusive focus on these fundraising efforts,  
as opposed to any other aspect of First Global’s or GBR’s business, strongly  
suggests that they were engaged in the business of trading in securities.  
Receiving, or expecting to receive, compensation for trading  
[159] Bajaj testified that he received over $114,000 in referral fees in return for  
soliciting investors in the First Global debentures. The fact that he earned this  
large amount in the short time, and for no activity other than selling debentures,  
strongly suggests that he was engaged in the business of trading in securities.  
[160] Aziz did not receive referral fees. However, he understood that he was to receive  
a one-sixth ownership interest in GBR Colombia for two reasons: (i) because he  
introduced all the parties (Bajaj, Thiviyanayagam, Grenier, Garcia and Faille) to  
each other; and (ii) because he introduced many potential buyers of the bitumen  
product in Colombia.  
[161] Aziz not only carried out those introductions; he also spent considerable time  
involved with the fundraising in many ways. We find that it is more likely than  
not that the shares of GBR Colombia he was promised related to his overall work  
with the enterprise, including his fundraising efforts for GBR Colombia via First  
Global. This factor suggests that Aziz was engaged in the business of trading in  
Engaging in activities similar to those of a registrant  
[162] Staff submits, and we agree, that GBR Ontario effectively acted as a dealer of  
the First Global debentures. As itemized above, the GBR Ontario Parties did  
many of the things that a registered exempt market dealer would normally do,  
including by actively soliciting investments, providing and completing  
documentation, and acting as an intermediary between the investors and the  
[163] This conduct by the GBR Ontario Parties strongly suggests that they were  
engaged in the business of trading.  
Conclusion about Staff’s allegation that GBR, Bajaj and Aziz were  
engaged in the business of trading  
[164] Bajaj, Aziz and Thiviyanayagam founded GBR Ontario and were its only directors  
and shareholders. Bajaj testified that the three of them, along with Faille, were  
GBR’s fundraising team, engaging in sales efforts themselves and creating and  
managing a network of referral agents. Further, GBR Ontario carried on no  
business other than raising funds through the sale of First Global debentures, a  
portion of which was to flow through to GBR Colombia.  
[165] Simply put, GBR Ontario’s business was the trading of First Global debentures.  
GBR Ontario did so repeatedly, continuously and regularly during the  
eight-month fundraising period in 2015. Bajaj and Aziz were compensated, or  
they expected to be compensated, for their efforts associated with the business,  
and GBR Ontario’s activities were similar to those of a registered dealer.  
Effectively, those activities took the place of such a dealer, and in so doing, GBR  
Ontario deprived the investors of the protections associated with the involvement  
of a registered intermediary. By these actions, GBR Ontario engaged in the  
business of trading securities and thereby breached s. 25(1) of the Act.  
[166] As Bajaj himself admitted, his role was to raise funds and to show the  
investment opportunity to investors. He was directly compensated for that  
activity, which he carried out continuously. As a result, he too breached s. 25(1)  
of the Act.  
[167] Aziz submits that we should reach a different conclusion about his own  
participation. He submits that his actions were administrative or operational, as  
opposed to fundraising in nature. We accept that his focus was different from  
Bajaj’s, but that distinction is of no material significance. Aziz was directly  
involved in fundraising, as set out in paragraph [143] above. To the extent that  
the fundraising was carried on by GBR through Bajaj, we find that Aziz at least  
acquiesced in that conduct. As a director and officer of GBR, he is therefore  
deemed by s. 129.2 of the Act to have contravened Ontario securities law as  
well, because of GBR’s non-compliance.  
[168] As a result, we find that GBR, Bajaj and Aziz engaged in the business of trading  
securities of First Global, and that they thereby contravened s. 25(1) of the Act.  
Alleged misrepresentations  
[169] The last category of alleged misconduct relating to the First Global debentures  
involves Staff’s allegations that the respondents made three sets of  
[170] At a high level, the first set of alleged misrepresentations (the Use of Funds  
Representations) consisted of two different statements:  
that funds raised would be used for First Global’s general working capital;  
that funds raised would be used for bitumen and biodiesel assets in  
Colombia that were owned by GBR.  
[171] The second set of alleged misrepresentations (the Colombian Operations  
Representations) related to the operational status of the Colombian facilities  
and to whether production from those facilities was sufficient to generate the  
14% annual return owed on the First Global debentures.  
[172] The third set of alleged misrepresentations (the Security Representations)  
included representations that investment in the First Global debentures was  
secure, guaranteed and risk-free.  
[173] All three sets of alleged misrepresentations figure into two different alleged  
contraventions of the Act:  
that GBR Ontario, Bajaj and Aziz (but not First Global, Itwaru or Alli)  
defrauded investors, contrary to s. 126.1(1)(b) of the Act: and  
First Global (and by extension Itwaru and Alli, pursuant to s. 129.2 of the  
Act, because they permitted, authorized or acquiesced in First Global’s  
conduct), GBR Ontario, Bajaj and Aziz contravened s. 44(2) of the Act  
because the representations were about a matter that a reasonable  
investor would consider relevant in deciding whether to enter into or  
maintain a trading relationship with them, and the representations were  
untrue or omitted information necessary to prevent them from being false  
or misleading in the circumstances in which they were made.  
[174] We begin our analysis of the various representations by assessing their truth or  
falsity. After making those factual findings, we will then consider the alleged  
contraventions and determine whether the misrepresentations, if any, constitute  
a breach of the Act.  
Use of Funds Representations  
[175] We begin with the Use of Funds Representations. Much of the documentary and  
oral evidence before us on that question conflicted in numerous respects.  
[176] Staff alleges that representations to investors about the use of their funds fell  
into two categories:  
in the term sheet that formed part of the First Global subscription  
documents, a representation that the funds raised would be used for First  
Global’s “general working capital”; and  
for at least some investors, representations made by Bajaj and Aziz that  
the funds raised would be used to finance GBR’s bitumen mining and/or  
biodiesel operations in Colombia.  
[177] Staff alleges that all these representations were untrue. Specifically:  
neither GBR Colombia nor GBR Ontario had any direct ownership interests  
or business operations in bitumen mining or biodiesel, so no funds were  
directed to such operations as promised; and  
approximately $300,000 of the raised capital was used to make interest  
payments to investors on the First Global debentures and on the loans  
from investor EH.  
[178] In exploring more closely what was said about how the funds were to be used,  
we begin with what the respondents themselves understood the plan to be. As  
will quickly become apparent, those who made the representations cannot  
themselves agree about how the funds were to flow.  
The purposes of the offering as understood by the respondents  
[179] Aziz testified that one of the purposes of the offering was to help First Global  
deploy its mobile and cross-border payment technology in various countries. His  
understanding is corroborated by the First Global-GBR Debenture Agreement, as  
well as promissory notes documenting the loans from First Global to GBR  
[180] Both the First Global-GBR Debenture Agreement and the promissory notes  
expressly refer to the use of funds for technology deployment. The agreement  
provides that the “majority of the proceeds from the Offering shall be used  
toward the deployment of [First Global] services by [GBR Colombia], and for  
[First Global] working capital needs. [emphasis added]The promissory notes  
were less precise about the apportionment of funds, i.e., what portion would be  
devoted to the deployment: “Use of proceeds includes the technology division  
of [GBR Colombia] sourcing and deploying technology of [First Global] in  
Colombia and other countries. [emphasis added]”  
[181] Itwaru gave a similar description. He testified that the First Global-GBR  
Debenture Agreement contained the terms of the arrangement. He described  
what he called the “main thrust” of that agreement as being the establishment of  
First Global’s services and technology in Colombia and elsewhere.  
[182] Alli had the same understanding. He testified that he had limited involvement in  
any of the fundraising activities, because he was focused on First Global’s  
technology. However, he understood that GBR Colombia would launch First  
Global’s technology in Colombia.  
[183] Bajaj, who was not a signatory to the First Global-GBR Debenture Agreement,  
says that he had no knowledge of any efforts to launch First Global’s technology  
in Colombia, and never spoke with Garcia, Grenier or anyone else about that  
technology. Bajaj disputes that there was a fundraising objective related to First  
Global’s technology.  
[184] In Bajaj’s view, the purpose of the offering was to raise funds for the Colombian  
natural resource assets. That this was his understanding is corroborated by:  
the fact that the Northern Coast subscription documents, used before First  
Global became engaged, referred to agreements with GBR Colombia  
relating to bitumen and biodiesel;  
the absence of any mention of the First Global technology in the radio  
advertisements or PowerPoint presentations referred to above;  
an email he sent on September 17, 2015, to Aziz, Faille and  
Thiviyanayagam, requesting a letter from First Global’s lawyer to confirm  
that the funds raised “will not be used anywhere else, it will be used for  
Global bioenergy Resources [sic; i.e., the Colombian bitumen and  
biodiesel assets]”;  
the absence of any evidence that Aziz sought to correct that description  
(in the September 17 email) of how the funds would be used, despite  
Aziz’s testimony before us that all parties understood that some funds  
would be used for First Global technology;  
the fact that of the seven GBR Colombia board resolutions executed in  
October 2015 (which are all the GBR Colombia board resolutions in  
evidence before us), some refer to the bitumen, biodiesel and coal assets  
in Colombia, but none refers to First Global technology;  
the fact that the resolutions’ only reference to First Global is as a vehicle  
through which funds would be raised, and as the transferee of mineral  
rights to secure the debenture holders’ investment;  
the consistency between Bajaj’s testimony and that of the investor  
witnesses who attended seminars led by Bajaj, or with whom Bajaj met,  
or both, in that none of those witnesses was aware of any intention to  
direct a portion of the invested funds to deploy First Global technology;  
Garcia’s testimony to the effect that neither she nor Grenier nor GBR  
Colombia had any involvement in the development of First Global’s  
technology anywhere in South America.  
[185] With this fundamental disagreement among the respondents at the time of the  
solicitation of investors as backdrop, we turn to the representations made to  
those investors.  
The purposes of the offering as represented to the investors  
[186] In this section we review the representations in detail. While investors were told,  
in one form or another, about both of the different uses described above,  
representations about the Colombian natural resource operations predominated.  
[187] The less visible representations, that the funds would be used for First Global’s  
working capital, were contained in the term sheet that formed part of the First  
Global subscription documents, that investors received and that they signed.  
[188] Itwaru submits that the subscription agreements clearly stated that the  
investment in First Global debentures was clearly for use by First Global in First  
Global’s business. In our view, and in the context of this case, Itwaru’s is a  
broader description of permissible uses, since the term sheet specified “general  
working capital” as opposed to a sense of anything First Global might do”. In his  
testimony, Itwaru described what he understood the term “general working  
capital” to be. That description extended to what he called “paying the bills, so to  
speak”, and the expansion of First Global’s business globally, including the  
deployment of First Global’s services in different parts of the world.  
[189] Itwaru did not include in his definition any reference to lending funds to another  
entity for the development of natural resources, an activity that bore no relation  
to First Global’s existing business. Having said that, even if Itwaru had included  
that in his understanding, without proper substantiation, we would not be bound  
by it.  
[190] What is critical for the purposes of this proceeding is how a reasonable investor  
would understand that term, if they even noticed it in the subscription  
documents. If an investor did note that limitation on the use of funds, then in  
our view it would be reasonable for that investor to conclude that the funds could  
be used to further the company’s existing business. We know of no bright line  
test to apply to any potential business, to determine whether use of funds for  
that potential business would fall within “general working capital”, but in the  
specific circumstances before us, we have no difficulty concluding that no  
reasonable investor would understand the words “general working capital” to  
give First Global free rein to do anything it wanted with the funds, without  
[191] We find that this term on the term sheet did not permit First Global to provide  
funds to GBR Colombia for the purpose of developing natural resource projects  
(as opposed to for the geographic expansion of First Global’s existing technology  
[192] We emphasize that in reaching that conclusion, we heard no expert evidence as  
to the meaning of “general working capital”, or even if that term has a clear  
meaning within generally accepted accounting principles or accounting standards  
of any kind. Further, we are unaware of any Tribunal decision that would guide  
us. Staff referred us to Quadrexx (Re),21 which involved some consideration of  
working capital, but, like this case, involved no expert evidence as to the  
meaning of that term.22 We do not opine on what that term might mean in other  
instances. Our finding is limited to the conclusion that in this case, the term did  
not extend to natural resource projects in Colombia.  
[193] In any event, the First Global subscription documents made no mention of any  
business in Colombia, whether implementation of First Global’s technology or  
development of natural resources.  
[194] In contrast, representations by Bajaj and Aziz or in documents prepared and  
issued by them (including the Colombia Presentation) said the funds would be  
used to finance bitumen mining and biodiesel operations in Colombia. As was  
commonly the case generally in the events giving rise to this proceeding, the  
representations and the documents in which they were contained often  
improperly conflated GBR Colombia and GBR Ontario.  
[195] The Colombia Presentation, which contained the impugned representations, was  
shown at the seminars held in the Richmond Hill office and sent regularly to a  
small group of investors, identified four uses for the funds:  
land and road infrastructure costs;  
mineral rights buy-out;  
operating cash flow for biodiesel and bitumen; and  
2017 ONSEC 3 (Quadrexx)  
Quadrexx at para 230  
mining equipment purchase.  
[196] The Colombia Presentation did not suggest, and neither Bajaj nor Aziz told  
investors, that First Global would retain funds raised under its debentures or that  
it would use those funds to deploy First Global technology. Bajaj conceded that  
he knew nothing about First Global’s technology services in Colombia, and that  
he never spoke to investors about that technology. Indeed, according to Bajaj,  
his own understanding largely aligned with the investors’ expectations.  
Specifically, he testified that all the funds (except for First Global’s 2%, as  
explained below beginning at paragraph [211]) were intended for GBR Colombia.  
[197] This fundamental misalignment between First Global’s representations (in the  
subscription documents) and the GBR Ontario Parties’ representations (in person  
and in marketing documents) makes it unsurprising that investors’  
understanding about the intended use of funds differed in substance and in  
amount of detail.  
[198] The investor witnesses testified that they understood that the funds they  
invested were going to be used for natural resource-related projects in Colombia.  
Some investors testified that they did not know of First Global. Others said they  
knew of First Global, but understood that it was simply an intermediary that was  
needed to process their investment because RRSP funds could not be sent  
directly to GBR Colombia, or so that interest could be paid to them. At least one  
investor noted the name First Global but did not understand its role or why the  
investor was investing in a debenture of that company.  
[199] Knowledge about the Colombian operations varied from witness to witness, but  
generally speaking they believed at a high level that the funds would be used to  
start or expand the biodiesel facility, and to buy equipment and infrastructure for  
the bitumen project so that it could increase production. Understandably, at least  
some investors were more concerned with the promised return (of 14%) and  
with the fact that the investment would be RRSP-eligible.  
[200] The fact that most investors understood that their funds would be used for the  
Colombian bitumen and biodiesel projects is not surprising, given the likelihood  
that direct personal representations from individuals such as Bajaj and Aziz  
would easily overcome the language contained in the First Global subscription  
documents, most of which the investors testified they did not read, if they read  
any part of them at all. In this regard, we reject Aziz’s submission that investors  
were told only broadly that funds would go into mining in Colombia. Some may  
have been told that, but many others were told specifically that the funds would  
be used for the bitumen and biodiesel projects, as is reflected in the Colombia  
Presentation, among other things.  
[201] Bajaj used the seminars at the Richmond Hill office not only to solicit new  
investors, but also to update existing investors. However, only a limited number  
of existing investors attended these seminars. Apart from those few investors,  
and a small group who regularly received updated copies of the PowerPoint  
presentations by email, there was no evidence that other investors were kept up  
to date on the status of their investment or of the Colombia projects, including  
the intended asset transfers.  
[202] As for Aziz, we do not accept his attempts to distance himself from responsibility  
for the Colombia Presentation and the representations made to investors. In one  
example of Aziz’s attempts, he referred to the involvement of a “Jonathon” who  
worked with Garcia and Grenier in Colombia and who provided information to  
Bajaj and Aziz.  
[203] He testified that the “majority of the PowerPoint presentations was created by a  
gentleman by the name of Jonathon that worked directly with” Garcia and  
Grenier in Colombia. Aziz could not remember his last name and admitted that  
there was no email or any other record showing draft presentations, or the  
content of them, being circulated by someone of that name. Further, neither  
Bajaj nor James (who also testified about the presentations) mentioned a  
Jonathon or was asked about the involvement of someone by that name.  
[204] He submits that his testimony is corroborated by one email, sent in July of 2016  
from Victor Goncalves (President and CEO of Threegold) to Grenier seeking  
information, which Grenier forwarded to “[email protected]”.  
However, we have no basis to conclude that the addressee of that email is the  
same person Aziz refers to, and we have no information about that person’s role.  
Aziz’s testimony on this point is unsupported by any documentary evidence, and  
is inconsistent with Bajaj’s own admission that Bajaj was primarily responsible  
for the presentations. We reject Aziz’s testimony.  
[205] Aziz also disputes Staff’s allegations about the degree to which he participated in  
the seminars in the Richmond Hill office. We do accept Aziz’s testimony that he  
was less prominent than Bajaj, and that he attended fewer seminars than Bajaj.  
[206] However, we accept the testimony of investor witness JN, who had a clear  
recollection of having seen Aziz at a number of seminars, and also of having had  
a conversation with Aziz in his office after one of the seminars, during which Aziz  
reassured JN about the safety of the investment. JN had no apparent motive to  
implicate Aziz, and was not specifically challenged on his testimony. Aziz’s  
counsel did cross-examine JN about from where or from whom JN obtained  
information about the investment. However, JN’s testimony in chief was specific  
about when JN saw Aziz, and what Aziz said to JN. In contrast, the  
cross-examination of JN was in general terms, and JN was not confronted  
directly about Aziz’s involvement. In fact, Aziz’s counsel did not mention Aziz’s  
name in cross-examination. We do not think JN was given a full and proper  
opportunity to rebut what Aziz now submits is JN’s admission that he relied  
exclusively on information from Bajaj. We find that JN’s testimony in chief was  
both credible and reliable.  
[207] We also reject as unreasonable Aziz’s assertion that he knew nothing about what  
was being said to investors at the seminars. That assertion is inconsistent with  
the documentary evidence showing that Aziz reviewed and approved the  
Colombia Presentation.  
[208] We cannot accept Aziz’s submission that the investors were told exactly where  
their money would go, i.e., to the Colombia projects, including the coal mine. To  
the extent that his submission suggests that the representations alerted  
investors that funds would go to the coal mine, that submission is  
unsubstantiated. Aziz also submits that he reasonably understood that investors  
were told about the coal mine before funds raised were put to that use, but  
again he offers no basis for that understanding. We disagree with his assertion.  
[209] In summary, it is more likely than not that most investors were told (whether  
through the Colombia Presentation or otherwise) that their funds would be used  
for bitumen and biodiesel projects in Colombia. There was no explicit  
representation that funds would be used for a coal mine or the deployment of  
First Global technology, and the only representation relating to how First Global  
might use funds was the reference to general working capital in the subscription  
Intended flow of funds through First Global  
[210] We now turn to examine the parties’ intentions about the flow of funds, as  
distinct from the intended ultimate uses. Consistent with other aspects of this  
case, we conclude that the parties did not at the time and do not now share an  
understanding of how the raised funds were to flow.  
[211] First Global was obligated to pay its debenture holders interest at 14% per year.  
Bajaj testified that First Global was to lend the raised funds to GBR Colombia at  
an interest rate of 16% per year. Payment of this interest from GBR Colombia to  
First Global would enable First Global to pay the 14% per year due to First Global  
debenture holders. First Global would retain the additional 2%, and according to  
Bajaj, this constituted the entirety of First Global’s entitlement to a portion of the  
funds raised.  
[212] Bajaj stated that he had an oral commitment with Aziz to the above effect from  
the beginning of the Solicitation Period. As Bajaj points out, these terms were  
reflected in one of the GBR Colombia board resolutions signed in October 2015  
and referred to above. That resolution authorizes the use of First Global to raise  
funds, which activity of course had already been underway for some time. The  
resolution authorizes Bajaj to allocate the funds raised as follows:  
70% to GBR Colombia;  
14% kept “for interest purposes”;  
2% to First Global; and  
a total of 14% for referral fees and office expenses for the “Canadian  
[213] On its face, that resolution corroborates Bajaj’s testimony that First Global was  
to receive only 2% of funds raised. Aziz offers a different perspective, testifying  
that First Global was to retain the 2% spread between the 14% and 16%  
interest rates, plus an additional approximately 20% of the funds as working  
capital in order to fund its operations. He says that the percentages contained in  
the resolution, as set out above, applied only after First Global had first taken its  
approximately 20% for working capital.  
[214] That contention is directly contradicted by the wording of the resolution, which  
expressly provides that each of the above percentages was a portion of the  
raised funds (e.g., “2% of raised fund [sic] will be paid to FGD”), not of an  
amount net of a working capital allocation to First Global.  
[215] Aziz says that the additional amount to be retained by First Global was the  
subject of discussion, and that while never specified precisely, it was  
approximately 20%-30% to a maximum of $1.5 million. He asserts that this was  
the subject of an oral agreement but never recorded in in any documents signed  
on behalf of GBR Colombia. Despite Aziz’s imprecision, he says that First Global  
exceeded its entitlement when it retained $1.5 million of the $4.46 million that  
was raised (or approximately 34%).  
[216] Itwaru gave similar testimony about the nature of the arrangement, stating that  
First Global was entitled to retain more than the 2% spread. However, he  
conceded that while he understood GBR Colombia would use some of the funds  
for its own purposes, he was unaware of any agreement as to the allocation,  
between First Global and GBR Colombia, of the balance of the funds raised.  
[217] Alli was equally uncertain about when First Global could lend funds to GBR  
Colombia and in what amounts those loans could be. He also stated the  
following, although he acknowledged that these terms were not documented:  
First Global was to receive $1.5 million by September 2015, although this  
timing was a point of contention among the parties at the time, since First  
Global took these funds in the early stages of fundraising, rather than  
taking a proportionate share of each amount invested as it came in; and  
another $4.5 million was to be raised by the following month.  
[218] Bajaj denies that there was any arrangement for First Global to retain more than  
the 2% contemplated by the resolution referred to above, and he denies that  
Aziz ever told him that there was any arrangement for more than 2%.  
[219] In his submissions, Aziz is rightly skeptical that First Global would enter into such  
an arrangement. We agree with his submission that the terms described, which  
would give First Global a mere $88,000 to take on approximately $4.4 million in  
debt, make little commercial sense. As Itwaru observed, the company spent  
approximately that amount just on legal fees to structure the transactions.  
[220] There is no answer that perfectly reconciles the oral testimony and documentary  
evidence on that point. As Aziz submits, the agreement that Bajaj describes  
makes little commercial sense, but the resolution that the two of them signed  
(along with Garcia and Thiviyanayagam) is clear. It specifies unambiguously that  
First Global was to receive only 2% of funds raised. Aziz offered no persuasive  
explanation as to why there was a supposed oral agreement that would override  
the written resolution, with significantly different terms.  
[221] The conflicting evidence and the recurring assertions of oral agreements that  
supersede written agreements reinforce our conclusion that even the parties  
themselves did not share a common understanding of the relationships among  
the various entities and how the raised funds were to be used. In light of this  
fact, it is unsurprising, as we turn to examine the actual use of funds, to see that  
funds were not used as represented to investors.  
Actual use of funds  
[222] Staff’s analysis of how the funds raised were used was not seriously challenged.  
As we explain below, First Global retained $1.51 million of the $4.46 million  
raised, and only a small portion of the remaining $2.95 million went to GBR  
Colombia, although not to any bitumen or biodiesel assets that it owned.  
[223] The flow begins with funds raised through the sale of First Global debentures  
being deposited into the trust account of First Global’s lawyer. According to the  
First Global-GBR Debenture Agreement, the funds were then to go to GBR  
Colombia for the deployment of First Global services. Transfers of funds took  
place directly or indirectly through First Global, although to various entities other  
than GBR Colombia, as we explain below. The transfers were reflected in  
promissory notes, which documented GBR Colombia’s obligation to repay the  
funds to First Global with interest at 16% per year.  
[224] As it turned out, First Global received no payments of principal or interest from  
GBR Colombia as required by the promissory notes, but continued to advance  
funds to or for the benefit of GBR Colombia. First Global ultimately wrote off its  
receivables in respect of the promissory notes.  
[225] The approximately $4.46 million raised was split between First Global and other  
entities, as summarized here:  
as noted above, First Global retained approximately $1.51 million; and  
the remaining $2.95 million was provided to or for the benefit of GBR  
Colombia, although not for bitumen mining or biodiesel operations owned  
by GBR Colombia:  
$1.91 million was transferred to Bioclean Inc., a Canadian company  
owned as to 74% by Garcia;  
$957,000 was transferred to Threegold; and  
$77,000 was transferred to GBR Ontario.  
[226] We explain these amounts further below.  
5.4.2.e.ii First Global retained $1.5 million  
[227] The first use was by First Global itself, which kept approximately $1.51 million.  
First Global made only limited efforts toward deploying its technology in  
Colombia (i.e., a few conversations involving one or more of Itwaru, Alli, Aziz  
and Grenier), and none of the $1.51 million was used to support those efforts.  
This “failure to launch” in 2015 was corroborated by Aziz, Alli and Itwaru. Aziz  
testified that First Global did launch a mobile payment platform in Colombia in  
2016 or 2017, but neither he nor any other party or witness provided any further  
details or established any connection between that launch and the funds raised  
through the sale of First Global debentures.  
[228] In any event, Aziz testified that Grenier, Garcia and Faille thought that First  
Global had kept more than its share by retaining $1.51 million. This eroded the  
trust between Grenier and Garcia on the one hand and First Global on the other,  
eventually resulting in a December 29, 2015, termination of the First Global-GBR  
Debenture Agreement.  
$2.95 million was provided to or for the benefit of GBR Colombia  
[229] The remaining $2.95 million was disbursed to Bioclean, Threegold and GBR  
Ontario, ostensibly to or for the benefit of GBR Colombia, but as it turned out,  
not actually for bitumen mining or biodiesel operations owned by GBR Colombia  
itself as opposed to other projects or other entities in which GBR Colombia had  
no interest.  
[230] The $2.95 million was used as follows:  
Coal mine $1 million was used to acquire or develop the Hoyo Patia coal  
mine, 80% of which was owned by AM Resources, a company wholly  
owned by Garcia indirectly through A&M USA Resources 2015 LLC  
(Garcia’s US company). The allocation of $1 million to the coal mine  
was reflected in a GBR Colombia board resolution signed in October 2015.  
The allocation was ostensibly done because none of the other assets were  
generating revenue, and it was necessary to have an asset that was  
producing, in order to fund the interest payments to First Global  
debenture holders (although no such interest payments were ever made).  
In closing submissions, Bajaj asserts that he told investors that the coal  
mine was being added to the project in order to pay interest on time.  
However, his testimony does not fully support that submission, and we  
cannot accept it, given that:  
he testified only that he told investors “about the coal mine”,  
without specifying at all (or therefore being cross-examined on)  
what he told them about the mine;  
in his testimony, he did not mention interest payments;  
neither the Colombia Presentation nor the marketing brochure  
contained any reference to a coal mine; and  
the investorstestimony, which we accept, contradicts Bajaj’s  
Referral fees $309,000 was used to pay referral fees, including  
$114,000 paid to Bajaj himself via his company UnfoldU Inc., and  
$195,000 paid to other individuals.  
Interest on debentures $301,000 was used for interest payments on the  
First Global debentures, and on the loans from EH (described at  
paragraph [61] above and discussed further below). In other words, funds  
raised from new investors were used to pay interest obligations to earlier  
investors. Bajaj and Aziz admitted that this was the arrangement, and  
testified that this was done in consultation with Steven Roch, a lawyer in  
the Montreal law firm of Colby Monet, lawyers for GBR Colombia.  
GBR Ontario’s business expenses Over $300,000 was used to pay  
business-related expenses incurred by GBR Ontario, including $90,000 for  
the Richmond Hill Office lease.  
Transfer to a subsidiary of Bioclean $300,000 was transferred to  
Biominerales, a wholly-owned subsidiary of Bioclean, and the holder of a  
60% interest in Asfaltitas, which in turn wholly owned:  
the La Esperanza bitumen mine; and  
a biodiesel production facility in Bogotá.  
Threegold’s business expenses $185,000 was used to pay  
business-related expenses incurred by Threegold.  
Payment to Garcia’s US company In January 2016, $150,000 flowed  
through Threegold to Garcia’s US company, purportedly to satisfy the  
condition reflected in an October 2015 letter from Roch as attorney for  
GBR Colombia, addressed to GBR Ontario, providing that acquisition of the  
biodiesel production plant was conditional on the repayment of a  
$150,000 loan, plus charges and costs. As we explain further below at  
paragraph [314], the loan to be repaid was to Rob Mattachione, an  
individual who had worked with Bajaj and Aziz in the past, and who  
apparently was a “former principal” of the business that owned the plant,  
although whether there was a debt to him is in dispute;  
Bajaj’s expenses In addition to the referral fees paid directly to Bajaj  
and mentioned above, $141,000 of additional payments were made to  
Bajaj’s company UnfoldU Inc., purportedly for expense reimbursement to  
Further payment to Bajaj $100,000 was transferred to 2329520 Ontario  
Inc., a Bajaj-controlled corporation, to pay referral fees and interest  
Payment to GBR Ontario $78,000 was transferred to GBR Ontario.  
Payment to CIV Carbon Credit Ltd. $55,000 was paid to CIV Carbon  
Credit Ltd., a company that entered into transactions with Grenier and  
Garcia, but no witness could explain why First Global debenture funds  
would be used for this purpose.  
Conclusion about actual use of funds compared to promised use of  
[231] Staff makes no submission that the $1.51 million kept by First Global  
represented a departure from the representations contained in the First Global  
subscription documents, which contemplated that the funds would be used for  
First Global’s general working capital. We had no evidence about how First Global  
used the $1.51 million. Instead, Staff submits that the misalignment was  
between the representations made by the GBR Ontario Parties directly to  
investors, since those representations did not contemplate First Global retaining  
[232] Staff submits that the same applies to the remaining $2.95 million, none of  
which was used as represented. We note the possible exception of the $150,000  
that flowed through Threegold to Garcia’s US company, ostensibly to satisfy the  
condition associated with the biodiesel production plant (see paragraph [314]  
[233] Returning to the representations made in the First Global subscription  
documents, Staff submits, and we agree, that the uses to which the $2.95  
million was put cannot be described as “working capital” uses for First Global.  
First Global’s business (mobile technology and payment transfers) was entirely  
distinct from that of GBR Colombia (natural resource extraction and production).  
When asked for his understanding of how funds raised might be used for First  
Global’s working capital, Itwaru testified that permitted uses would be the  
normal business of the company, as well as an expansion of the company’s  
business elsewhere in the world, including as a partner of another organization.  
Itwaru did not claim that GBR Colombia’s own activities, including natural  
resource extraction and production, would fall within First Global’s working  
capital. As Alli aptly put it in his submissions, “We were not going into the mining  
[234] In summary, we conclude that it is more likely than not that of the $4.46 million  
raised, none of it (with the exception of the $150,000 associated with the  
biodiesel production plant) was used in a manner that conformed to the  
representations that the GBR Ontario Parties made to investors by various  
means, including the Colombia Presentation, brochures, in-person seminars and  
radio advertisements.  
[235] In our analysis below of the alleged contraventions that flow from this, we  
address the question of where responsibility lies for the improper use of investor  
funds. We turn now to review the representations made to investors about  
whether the operations in Colombia were sufficient to fund the 14% annual  
return promised to First Global debenture holders.  
Colombian Operations Representations  
[236] Staff alleges that investors were told that GBR Colombia had control over  
operations related to its assets in Colombia, and that those operations would be  
sufficient to generate a 14% annual return. Staff alleges that these  
representations were untrue.  
[237] We will examine the representations, and the evidence with respect to whether  
they were true, below. Before doing so, though, we must make some comments  
about Garcia’s credibility, since her testimony and her actions figure prominently  
in the parties’ submissions and in our analysis.  
[238] The respondents, and Aziz in particular, submit that Garcia is not a credible  
witness. Staff accepts that we should approach her testimony with caution, but  
Closing Submissions of Nayeem Alli, June 28, 2021 (Alli Submissions), at 103  
correctly submits that we can choose to accept some but not all of any witness’s  
[239] While Garcia clearly had an interest in defending her position through her  
testimony even though she is not a respondent in this proceeding, we must still  
be mindful of the most reliable indicator of truth, i.e., harmony with the other  
evidence in this case.25 We will adhere to that standard.  
[240] In comparing a witness’s testimony to the documentary record or to other  
testimony, though, we must be wary about reaching unwarranted conclusions  
that would undermine a witness’s credibility, especially where a supposed  
inconsistency is not as clearly evident as a party may suggest. For example, Aziz  
submits that there is a contradiction between:  
Grenier’s February 2016 email, copied to Garcia, that said in part: “Right  
now the business with the money plan to be paid in next month… will  
generate enough money to pay interest and promess made to investor.  
[sic]”; and  
Garcia’s testimony that she and Grenier did not know that investors were  
being promised interest.  
[241] Aziz submits that Grenier’s email (which refers to the payment of interest)  
demonstrates that Garcia was not being truthful when she said that she didn’t  
know investors were receiving interest.  
[242] However, Garcia’s testimony was in the context of questions about the GBR  
Colombia MoU, which was signed in May 2015. It is entirely possible that in May  
2015, Garcia was unaware of the intended terms for investors but she later  
became aware that they had been promised interest. We do not know, but we  
disagree that this is a contradiction. With that as an example, we emphasize the  
importance of examining Garcia’s testimony (and that of other witnesses)  
carefully in light of other evidence in the record.  
[243] We turn now to consider the representations made about operations in Colombia.  
Meharchand at para 62  
Springer v Aird & Berlis LLP, 2009 15661 (ON SC) at para 14  
The representations  
[244] It is uncontroverted that the GBR Ontario Parties told potential investors that the  
Colombian operations were in production. Indeed, investors were told that they  
would receive not only the interest payments due on the debentures, but that  
they would receive royalty payments on sales as well.  
[245] The GBR Ontario Parties also produced two marketing brochures that described  
the investment as secure. One stated that:  
the biodiesel plant in Bogotá was already fully functional, and beginning  
in 2016, the company would “be able to produce” more than 2 million  
litres of biodiesel monthly;  
the investment would yield a “12% annual Secure Return”; and  
there were “Signed purchase orders”.  
[246] The other brochure, entitled “SECURE INVESTMENTS”, promised a 14% annual  
return and stated that the company was currently in production and had mineral  
[247] Aziz cautions that it is unclear at what point the bitumen and biodiesel assets  
would be sufficient to generate the 14% return. Aziz says that investors were not  
told that the Colombian assets were currently operating to that level, i.e., with  
sufficient production at the time of the representation. Instead, investors  
generally understood that the project was in an early phase, and that production  
was expected to reach that level in the future.  
[248] We cannot know what every single investor understood. Based on the evidence  
in the record, though, we cannot accept Aziz’s submission as it relates to  
investors’ entitlement to interest (as opposed to royalties). Both of the brochures  
referred to above could only have been interpreted by a reader as promising a  
“secure” 12% or 14% annual return (depending on the brochure). The Colombia  
Presentation said the same thing, promising a “100% Secured Investment with  
14% per annum fixed Returns for 3 Years”. None of those documents qualified  
the promise by saying that it was a projection, or that it would be reached some  
time in the future. The only reasonable interpretation of the brochures and the  
Colombia Presentation is that the investor would begin receiving that rate of  
interest as soon as they invested, no matter the stage of production.  
[249] In contrast to the description of interest payments, the documents did tie the  
payment of royalties to production of bitumen (“up to” $10 per ton) and/or  
biodiesel (“up to” 10 cents per litre). The promise of interest payments featured  
no such uncertainty or variability.  
[250] Because production figures prominently in investors’ entitlement to royalties, and  
in the comfort an investor might derive from the business’s ability to pay the  
promised interest, we will now review the evidence relevant to those promises.  
[251] The then-current and the future expected quantities of bitumen production were  
the primary components of representations and projections about revenue.  
Some versions of the Colombia Presentation claimed that 1,000 tons of bitumen  
were being produced monthly, and contained photographs that purported to  
show bitumen being extracted manually. Bajaj testified that this information  
came from Grenier and was about the La Esperanza mine, although he could  
offer no documentary support for that.  
[252] Garcia testified that at the time the MoU was signed in early 2015, she expected  
bitumen production to increase to 30,000 tons/month once funds were injected.  
[253] Some versions of the Colombia Presentation showed calculations based on  
expected bitumen production of 30,000 tons per month, the amount promised by  
GBR Colombia in the GBR Colombia MoU. Later versions of the presentation  
reduced that to 20,000 tons per month and contained what purported to be a  
letter of intent dated August 15, 2015, addressed to Paul James at GBR  
Colombia, from the VP of World Sales at Palmyra Petroleum Co. Inc., indicating  
that Palmyra was “ready and willing to order 20 000 tons” of bitumen monthly.  
The letter, which Grenier had provided to the GBR Ontario Parties, later proved  
to have been a forgery.  
[254] It is unclear who forged the letter, but in any event, Staff correctly submits that  
we need not decide that question. In our view, it is the use that the GBR Ontario  
Parties made of the letter that is relevant. Even if they believed it to be  
legitimate at the time (and there is no evidence that they doubted its  
authenticity), they did not take even basic steps to confirm the validity of what  
appeared to be a significant potential source of revenue.  
[255] The basis for overall production and revenue estimates suffered another,  
unrelated setback. At one point, Bajaj received what he described as a “shocking  
call” from Grenier. In that call, Grenier told Bajaj to stop including the La  
Esperanza mine in presentations to investors or talking to investors about the  
mine, since it belonged not to GBR Colombia but to Mattachione, the purported  
“former principal” of the biodiesel facility, as referred to in paragraph [230]g  
[256] After Grenier told Bajaj to stop including La Esperanza in the presentations, Bajaj  
substituted photographs of the biodiesel facility. He added revenue and return  
projections based on scenarios that contemplated biodiesel production ranging  
from 500,000 litres per month to 4 million litres per month. A scenario involving  
2 million litres per month was highlighted. Bajaj testified that he received these  
numbers from Grenier, but he could not recall whether he received any  
documentary support for them.  
[257] At the hearing before us, in support of the contention that the assets were  
generating enough revenue to pay interest to investors, Aziz submits that  
Grenier consistently gave reassurance to that effect. Aziz also points to Garcia’s  
testimony that in February of 2016 there were potential coal sales that would  
generate $100,000 per month in revenue, and $50,000 per month of revenue  
from biodiesel. Whether those figures were reliable or not, we note that there  
was no reasonable basis to assume that First Global debenture holders would  
benefit from sales of coal (as opposed to bitumen or biodiesel).  
[258] With respect to the potential for generating revenue from bitumen, Bajaj  
similarly sought comfort in unverified projections. He submits that Garcia and  
Grenier said they had a mineral reserve in the Rio Negro mine of approximately  
1.26 million tons. The portion of the geologist’s report excerpted in the Colombia  
Presentation suggested a possible inference of 1.1 million tons, but that the work  
plan for the mine contemplated the existence of 1.26 million tons. One need not  
be a mining expert to distinguish between an established reserve and a possible  
inference. The possible inference here ought to have offered little if any comfort.  
[259] Bajaj says that he did research and calculated that the per ton price at 90%  
purity would range from $1,000 to $1,400. His research appears to have been  
limited to a simple search for the term “gilsonite price” on the website of a global  
and generic marketplace that is for all types of products and is not specific to  
natural resources. We heard no evidence about the reliability of such a source, or  
more importantly whether Bajaj had any reasonable basis to adopt that range as  
a benchmark against which to compare Grenier’s estimates.  
[260] According to Bajaj, Grenier advised that the bitumen was 82% pure, the price of  
which would be at least $500 per ton, yielding a reserve value of approximately  
$630 million. This information was reflected in the Colombia Presentation, which  
represented a net asset value of $441 million after deducting production costs of  
$189 million.  
[261] The Colombia Presentation juxtaposed the supposed $441 million net asset value  
of the bitumen reserve against the $12 million amount of the first tranche of  
First Global debentures, purportedly to demonstrate that investment in the  
debentures would be fully secured.  
[262] The Colombia Presentation then combined the projected $84 million annual  
revenue from the bitumen operations (based on a production estimate of 20,000  
tons per month) with the projected $12 million annual revenue from the  
biodiesel operations to project a total annual revenue of $96 million.  
Actual production  
[263] The optimistic and largely unfounded projections stand in stark contrast to what  
appears to have been the reality in mid-2015 and beyond. For example, emails  
from Grenier in June and July specified that there was no production at Rio  
[264] There is no evidence that there was ever any bitumen production at any facility  
other than the mine that Grenier advised in the summer of 2015 was not one of  
the assets that would be transferred to GBR Colombia (i.e., La Esperanza).  
[265] As for biodiesel, we heard reference to two different facilities. Some evidence  
related to a smaller existing plant that was producing although in limited  
quantities. Other evidence referred to Garcia and Grenier’s intention to establish  
a bigger plant in a different location, and their need for funds to undertake that  
expansion and move.  
[266] There is no evidence that biodiesel was ever produced or could be produced at  
the bigger facility. Doing so would require a licence for the use of methanol, a  
highly controlled substance in Colombia that is a necessary catalyst in the  
production process. Such a licence was still outstanding as late as March 2016.  
Understandably, we had no evidence of any biodiesel sales to customers.  
Conclusion about the truthfulness of the Colombian Operations  
[267] Once again, there were some inconsistencies in the various representations  
made to investors. Some investors may have understood when they invested  
that the facilities were not yet producing (and therefore selling) enough product  
to generate the necessary funds to pay interest on the debentures, but that that  
goal would be attained within a reasonable time. Others would not have had that  
understanding, especially in light of the categorically positive representations in  
the Colombia Presentation and the brochures.  
[268] The representations about generating funds to pay interest do not mean that  
each dollar of revenue (or profit) must flow directly to debenture holders. As we  
discussed above, First Global bore the obligation to pay interest on the  
debentures, no matter what the level of production of the Colombian assets.  
Having said that, the ability of the Colombian operations to generate revenue  
was important, since investors would reasonably derive comfort from that in  
assessing the risk of losing their investment.  
[269] In that regard, the Colombian Operations Representations materially misstated  
the extent to which the operations were, or would imminently, be able to provide  
that sense of security.  
Security Representations  
[270] We turn now to Staff’s allegations that it was represented to investors that the  
First Global debentures would be fully guaranteed and secured by assets owned