A B.C.-based airline and its former executive chairman have reached a settlement agreement in the form of a $100,000 voluntary payment to the B.C. Securities Commission for failing to disclose information.
Canada Jetlines Ltd. was a startup ultra-low-cost airline, with Mark Morabito, a B.C. resident, serving as a director and executive chairman, according to an Aug. 8 settlement agreement.
In September 2017, Canada Jetlines announced a letter of intent (LOI) to lease two aircraft, with plans to begin ticket sales in spring 2018 and flight operations by summer 2018.
But on Dec. 12, 2017, the aircraft vendor terminated the LOI, inevitably delaying the airline's operational launch. That action constituted a material change — a piece of information that could have a significant effect on the market price or value of a company’s shares, said the Securities Commission in a statement.
The fledgling airline notified the Canada Transportation Agency on Feb. 22, 2018, that it aimed to commence operations at the end of 2018. But the information was not made public until Canada Jetlines issued a news release on March 13, 2018, the agreement says.
By failing to immediately disclose the material change to the public, the company and Morabito — who authorized, permitted, or acquiesced in Canada Jetlines’ contravention — were found to have breached the Securities Act’s continuous disclosure requirements.
In addition to the $100,000 payment to the B.C. Securities Commission, Morabito and Canada Jetlines waived their rights to any further hearings or appeals related to this settlement.
Canada Jetlines had faced a number of hurdles over the years, from financing struggles to a number of operational shifts, including changing its plan to fly out of Abbotsford International Airport, and instead returning to its original intention to fly out of Vancouver International Airport.
The company completed a reverse takeover in June 2020, changing its name to Global Crossing Airlines Group Inc. and re-domiciling to Delaware under new management.
