Magna Partners Ltd., 2011 ONSEC 21

Ontario Securities Commission

Citation: Magna Partners Ltd., 2011 ONSEC 21

Date: 2011-08-16

IN THE MATTER OF AN APPLICATION FOR A HEARING AND REVIEW OF A DECISION OF A HEARING PANEL OF THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA, PURSUANT TO SECTIONS 8 AND 21.7 OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED

-and-

IN THE MATTER OF DISCIPLINE PROCEEDINGS PURSUANT TO UNIVERSAL MARKET INTEGRITY RULES 5.2 AND 7.1 RESPECTING THE BEST PRICE OBLIGATION

-between-

STAFF OF THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA

-and-

MAGNA PARTNERS LTD.

REASONS AND DECISION

Hearing: May 12, 2011

Decision: August 16, 2011

Panel: James E. A. Turner – Vice-Chair and Chair of the Panel Christopher Portner – Commissioner

Counsel: Brent Bittner – For Magna Partners Ltd. Charles Corlett – For Staff of the Investment Industry Regulatory Organization of Canada Michelle Vaillancourt – For Staff of the Ontario Securities Commission

TABLE OF CONTENTS

I. BACKGROUND

1. Introduction
2. The Application
3. The Decision of the IIROC Hearing Panel

II. THE ISSUES

III. SUBMISSIONS OF THE PARTIES

1. Applicant's Submissions
2. IIROC Staff Submissions
3. OSC Staff Submissions

IV. COMMISSION RULING ON MOTION REGARDING E-MAIL MESSAGES

V. ANALYSIS OF SUBSTANTIVE ISSUES RAISED ON THE APPLICATION

1. The Law a) Jurisdiction to Intervene b) Standard of Review and Grounds for Intervention
2. Analysis a) Previous Decisions under UMIR 5.2 and 7.1 b) Error in Principle
3. Lack of Proportionality as an Error in Principle c) CONCLUSION

REASONS AND DECISION

I. BACKGROUND

1. Introduction

1On May 12, 2011, the Ontario Securities Commission (the "Commission") held a hearing to consider an application dated December 2, 2010 (the "Application") brought by Magna Partners Ltd. (the "Applicant") under section 21.7 of the Securities Act, R.S.O. 1990, c. S.5 as amended (the "Act"), for a hearing and review of a decision and reasons (the "Decision") of a hearing panel (the "IIROC Hearing Panel") of the Investment Industry Regulatory Organization of Canada ("IIROC") dated October 28, 2010. These are our reasons and decision relating to the Application.

2The Decision arose from a sanctions hearing that was based on an agreed statement of facts (the "Agreed Statement of Facts") in which the Applicant admitted breaches of Universal