Charles Corlett

The appellants appealed the Ontario Securities Commission's (OSC) decisions on the merits and sanctions regarding their conduct in the investment industry.

The Divisional Court held that the standard of review for the OSC's decisions is reasonableness, except for procedural fairness.

The court found that the OSC reasonably excluded fresh evidence, reasonably upheld the Investment Industry Regulatory Organization of Canada's (IIROC) findings on the merits, and conducted a procedurally fair fresh sanctions hearing.

The appeal was dismissed.

IIROC Staff applied for a hearing and review of an IIROC Hearing Panel decision that dismissed allegations against TD Securities Inc. (TDSI) for failing to comply with its trading supervision obligations.

The IIROC Hearing Panel had found that several TDSI traders entered artificial closing bids but concluded that TDSI's supervisory system was adequate.

On review, the Ontario Securities Commission found that the IIROC Hearing Panel did not overlook or misapprehend material evidence, nor did it err in law or proceed on an incorrect principle.

The Commission deferred to the IIROC Hearing Panel's factual determinations and its assessment of the adequacy of TDSI's multi-tiered supervisory system.

The application was dismissed.

The applicant, a small investment firm, sought a hearing and review of an IIROC Hearing Panel decision that imposed a $100,000 fine and $10,000 in costs for breaches of Universal Market Integrity Rules (UMIR) 5.2 and 7.1.

The applicant argued the penalty was unreasonable and disproportionate.

The Ontario Securities Commission found that the IIROC Hearing Panel erred in principle by failing to apply the principle of proportionality, as the $100,000 fine was disproportionate to the firm's small size and limited regulatory capital.

The Commission substituted its own decision, reducing the fine to $30,000 while maintaining the $10,000 costs order.

Questrade Inc. applied for a hearing and review of a decision by the IIROC District Council, which found that Questrade failed to comply with regulatory margin requirements for its online foreign exchange trading business and that its conduct was unbecoming a Member Firm.

The Ontario Securities Commission applied a restrained approach, according deference to the District Council's expertise.

The Commission found no error in law or incorrect principle in the District Council's conclusions that Spot FX contracts are not exempt from margin requirements and that Questrade's deliberate refusal to follow IDA directions constituted conduct unbecoming.

The application was dismissed.

TSX Inc. sought intervenor status in a hearing and review requested by the respondent regarding a decision of Market Regulation Services Inc. (RS).

The respondent had challenged the validity of the Universal Market Integrity Rules (UMIR) and the TSX's delegation of market regulation to RS.

The Commission granted TSX limited intervenor status, finding that the TSX had a direct interest in the proceeding because its market regulation and enforcement regime was being challenged, and that its participation would be useful without unfairly prejudicing the existing parties.