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The Canadian Securities Exchange has been publishing personal information of investors on its website for 15 years, including home addresses and amounts of their investments, a practice one shareholder rights advocate calls a “disturbing” breach of privacy.

The CSE, a small stock exchange that’s raised its profile by becoming the go-to listing spot for many cannabis companies, has had an internal rule in place since 2003 that requires it to publish data on its website for all private placement transactions. The result is that thousands of names, complete addresses and details on the value and price of each investment is posted on what’s known as a Form 9. There were 5,845 such forms publicly available on the CSE’s website on Aug. 3.

The CSE disclosures raise personal privacy concerns, said Frank Allen, executive director of FAIR Canada, an investor rights group.

“The extent of personal investor information required by the CSE’s Form 9 is disturbing and in our view goes beyond the level of information necessary for the CSE to discharge its private placement regulatory mandate,” Allen said in an email, noting that the parallel disclosure form required under Canadian securities laws keeps investors’ personal information confidential.

130 Names

In one recent example, a June 22 private placement by Chemistree Technology Inc., more than 130 names, addresses and amounts invested were published on the site. The investments in the Vancouver-based pot company ranged from 10,000 to 425,000 shares, at 35 cents each. Under a private placement, shares are sold directly to investors rather than through a public offering.

The policy has been an annoyance for some. Tarik Elsaghir, president of Cedar Point Capital Inc., a family office in Calgary, said he’s received unsolicited pitches on other stocks from people who got his firm’s information off the CSE’s website. A Form 9 filed on June 15 shows Cedar Point bought 500,000 shares of Tidal Royalty Corp. at 33 cents a share. Tidal and Chemistree didn’t return calls seeking comment.

“People start cold-calling you and soliciting you on other products and other deals and you can tell they got it” from the CSE, he said in a phone interview. “What is the purpose of this and why do they have to publish everything? It might be too much information.”

Individual buyers in these private placements tend to be wealthy, getting “accredited” investor exemptions, meaning they have personal financial assets of more than C$1 million or income of at least C$200,000.

Even celebrities sometimes show up in the filings. Los Angeles Kings defenceman Dion Phaneuf of the National Hockey League, who has also played for Toronto, Ottawa and Calgary, bought 500,000 shares of Tidal Royalty for an investment of C$165,000, according to a CSE filing. Tidal provides commercial financing services to cannabis companies. Phaneuf didn’t respond to a request for comment through his agent.

TSX Differs

The Toronto Stock Exchange and TSX Venture Exchange, both owned by TMX Group Ltd., don’t publish the personal data of investors. In separate rules for private placements, Canadian securities regulators stipulate that they will collect but won’t publish investors’ names and addresses.

“FAIR Canada believes it would be timely for the CSE to update and harmonize its Form 9 information requirements with these statutory disclosure requirements for private placements,” Allen said.

Richard Carleton, chief executive officer of CSE’s parent company CNSX Markets Inc., said the policy was put in place to ensure more transparency around participants in private placements.

Carleton said the Toronto-based CSE is looking to revise the rule after receiving feedback from issuer companies, exempt market dealers and investors supporting a change in the policy. The exchange plans to publish for public comment amendments that would remove the requirement for companies to disclose the names, addresses and number of shares acquired by arm’s-length investors, he said.

Privacy Concerns

The Office of the Privacy Commissioner of Canada declined to comment on the CSE specifically but noted that Canadian law generally requires organizations “to obtain consent for the collection, use or disclosure of personal information.”

Former Ontario Privacy Commissioner Ann Cavoukian said organizations that collect personal data need to be aware of the repercussions of publishing it, adding that including financial details “heightens the risk dramatically.”

“It’s always the unintended consequences of publicizing this information,” she said. “You simply don’t know how it can be used or used against you.”