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A series of media reports last week, before Aceto and Paul were ousted, suggested both had been aware of unlicensed cannabis growing at the company’s facility prior to Health Canada issuing a non-compliance order on July 3.

The scandal led to Health Canada seizing 5,200 kilograms of cannabis in early July. The company voluntarily put the sale of an additional 7,500 kilograms on hold, and has since halted sales of all its products both domestically and abroad. CannTrust’s stock price has plummeted by almost 60 per cent over the past month.

News of the formal OSC investigation prompted a flurry of activity at law firms that specialize in securities litigation.

“People are lawyering up,” said one Bay Street veteran, explaining that he was unable to comment on the investigation or its likely outcome.

The OSC’s Joint Serious Offences Team, which is handling the case, has members with experience in policing and Crown attorney work, and is brought in to pursue cases that could be prosecuted in the Ontario Court of Justice under sections of the Ontario Securities Act or the Criminal Code of Canada. Quasi-criminal offences such as fraud and insider trading carry penalties including jail terms of up to five years less a day and fines of up to $5 million for each conviction.