Airline that now flies ICE deportees fined $100K by B.C. Securities Commission

A Canada Jetlines Airbus A320 jet pulls up to the Calgary airport gate on the airline's inaugural flight at Calgary, Alta., Thursday, Sept. 22, 2022. THE CANADIAN PRESS/Larry MacDougal

An airline that began as an ultra-low-cost carrier in Canada before merging with a charter airline that operates deportation flights for U.S. Immigration and Customs Enforcement has been fined $100,000 by the B.C. Securities Commission for failing to disclose material information.

The settlement agreement reached Monday is between Global Crossing Airlines Group Inc., known as GlobalX, and B.C.’s investing regulator, however the misconduct it addresses stems from when the airline was known as Canada Jetlines Ltd. and had a different management team and board of directors.

Specifically, the BCSC ordered the former chairman and executive director of Canada Jetlines, Mark Morabito, and the company to pay $100,000 for failing to disclose material information, in contravention of the Securities Act.

At the time, Canada Jetlines was a federal company registered in B.C., operating as a start-up ultra-low-cost carrier, according to the BCSC. The airline issued a news release in September of 2017 announcing it had entered a letter of intent to lease two aircraft, with delivery expected in April 2018.

The company said it planned to start operating flights in the summer of 2018. However, the aircraft vendor terminated the letter of intent in December 2017. Canada Jetlines notified the Canada Transportation Agency of the change two months later, saying it instead planned to start operating at the end of 2018.

“The delay to the start of flight operations was a material change. A material change is something that would reasonably be expected to have a significant effect on the market price or value of a company’s shares,” reads a news release from the commission.

“However, this information was not made public until Canada Jetlines issued a news release on March 13, 2018.”

By not notifying investors that the airline would be launching later than previously planned, the BCSC said, Morabito and Jetlines violated section 85 of the Securities Act. The parties agreed to the $100,000 settlement as a way to resolve this violation.

In June of 2020, the BCSC notes, Jetlines Canada completed a reverse take-over transaction with Global Crossing Airlines, but continued to operate as separate companies with separate management teams and boards of directors.

The Jetlines Canada branch ultimately did not fly its first plane until September 2022, and by last summer had ceased all operations and declared bankruptcy. Morabito was executive chairman and director until December 2019, and currently works as an executive for two mining companies.

Meanwhile, GlobalX has gone on to operate chartered flights for professional sports teams including Lionel Messi’s Inter Miami, as reported by the New York Times, along with more than half of ICE deportation flights.

Though the BCSC settlement addresses misconduct that occurred before Global Crossing Airlines was founded, its current president Ryan Goepel is a signatory, and the regulator refers to GlobalX as “formerly known as Canada Jetlines.”