The Appellant was unable to show that the Ontario Securities Commission’s conclusions in overturning the decision of the Ontario District Council of the Investment Dealers Association with respect to one count against the Appellant was unreasonable; nor was it shown that the Commission failed to show appropriate deference to the findings of the District Council. The Commission did not commit any error in principle in substituting a new penalty.

26. July 2005 0

Administrative law – Stock brokers – Disciplinary proceedings – Penalties – Suspensions – Decisions of administrative tribunals – Securities Commission – Judicial review – Standard of review – Reasonableness simpliciter

Boulieris v. Investment Dealers Association. of Canada, [2005] O.J. No. 1984, Ontario Superior Court of Justice, May 11, 2005, J.D. Carnwath, J.R.R. Jennings and K.E. Swinton JJ.

The Appellant appealed a decision of the Ontario Securities Commission (the “Commission”) which set aside one part of a decision of the Ontario District Council of the Investment Dealers Association (the “District Council”) on the merits of a disciplinary complaint and substituted a new penalty for that imposed by the District Council.

The District Council found the Appellant guilty of one count of misconduct, namely trading for a client who had advised the Respondent that he was attempting to manipulate the market price of a security. However, the District Council concluded that the Appellant had not engaged in conduct unbecoming or detrimental to the public interest by knowingly acting as an agent or facilitator for a company engaged in soliciting for the purpose of selling securities while not registered to do so with the Ontario Securities Commission.

The District Council determined that a suspension would normally be ordered but noted that the Appellant had already served, in effect, a one-year suspension. The District Council ordered that the Appellant successfully rewrite the examination based on the Conduct and Practices Handbook for securities industry professionals prior to his approval to work in a registered capacity, that he pay costs of $5,000, and that he be subject to strict supervision for two years if employed by a member of the Investment Dealers Association (the “IDA”).

The IDA applied for a hearing and review by the Commission with respect to the dismissal by the District Council of count 1(a) and the penalty imposed. Pursuant to section 21.7(2) and 8 of the Securities Act, the Commission could, on a hearing and a review, confirm the decision under review or make such other decision as a commission considered proper. After a hearing, the Commission considered the Appellant’s conduct as “wilful and egregious”, finding that he wilfully facilitated a market manipulation. It held that in dismissing count 1(a), the District Council misapprehended the essential business and operational developments necessary to prove that count. The Commission then imposed a more severe penalty given its conclusion that the District Council had misapprehended the public interest.

The Appellant appealed the decision of the Commission pursuant to section 9 of the Securities Act seeking an order that the Commission’s decision be set aside and the decisions of the District Council be restored.

The standard of review on the appeal was that of reasonableness. The Court noted that the Commission exercised its original jurisdiction when exercising its power of review under the Act. However, it also stated that in practice the Commission afforded deference to the factual findings of the District Council.

The Court held that the Commission overturned the decision of the District Council with respect to count 1(a) on the basis that the District Council misapprehended the evidence required to prove that count. There was evidence to support the Commission’s decision that count 1(a) had been proven and therefore it could not be said that the Commission’s decision was unreasonable. Nor did the Commission fail to show appropriate deference to the findings of the District Council.

With respect to the penalty, the Appellant failed to show that the Commission committed any error in principle, nor could it be said that the punishment did not fit the misconduct. Given the facts, the Court held that the penalty imposed was not unreasonable. The appeal was therefore dismissed.

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