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Tiffin doubt: Just what is a 'security'?


Lawyer Neill May
Area Corporate Finance and Securities


Article originally published in the Canadian Lawyer Magazine, May 2017

Excerpt from "Tiffin doubt: Just what is a 'security'?":

Still, despite the unneeded complexity it adds to my notional social life, the uncertainty as to what constitutes a “security” endures, as reflected in the recent decision of the Ontario Court of Justice in Ontario Securities v. Tiffin. In that case, six parties agreed to advance an aggregate of $700,000 to Tiffin Financial Corporation, a company wholly owned and controlled by Daniel Tiffin, pursuant to interest-bearing promissory notes. Tiffin was at the time subject to a cease trade order issued by the Ontario Securities Commission, as a result of prior proceedings relating to an issuance of promissory notes by another company, which prohibited both TFC and Tiffin from trading in securities or relying upon exemptions under Ontario securities laws (and imposed financial penalties). TFC’s notes, though, made reference to a reliance on the accredited investor exemption (an exemption from the requirement to issue a prospectus in connection with a distribution of securities). The funds advanced were said to be for Tiffin’s personal use and to keep TFC operating.

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