Oasis and its principals found liable for spoofing in mixed Ontario trading ruling

Ontario’s Capital Markets Tribunal has found that Oasis World Trading Inc. and two senior officers engaged in market manipulation through spoofing, while rejecting separate allegations that the firm traded without an available registration exemption and that the respondents were responsible for unlawful wash trading.

The mixed decision in Oasis World Trading Inc (Re), 2026 ONCMT 29, dated July 21, 2026, also found serious shortcomings in the Ontario firm’s supervision of hundreds of traders. The tribunal held that those shortcomings were contrary to the public interest even though a statutory supervision provision applying to registered firms did not apply to Oasis.

This was a regulatory merits ruling, not a criminal conviction or a decision fixing financial penalties. A subsequent August 25 order scheduled the sanctions and costs hearing for December 11, 2026.

A trading business operating across borders

Oasis described itself as a proprietary day-trading firm: a business trading its own capital rather than investing customers’ money. During the period at issue, more than 600 traders in roughly 52 independent offices in China placed trades through its platform on Canadian and Australian markets.

The firm’s head office was in Ontario. Its founder and chief executive, Zhen (Steven) Pang, and chief compliance and operating officer, Rikesh Modi, were its sole officers and directors. The Ontario Securities Commission’s allegations concerned activity from 2018 through 2020.

Oasis provided capital, buying limits and access to its trading software. The trading offices received a share of trading gains after deductions, but the tribunal found that Oasis—not the individual traders—owned the money and securities in its broker accounts. The trades were entered manually by people, not by an algorithmic trading system.

Why Oasis won on registration

The parties agreed that Oasis was in the business of trading securities. The dispute was whether an exemption allowed it to trade without registering itself.

The tribunal found that the exemption for trades made through an appropriately registered dealer applied. Oasis’s Canadian trades went through its registered executing broker, and the firm was not soliciting purchasers to make the trades in the way that would remove the exemption.

The OSC argued that Oasis functioned as an intermediary for the individual traders and that allowing the exemption would weaken regulatory safeguards. The tribunal rejected that characterization on the evidence: the traders were acting for Oasis, using its capital, not purchasing securities for themselves. Its software was not a platform available to the investing public.

The panel acknowledged the regulator’s policy concerns but said it could not stretch the exemption’s wording to capture activity beyond its scope. This was a conclusion about Oasis’s particular arrangements, not a general exemption for any business offering trading access.

Hundreds of spoofing sequences established

That registration result did not dispose of the market-manipulation allegations. The OSC alleged 643 instances of spoofing across the Canadian and Australian markets. In this case, the alleged pattern involved entering an order without intending to complete it, using the apparent demand or supply to obtain a better price on the opposite side of the market, and then cancelling the first order.

The tribunal found the necessary pattern in 568 trading sequences. It relied on repeated activity involving the same trader on both sides, or traders within one particular office, combined with timing, pricing and other contextual evidence. Messages about trading supervision also supported its conclusions.

The panel did not treat every cancelled order as manipulation. It accepted that cancellation can have legitimate explanations and rejected portions of the OSC’s case where the evidence did not establish that an initial order lacked a genuine intention to trade. It also declined to allow the regulator to change the pleaded theory of part of its case in closing submissions.

Pang and Modi did not have to have personally entered each offending order. All activity passed through Oasis’s accounts, and the tribunal found that their roles and responsibilities meant they knew or ought to have known the traders were spoofing. A previous 2015 settlement over monitoring failures made heightened awareness of that risk reasonable. The panel found sufficient Ontario connections to address the Australian trading as well.

Why the wash-trading allegation failed

The result was different for 10,511 wash trades that appeared on public trading records. These were trades in which Oasis was both buyer and seller, so there was no genuine change of beneficial ownership. Such trades can falsely inflate apparent market activity if they are not suppressed or cancelled.

The tribunal found that the trades occurred and created a misleading appearance. But it held that the OSC had not established that Oasis, Pang or Modi knew or ought to have known the trades were not being suppressed or cancelled.

Oasis had followed its executing broker’s instructions for coding intended to prevent those trades from appearing. Those instructions were incorrect, and a separate broker alert system also failed to identify the problem. The tribunal found that Oasis reasonably relied on the broker’s instructions and its responsibility for this particular market interface. That defeated the necessary knowledge element, rather than erasing the fact that the trades occurred.

Registration exemption did not excuse weak supervision

The tribunal nonetheless found Oasis’s broader compliance arrangements inadequate. One person at head office was effectively responsible for overseeing the high-volume activity of more than 600 traders. Local managers did not report their supervision activities, leaving head office without meaningful visibility into what they were doing.

Among other problems, Oasis reviewed fewer than 1,500 of almost 59,000 alerts in the category it had chosen to monitor, conducted no post-trade review of Australian trading in 2018 and kept inadequate records of supervision. A hard-coded preventive control was incorrectly designed. Training, follow-up and enforcement of the firm’s own compliance procedures were also deficient.

The fact that an independent monitor had helped design the system did not establish that it was adequate or being properly carried out. Nor did the broker’s own obligations remove Oasis’s responsibilities for its trading activity.

The panel applied a public-interest test asking whether the conduct substantially undermined principles underlying securities law and had a public effect warranting intervention. It found those requirements met because deficient oversight exposed other investors to improper trading risks. This finding was against Oasis alone; the tribunal declined to make the same public-interest finding against Pang and Modi without submissions addressing their separate responsibility.

Finally, Oasis breached rules governing direct electronic access by giving traders access before promptly identifying them to its broker. Pang and Modi were also held responsible for that breach. These findings, together with the spoofing result, remained for the sanctions stage; the merits ruling itself imposed no quantified penalty.