Kathryn J. Daniels

Staff of the Ontario Securities Commission brought a motion seeking to disclose testimony compelled from the respondent, Irwin Boock, during an SEC investigation to his co-respondents in an OSC administrative proceeding.

Boock opposed disclosure, relying on an undertaking by Staff that the evidence would not be used in the OSC proceeding and an ethical wall would be maintained.

The Commission held that the undertaking restricted Staff's use of the evidence but did not prevent its disclosure to co-respondents, who are entitled to full disclosure of relevant information to make full answer and defence.

The Commission also found that compelling the testimony and disclosing it did not violate Boock's Charter rights against self-incrimination, as the proceeding was regulatory, not criminal.

Disclosure to the co-respondents was ordered, while Staff was directed to maintain the ethical wall.

Dimethaid Research Inc. requested a hearing and review of the Director's decision objecting to the use of prospectus and registration exemptions for a proposed rights offering.

The Director objected because Dimethaid's annual financial statements did not comply with Canadian GAAP, specifically regarding the valuation of the consideration owing for the acquisition of Oxo Chemie AG.

Dimethaid argued that discounting equity was not required by Canadian GAAP and would be confusing.

The Ontario Securities Commission upheld the Director's decision, finding that the transaction was a business combination to be recorded at fair value, and that applying a proper discount to the non-interest bearing future payment obligations was the most appropriate method to determine fair value.

The appellants, a lawyer and his law firm, appealed a Divisional Court decision dismissing their application for judicial review.

They challenged the jurisdiction of the Ontario Securities Commission (OSC) to reprimand the lawyer for allegedly making misleading statements while representing a client.

The appellants argued that such conduct must be dealt with exclusively through quasi-criminal proceedings or by the Law Society.

The Court of Appeal dismissed the appeal, holding that the Securities Act provides the OSC with a flexible range of remedial options, including administrative reprimands under s. 127.

The Court also affirmed that the OSC has jurisdiction to reprimand lawyers acting in their professional capacity, provided that solicitor-client privilege is respected.