H. L. Morphy

Credit Suisse First Boston Canada Inc. (CSFB) applied for a hearing and review of a decision by the hearing panel of Market Regulation Services Inc. (RS) that disqualified its counsel, Stikeman Elliott, from acting in an RS proceeding.

RS alleged that Stikeman Elliott was in a conflict of interest because it had previously advised the Toronto Stock Exchange (TSE) on the creation of RS, and was now raising defences on behalf of CSFB that attacked the very regulatory structure it helped create.

The Ontario Securities Commission upheld the disqualification, finding that Stikeman Elliott owed a subsisting duty of loyalty to RS as a former client and possessed relevant confidential information with a risk of misuse.

The Commission concluded that permitting the law firm to repudiate its own prior legal advice would undermine public confidence in the administration of justice.