H. Lorne Morphy, Q.C.

Staff of the Ontario Securities Commission alleged that the respondents, K.Y. Ho and Betty Ho, engaged in insider trading contrary to subsection 76(1) of the Securities Act by disposing of ATI shares prior to a public announcement that ATI would fall short of its forecasted revenue and earnings for Q3-2000.

The Commission dismissed the allegations, finding that Staff failed to establish that the revenue shortfall was a known fact at the time the shares were disposed of, and consequently, the respondents could not have had actual knowledge of it.

Furthermore, the Commission held that K.Y. Ho's charitable donations of shares were gifts made in good faith and did not constitute 'sales' for the purposes of the insider trading provisions.

The applicant, Kwok Yuen Ho, brought a motion for an order requiring Staff of the Ontario Securities Commission to produce the working file of the investigator responsible for the insider trading investigation against him.

The applicant argued that the file was necessary to make full answer and defence, as the investigator would be a key witness at the hearing.

The Commission dismissed the motion, distinguishing between evidence obtained during an investigation (which must be disclosed) and materials created by an investigator (which need not be disclosed unless the investigator is giving expert opinion evidence).

As the investigator was only being called as a fact witness, the working file was deemed irrelevant and not subject to disclosure.