Canada Jetlines and its former executive chairman have together paid $100,000 to the B.C. Securities Commission (BCSC) for failing to disclose material information.
In a news release Friday, the BCSC said Mark Morabito, then executive chairman and director of Canada Jetlines Ltd., contravened securities law by not immediately disclosing a delay in the airline’s startup operations. At the time, Canada Jetlines was federally registered in B.C. The airline has since been restructured under new management and is now incorporated in Delaware as Global Crossing Airlines Group Inc.
In September 2017, Canada Jetlines told investors it had signed a letter of intent to lease two aircraft, with delivery planned for April 2018. The airline also said it aimed to begin flight operations in summer 2018.
However, the aircraft vendor terminated the deal in December 2017, and two months later, the company informed the Canada Transportation Agency that its operations would be delayed until the end of 2018. The delay, considered a “material change” under securities law, was not disclosed publicly until March 13, 2018.
“A material change is something that would reasonably be expected to have a significant effect on the market price or value of a company’s shares,” the BCSC said in its release. By failing to immediately disclose the information, Jetlines breached continuous disclosure rules under B.C.’s Securities Act. The commission said Morabito “authorized, permitted, or acquiesced” in the violation.
The BCSC added that it is committed to ensuring investors have timely access to information. “We strive to maintain a market that is honest, fair, competitive, and dynamic, enabling British Columbians to thrive,” the commission stated.
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