The British Columbia Securities Commission (“BCSC”) reported earlier this month that its $21.7 million disgorgement order against Michael Lathigee was recognized by a court in Nevada where Mr. Lathigee resides. Mr. Lathigee has appealed the decision.

According to the BCSC, this is the first time a U.S. court has recognized a BCSC disgorgement order. We are unaware of similar precedents for other securities regulators in Canada. It is unclear whether the BCSC will eventually be successful in collecting the funds from Mr. Lathigee and returning them to the affected investors.

Almost five years ago, the BCSC found that Mr. Lathigee and his partner had committed fraud by misapplying investor funds in companies they controlled. As a result, on July 14, 2014, the BCSC ordered Mr. Lathigee to repay $21.7 million and also imposed a $15 million administrative penalty. Mr. Lathigee was also permanently banned from trading securities in British Columbia or serving as a director or officer of any issuer.


  1. The BCSC (and perhaps other securities regulators) may pursue a respondent outside Canada to enforce a disgorgement order and return monies collected to Canadian investors who have been harmed by a respondent.
  2. Securities regulators pursuing respondents to other jurisdictions will likely limit their collection efforts to disgorgement orders. Foreign courts will generally not enforce administrative penalties ordered by a foreign regulator.
  3. Disgorgement orders are not necessarily limited to the “profit” made by a respondent from investors. Recently, in North American Financial Group Inc. v Ontario Securities Commission, Ontario’s Divisional Court held that in fraud and fraud-like cases, it is appropriate for the penalty ordered to focus on the harm to investors rather than the benefit to the respondent.