OSC presses greenwashing allegations in closing arguments against Purpose Investments

More than a year after accusing one of Canada’s most prominent money managers of greenwashing, Ontario’s market watchdog has laid out its final argument that Purpose Investments Inc. and its founder, Som Seif, misled investors about its environmental, social and governance, or ESG, initiatives.

Ontario Securities Commission lawyers Robin McKechney and Alvin Qian made closing arguments on Thursday before a three-member adjudication panel of the OSC’s Capital Markets Tribunal. The tribunal, an independent division of the OSC, has held 18 days of hearings in the case, which carries the risk of multimillion-dollar fines against Purpose and career ending sanctions against Mr. Seif.

Purpose and Mr. Seif have vehemently denied the charges, calling the case politically motivated. Mr. Seif has previously said that he would refuse to accept a settlement.

The OSC first accused Purpose and Mr. Seif in September, 2025, of making 19 false or misleading statements about the amount of ESG investing practices incorporated in Purpose investment funds between 2019 and 2023. The OSC said Purpose asserted in 2019 that a majority of its funds, equalling roughly 75 per cent of its total assets under management (AUM), were already operating within its new ESG framework.

But an analysis conducted by OSC senior forensic accountant Jesse Dufour found that less than 35 per cent of the company’s assets under management were held in funds that either incorporated ESG already or were planning to incorporate ESG.

In order to arrive at the 75-per-cent figure, Mr. McKechney said Thursday that Purpose would have had to exclude certain funds from its AUM calculations.

“They could have just said 75 per cent, excluding cash funds, excluding institutional funds, excluding private assets,” he said. “They could have said that, but they didn’t.”

“And that matters. The truth matters when you are putting out sales communications to induce investors.”

The OSC’s case hinges on whether multiple statements made by Purpose and Mr. Seif that ESG had been incorporated across the company’s investment process was equivalent to saying that ESG was in every Purpose fund.

During a combative exchange with Mr. Qian while giving testimony in July, Mr. Seif insisted that “investment process does not mean investment funds.”

“I’ve been clear about this, and you listen to me say it to you,” Mr. Seif said then. “I’ve said it to you guys in all of our interviews. Whether or not you’d want to listen to it, you still continue to try to articulate that this is some admission that what we were doing in 2019 is not correct, and that is absolutely false.”

In his remarks on Thursday, Mr. McKechney referred to various other public statements made by or endorsed by Purpose or Mr. Seif that he argued gave the public the impression that ESG was part of every Purpose investment fund.

“Phrases such as ‘across our lineup, every single investment, across everything we do, across our investment process, across our entire business, across the board, and across our product lineup,’ explicitly state only one thing to the reasonable investor: Purpose incorporated ESG in all of its funds,” Mr. McKechney said.

In 2019, Purpose became one of Canada’s first large-money managers to start incorporating ESG factors into its investment decisions. At the time, Mr. Seif said Purpose was taking a different approach from traditional ESG funds that screen out particular companies for not meeting certain ethical or environmental standards.

Mr. Seif said then that Purpose could still invest in anything it felt would generate a good return, including fossil fuel producers, even if that meant a particular fund would receive a lower ESG score.

David Hausman of law firm Fasken Martineau DuMoulin LLP is representing Purpose. Mr. Seif hired veteran securities lawyer Joseph Groia of Groia & Company – known for his successful defence of former Bre-X Minerals Ltd. executive John Felderhof – to represent him personally.

Mr. Hausman began presenting his own closing argument on Thursday afternoon and will conclude on Friday morning. Mr. Groia will then present his closing statement, marking the end of the months-long proceeding.

Once the panel adjourns, it could be some time before the result is known. The tribunal targets issuing decisions within 90 days after receipt of final submissions, meaning it could take until the end of this year or early 2027 before a judgment is rendered.