Ontario’s Capital Markets Tribunal found that Jason Cloth and Creative Wealth Media Finance Corp. committed securities fraud by diverting investors’ money and raising more for some film projects than investors had agreed. Approximately $53.8 million earmarked for other purposes went to a real estate developer and a construction company, the panel found.
In Ontario Securities Commission v Cloth, 2026 ONCMT 34, the tribunal described the gap between one investor’s agreement and Creative Wealth’s books. The investor put US$6.57 million into a project called Pathway. His term sheet put his share at 100 per cent. The company’s database showed it had raised approximately US$14.7 million from 45 investors for that project. The investor testified that he received none of his investment back.
Creative Wealth lent money to independent film and television producers. Investors could buy a share of a loan for a particular production or lend money for a group of specified projects. The agreements restricted how Creative Wealth could use the funds and represented that the amount raised would be capped. The company agreed to return the capital with interest, making the agreements securities under Ontario law.
Creative Wealth kept money for different projects in common bank accounts. The commission’s investigators traced deposits and withdrawals during periods when they could identify what the money was for. The panel accepted that analysis as reliable and conservative. In compelled interviews, Cloth acknowledged using film financing money for a real estate investment without telling the investors.
The panel also found that Creative Wealth shifted funds between media projects. For example, US$2.42 million raised for a series intended to finance gaming went to a project called Robin Hood. It also used new money to repay earlier investors in other projects. Cloth told investigators he had redirected funds to head off lawsuits. Three investors testified to substantial losses.
Cloth alone had authority to direct transfers. The panel found that he knew how the agreements restricted the use of the money and understood that sending it elsewhere exposed investors to risks they had never agreed to take. His conduct also made Creative Wealth liable because he controlled the company and carried out the fraud through it. The panel declined to make a second finding against him as an officer or director for the same conduct.
The November 2 merits decision left sanctions and costs for a later hearing. The panel declined to put a single dollar figure on all the fraud, explaining that a reliable calculation would have to account for overlapping amounts and authorized uses, including agreed fees. It directed the parties to contact the registrar by November 16 to arrange a case management hearing to set the sanctions timetable.
Source: Ontario Securities Commission v Cloth, 2026 ONCMT 34. Read the decision on CanLII.
