Shareholder Disputes & Civil Matters

The BC Securities Commission enforces the Securities Act and related regulations.  Our mandate does not include other laws, or matters that are not connected to securities and British Columbia.

That means we investigate complaints and tips about possible breaches of the Securities Act and can act against wrongdoing in the British Columbia investment markets that involves:

• what companies say, when and after they raise money (“disclosure”),
• people who recommend or buy and sell shares and other securities for investors (“registrants”), or
• fraud, illegal insider trading, market manipulation, and illegal sales (such as selling securities without a prospectus or exemption)

as well as similar activities. (For more information about when a distribution of securities may be connected to British Columbia, see BC Interpretation Note 72-702 Distribution of Securities to Persons Outside British Columbia). 

However, we do not enforce the Business Corporations Act or other company laws, and we do not regulate how companies carry on business that is not related to trading securities, registration, or disclosure.  

We will share information about those kinds of misconduct with other regulators and law enforcement, including in other jurisdictions, when appropriate.

I am a shareholder in a company that I think has done wrong to me

A main goal of securities law is making sure that people have the information they need to make good investment decisions.

When an investor buys shares, they not only get a security they can hold and may later sell, they become a part owner of the company and may get a say in how it operates.  

Those rights come from corporate law, though, not securities law.  Likewise, the duties owed by a company’s management to the company (and, indirectly, to its shareholders) are often part of corporate law outside the mandate of the BC Securities Commission.

The company that I am a shareholder in is not a public company

Private companies are those whose shares and other securities are not listed on a stock exchange.  They raise money through the private placement market, and do not have to give investors a prospectus or the ongoing disclosure that is required from public companies (which are “reporting issuers”).

While a private company must tell investors the truth, and may file certain reports with the BC Securities Commission, securities laws do not otherwise require such a company to provide updates or follow many other rules.

So, although corporate law may still require a private company to:

• provide some disclosure to its shareholders, such as financial statements, 
• issue share certificates , or
• hold annual or special meetings,

those matters are beyond the authority of the BC Securities Commission.  

Instead, shareholders in such cases can enforce their rights in civil court.  As we cannot assist you with such proceedings, you should consider seeking professional legal advice about your options. 

(While the BC Securities Commission cannot require a company to issue share certificates, a company may have been required to file a “Report of Exempt Distribution” (Form 45-106F1) when it sold shares. If you do not see such a form filed for the company on SEDAR+, please do report it to the BC Securities Commission at: https://www.bcsc.bc.ca/report-to-us)

I think the company I am a shareholder of is being mismanaged

Unlike private companies, public companies must make ongoing disclosure under securities law.  The BC Securities Commission will act against such “reporting issuers” that fail to make required disclosure, including about their board of directors’ practices and composition.  

We will also enforce the securities laws that make rules for reporting issuers' audit committees and communication about shareholder meetings, such as sending proxies and information circulars.  For more information, see the following decision: Re Jacob Cohen, 2023 BCSECCOM 317

However, the BC Securities Commission does not oversee other matters of a company’s management (“corporate governance”) that are from corporate law.  We do not approve:

• private placements that properly qualify for an exemption,
• plans of arrangement,
• the valuation or fairness to shareholders of other transactions,
• the calling of shareholder meetings and the conduct of those meetings,
• management’s compliance with how shareholders have voted, or
• the duty of the board of directors and the officers to act in the best interests of the company.

If a company, public or private, is seeking to act in a way that could hurt its shareholders, those shareholders may be able to vote against such action or seek remedies from a civil court.  Again, as such matters are outside our power, you should decide whether to consult a lawyer about what you may be able to do under corporate law as a shareholder.

I am not a shareholder in the company that I think has done wrong to me

Even if you do not own its securities, a company may owe you duties, for example, under a contract, as a consumer, or because you are a member of a community.

That can raise important issues, but they are outside the scope of the Securities Act, even if a public company is involved.

Accordingly, the BC Securities Commission does not have authority to help you if you believe that:

• you are owed money for services you provided,
• your shareholder agreement has been breached, or
• you have been mistreated as a customer.

In such cases, you can instead think about contacting the Director of Employment Standards, Consumer Protection BC, or other regulators, or going to civil courts, including the Civil Resolution Tribunal (for disputes up to $5,000) and Small Claims Court (for disputes up to $35,000).