Ryan Lapensee

The Association of Professional Engineers of Ontario brought disciplinary proceedings against a professional engineer and an engineering firm regarding the failed design of a critical structural component of the Nipigon River Bridge.

The respondents admitted to professional misconduct, acknowledging they failed to verify critical design assumptions and provided inadequate oversight of a junior engineer.

The Discipline Committee accepted a joint submission on penalty, ordering a four-week licence suspension for the engineer, a requirement for the firm to implement a Quality Assurance Plan, and $200,000 in costs.

The appellant appealed a decision of the Capital Markets Tribunal finding he breached a 15-year trading ban by participating in stock secured financings.

The Tribunal found that the lenders' sales of pledged securities constituted trades, and the appellant's actions, including sourcing financing and analyzing the value of the pledged equities for compensation tied to the sales' profits, were acts in furtherance of those trades.

The Divisional Court dismissed the appeal, holding that the Tribunal made no palpable and overriding error in its contextual analysis of the appellant's conduct.

The appellants appealed a discipline panel's decision finding they engaged in professional misconduct by devising and sending three falsified emails to discredit former employees.

The appellants admitted to sending one email but claimed the other two were sent by a hacker.

The Divisional Court dismissed the appeal, finding the panel correctly applied the burden of proof, reasonably rejected the hacking theory, properly qualified the respondent's digital forensics expert, and appropriately drew an adverse inference against the appellants for failing to produce key evidence.

The court also upheld the panel's penalty and costs awards, noting the sanctions were measured given the fundamental dishonesty involved.

The Capital Markets Tribunal held a sanctions hearing after finding that the respondent breached a 2004 order permanently banning him from acting as a director or officer of an issuer and from trading in securities for 15 years.

The Tribunal ordered permanent market participation bans, disgorgement of over $3.2 million and US$10.7 million, administrative penalties totaling $1,000,000, and $300,000 in costs.

The Tribunal found the respondent's conduct to be a flagrant and recurrent breach of a Tribunal order, warranting significant specific and general deterrence.

The moving parties, professional engineers and engineering firms involved in the design and construction of the Nipigon River Bridge, brought a motion to stay disciplinary proceedings against them on the basis of delay.

The Discipline Committee found that the Association of Professional Engineers of Ontario (PEO) was responsible for approximately 36 months of inordinate delay in its investigation.

However, the Committee dismissed the motion, concluding that the moving parties failed to establish significant prejudice that would compromise hearing fairness or amount to an abuse of process.

The Committee further held that the public interest in holding a hearing on the merits regarding the failure of major public infrastructure outweighed any disrepute caused by the delay.

Staff of the Ontario Securities Commission alleged that the respondent breached a 2004 settlement order which permanently banned him from acting as a director or officer of an issuer and banned him from trading in securities for 15 years.

The Tribunal found that the respondent breached the director and officer ban by acting as a director and/or officer of 38 Ontario corporations.

The Tribunal also found that the respondent breached the trading ban by participating in the sale of shares in an Ontario corporation and by participating in several offshore stock secured financings where he acted in furtherance of trades.

The allegation of conduct contrary to the public interest was dismissed as no additional conduct beyond the statutory breaches was identified.

The appellant appealed a decision of the Capital Markets Tribunal finding that he engaged in fraudulent conduct under s. 126.1 of the Securities Act by approving unauthorized transfers of cash between investment funds to pay distributions and dealer fees.

The appellant argued the Panel erred in its factual findings, its rejection of his due diligence and reliance on legal advice defences, and its imposition of sanctions.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the Panel's factual findings or legal analysis, but reduced the disgorgement order from $51,361 to $45,298 based on a concession by the respondent regarding the calculation methodology.

The proposed intervener, a shareholder of the respondent corporation and leader of an investor group, brought a motion for leave to intervene as an added party in an application concerning the extension of an outside date for a recapitalization transaction.

The court dismissed the motion, finding that the proposed intervener's financial interest in the outcome did not constitute a direct interest in the subject matter of the private commercial dispute.

Furthermore, the court held that the proposed intervener's intended evidence regarding foreign regulatory law would not make a useful contribution to the resolution of the proceeding.

Staff of the Ontario Securities Commission sought an inter-jurisdictional enforcement order against the respondents under s. 127(10) of the Securities Act, based on a prior decision of the British Columbia Securities Commission (BCSC).

The BCSC had found that the respondents committed securities fraud by diverting investor funds from mortgage investment corporations to related companies for start-up costs.

The BCSC imposed permanent market bans and administrative penalties.

The Ontario Securities Commission found it in the public interest to reciprocate the BCSC's order, imposing permanent trading, acquisition, and director/officer bans against the respondents in Ontario to protect the capital markets.

Staff of the Ontario Securities Commission sought a reciprocal protective order against the respondent under s. 127(1) of the Securities Act, based on a prior decision of the British Columbia Securities Commission.

The BCSC had found that the respondent created and operated a shell company to conceal his involvement and provided misleading information to US regulators.

The Commission found that the threshold under s. 127(10) was met and that it was in the public interest to issue a protective order.

The Commission granted the order, imposing market prohibitions substantially similar to those ordered in British Columbia, with modifications to reflect differences in Ontario securities law, including a prohibition on trading derivatives.

During a merits hearing, the Chair of the Panel was announced as the incoming Acting Chair and CEO of the Ontario Securities Commission.

The Panel raised the issue of whether this created a reasonable apprehension of bias, given the Chair's future management responsibilities over Staff.

After receiving submissions, the Panel concluded that a reasonable and informed person might perceive a bias in favour of Staff.

The Chair recused himself from the remainder of the merits hearing and a pending disclosure motion, and the hearing proceeded with the remaining two Panel members.

The respondent brought a motion to halt a section 127 enforcement proceeding, alleging that the Ontario Securities Commission lacked jurisdiction due to institutional bias.

The respondent argued that the Commission's overlapping functions as policy-makers, adjudicators, and board members, particularly regarding the allocation of funds received from a prior settlement agreement, created a reasonable apprehension of bias.

The Commission dismissed the motion, finding that the overlapping functions were statutorily authorized by the Securities Act and did not go beyond what was permitted.

The Commission also found no evidence to overcome the presumption of impartiality or to justify interfering with Staff's discretion in choosing the venue for enforcement.

The Ontario Securities Commission approved a settlement agreement between Staff and Royal Bank of Canada (RBC) regarding allegations of supervisory inadequacies in RBC's foreign exchange (FX) trading business from 2011 to 2013.

Staff alleged that RBC failed to promote a culture of compliance, allowing FX traders to inappropriately share confidential customer information with competitors in electronic chat rooms.

RBC acknowledged the conduct was contrary to the public interest, engaged in significant remediation efforts, and agreed to make a voluntary payment of $13,552,000 and pay $800,000 in costs.

The Commission found the settlement to be in the public interest.

The Ontario Securities Commission approved a settlement agreement between Staff and The Toronto-Dominion Bank regarding allegations of supervisory inadequacies in TD's foreign exchange trading business from 2011 to 2013.

Staff alleged that TD failed to promote a culture of compliance, allowing traders to inappropriately share confidential customer information with competitors.

TD acknowledged the conduct and agreed to a voluntary payment of $9,300,900 and $800,000 in costs.

The Commission found the settlement to be in the public interest, noting TD's significant remediation efforts and exemplary cooperation.