Del Bianco’s appeal from an Order of the Alberta Securities Commission was dismissed by the Alberta Court of Appeal. The court found that there was sufficient evidence to support both the Commission’s finding that Del Bianco had traded in shares without being registered and the reasonableness of the sanctions imposed.
Administrative law – Stock brokers – Disciplinary proceedings – Penalties – Judicial review – Decisions reviewed – Securities Commission – Standard of review – Reasonableness simpliciter
Del Bianco v. Alberta Securities Commission,  A.J. No. 1222, Alberta Court of Appeal, October 29, 2004, Fruman and Ritter JJ.A. and Sullivan J.
Del Bianco was the director of a company called Equal Rights Legal Defence Alliance (“Equal Rights”). He was also the president, chief executive officer, director of operations and corporate secretary. A number of public investors purchased shares of Equal Rights. After a hearing, the Commission determined that Del Bianco had traded in Equal Rights shares without being registered under the Securities Act, R.S.A. 2000, c. S-4, had distributed securities of Equal Rights without filing and obtaining a receipt for a prospectus, and had acted contrary to the public interest. Various sanctions were imposed by the Commission, including a prohibition from acting as director, trading restrictions, administrative penalties and costs. Del Bianco appealed the decision of the Commission to the Alberta Court of Appeal.
The court determined that the appropriate standard of review of the Commission’s decision was one of reasonableness based upon a pragmatic and functional approach and analysis of the factors set out in Voice Construction Ltd. v. Construction & General Workers’ Union, Local 92,  1 S.C.R. 609.
Del Bianco argued that there was no evidence before the Commission that he had “caused or permitted” trading in shares of Equal Rights. The court reviewed the evidence before the Commission which indicated that Del Bianco had carried out various tasks relating to the sale of Equal Rights shares, including issuing and signing share certificates and a “shareholder’s statement”, faxing information about the purchase of Equal Rights shares to investors and providing instructions to Equal Rights’ solicitor in connection with the issuance and exchange of shares. The court found that there was ample evidence to support the Commission’s finding that Del Bianco had carried out acts in furtherance of trades in Equal Rights shares.
Del Bianco contended that the penalties imposed by the Commission were excessive. The court rejected this argument, noting that the Commission had reviewed the factors relating to penalty which it was required to consider under Re Beltco Holdings Inc. (1998), 21 O.S.C.B. 7743. The Commission had found that Del Bianco had ignored the Commission’s earlier findings of securities violations and continued to sell Equal Rights shares to investors. The Commission had properly concluded that this conduct demonstrated Del Bianco’s failure to appreciate the seriousness of his earlier actions. The Commission also examined other factors, including seriousness of the allegations, the offender’s experience in the marketplace and whether the sanctions would serve to deter the offender from further breaches. The court reviewed the evidence and noted that the violations of the securities laws by Del Bianco were flagrant, not technical, and no disclosure whatsoever was made to the Commission at any time. Based upon this evidence, the court held that the sanctions ordered by the Commission were not excessive or unreasonable.
In the result, Del Bianco’s appeal was dismissed.
To stay current with the new case law and emerging legal issues in this area, subscribe here.