The OSC's ESG case against Purpose Investments is heading for a full hearing
The OSC alleges that Purpose Investments made 19 false sales communications about how ESG factors were considered in its funds.
A procedural decision in Ontario Securities Commission v Purpose Investments Inc. on February 27, 2026, focused on how fund managers represent ESG strategies to investors. The Ontario Securities Commission alleged that Purpose Investments Inc., an investment fund manager, made 19 false sales communications about the extent to which environmental, social and governance factors were considered in Purpose's investment decisions about the funds it managed. The regulator further alleged that Som Seif, Purpose's chair, CEO and registered Ultimate Designated Person, made some of those false statements himself and also authorized, permitted, or acquiesced in Purpose's false statements.
The merits hearing begins in May. The procedural decision taken in February arose from preliminary motions before the Capital Markets Tribunal, chaired by Tim Moseley with panellists Cathy Singer and M. Cecilia Williams. Between the filing of the motion and the conclusion of the hearing, the Commission provided some limited additional disclosure.
Seif sought further disclosure across two broad categories. The first involved correspondence between the Commission and other investment fund managers subject to an earlier ESG disclosure compliance review. The tribunal found Seif had failed to demonstrate relevance. The Commission also confirmed it would not rely on industry practice, Commission staff guidance, or its compliance review in support of its case, leading Seif to withdraw the request, which the tribunal treated as having been withdrawn. Seif had also sought correspondence with other members of the Canadian Securities Administrators. The Commission confirmed no relevant correspondence of that description existed and Seif withdrew that request as well.
The second category concerned the Commission's internal documents, including memoranda, summaries, briefing notes and other non-privileged notes, covering the respondents' ESG disclosures, the distinction between what Seif described as "ESG integration" versus "ESG exclusion," and ESG disclosure in sales communications and prospectuses in the context of Staff Notices. The tribunal rejected this request, finding that internal Commission documents containing analysis, commentary or opinion from individuals not testifying as expert witnesses carried no probative value and were therefore not relevant.
Seif also sought a privilege log identifying documents withheld on grounds of privilege. He identified no authority from this Tribunal or any similar venue where such a log would be required, and the tribunal heard no persuasive reason to create that obligation. The tribunal also rejected Seif's reliance on OSC Staff Notice 15-708 Enforcement Branch Document Production Guidance, finding it arose in a different context and carried no binding authority even there.
On particulars, a December 10, 2025 letter from the Commission had already provided some clarification to Seif's counsel. At the hearing, the Commission undertook to deliver, within one week of the motion hearing, particulars specifying which of the 19 impugned statements Seif reviewed, which he edited, and for which he provided quotations. The tribunal accepted that undertaking and dismissed the balance of the particulars request, ruling the application as supplemented was sufficiently clear to define the issues, to prevent surprise, and to allow Seif to prepare for the hearing.
Separately, the Commission had also applied for a regulatory order under section 127(1) of the Act as an alternative, even if the tribunal found no contraventions. The Commission confirmed it relied on no facts beyond those supporting the contraventions allegations for this claim, and the tribunal found Seif would require no particulars of it.
Finally, in reply submissions, Seif asked that two paragraphs be struck from the application. Those paragraphs described a communication from Purpose to the Commission and a press release Purpose issued in early 2023 about its funds and ESG considerations. The tribunal declined, finding no proper basis to strike paragraphs from the application, particularly since the request had not formed part of Seif's original motion, and left the question of their relevance to the merits panel.
The tribunal dismissed Seif's motion, taking into account the Commission's submissions and its undertaking to provide certain particulars.
An earlier version of this article used a headline and tense that implied newer developments in the story. It has been updated to reflect a source document from February of 2026.
