Kitmitto v. Ontario (Securities Commission), 2024 ONSC 1412

CITATION: Kitmitto v. Ontario (Securities Commission), 2024 ONSC 1412

DIVISIONAL COURT FILE NO.: 23-045, 23-063 & 23-067

DATE: 20240314

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

R.S.J. Firestone, Lococo and Ryan Bell JJ.

BETWEEN:

majd kitmitto, christopher candusso and donald Alexander (sandy) goss

Appellants

– and –

ontario SEcurities Commission

Respondent

Andrew Guaglio, for the Appellant Kitmitto

Alistair Crawley and Alexandra Grishanova, for the Appellant Candusso

Lara Jackson, John M. Picone and Rayna Middleton, for the Appellant Goss

Katrina Gustafson, Khrystina McMillan and Amethyst Haighton, for the Respondent

HEARD in Toronto: November 29-30, 2023

REASONS FOR JUDGMENT

R. A. LOCOCO J.

I. Introduction

[1] The appellants Majd Kitmitto, Christopher Candusso and Donald Alexander (Sandy) Goss appeal two decisions of the Capital Markets Tribunal.

[2] In the “Merits Decision” dated May 26, 2022 (reported at 2022 ONCMT 12), a majority of the Tribunal panel found the appellants breached s. 76 of the Securities Act, R.S.O. 1990, c. S.5, which prohibits insider trading and tipping.

[3] In the “Sanctions Decision” dated January 20, 2023 (reported at 2023 ONCMT 4), the Tribunal imposed various sanctions, including market participation bans, administrative monetary penalties, disgorgement of profits, and costs.

[4] The appellants submit that the Tribunal majority erred in the Merits Decision on various questions of law, fact, and mixed fact and law, including by misapprehending applicable legal principles and not properly applying them to the evidence, which was largely circumstantial.

[5] In the alternative, Mr. Kitmitto and Mr. Goss submit that the Tribunal erred in the Sanctions Decision, including by imposing punitive sanctions that were not proportionate to their conduct and that did not properly take into account mitigating factors applicable to them individually.

[6] For the reasons below, I would dismiss the appeals against both decisions.

II. Background

[7] Amaya Gaming Group Inc. (“Amaya”) is a publicly traded company in the online gaming business. On June 12, 2014, Amaya announced the acquisition of another, much larger gaming operation that owned the PokerStars brand. The Tribunal decisions under appeal involved allegations by staff of the respondent Ontario Securities Commission (“OSC”) that the appellants were involved in illegal tipping and insider trading prior to the public announcement of that acquisition: Merits Decision, at paras. 1, 3.

[8] The prohibition against insider trading and tipping is found in s. 76 of the Securities Act, which at the relevant time provided in part as follows:

Trading where undisclosed change

76 (1) No person or company in a special relationship with a reporting issuer shall purchase or sell securities of the reporting issuer with the knowledge of a material fact or material change with respect to the reporting issuer that has not been generally disclosed.

Tipping

(2) No reporting issuer and no person or company in a special relationship with a reporting issuer shall inform, other than in the necessary course of business, another person or company of a material fact or material change with respect to the reporting issuer before the material fact or material change has been generally disclosed.

[9] Under s. 76(5) of the Securities Act, a person in a special relationship with a reporting issuer was defined to include (i) certain persons that were closely connected to the issuer (see ss. 76(5)(a) to (d)), and (ii) persons that had no direct connection to the issuer but received material information with respect to the issuer from another person that the recipient knew or ought reasonably to have known to be a person in a special relationship with the issuer (see s. 76(5)(e)).

[10] In its Statement of Allegations dated November 23, 2018, OSC staff sought orders against the appellants and certain other individuals (referred to in these reasons collectively as the “defending parties”), each of whom had a direct or indirect connection with Aston Hill Asset Management Inc., a portfolio manager, or its affiliate, Aston Securities Inc. The parent company of Aston Asset Management was Aston Hill Financial Inc.: Merits Decision, at paras. 7-8.

[11] Mr. Kitmitto was a senior analyst at Aston Asset Management. He covered securities in the technology and gaming sectors. He was not an OSC registrant but was an “access person” under his employer’s personal trading policy, meaning someone with regular access to non-public information regarding transactions and compositions of the funds managed by his employer or its affiliates: Merits Decision, at paras. 8-9, 33.

[12] Mr. Candusso was Mr. Kitmitto’s roommate. They met at university and lived in a condominium owned by Mr. Candusso’s father. Mr. Candusso knew that Mr. Kitmitto was an analyst at Aston Asset Management who covered the gaming sector: Merits Decision, at para. 11.

[13] Mr. Goss was an investment advisor at Aston Securities, the office of which was located next to Aston Asset Management. Those two companies shared a common reception: Merits Decision, at para. 13.

[14] The Statement of Allegations alleged that the other defending parties were also involved in insider trading and tipping. They were Steven Vannatta (a portfolio manager with Aston Asset Management, who shared an office with Mr. Kitmitto), Frank Fakhry (an investment advisor with Aston Securities, who worked with Mr. Goss), John Fielding (a director of Aston Financial who was a significant client of Mr. Goss) and Mr. Candusso’s father: Merits Decision, at paras. 10, 12, 14-15.

[15] OSC staff alleged that on April 25, 2014, Mr. Kitmitto became aware of material non-public information (“MNPI” or “insider information”) relating to Amaya’s proposed acquisition of PokerStars: Merits Decision, at para. 3. On that day, Mr. Kitmitto participated in an online Bloomberg “persistent chat” along with Mr. Vannatta, through which Mr. Kitmitto was invited by an investment dealer representing Amaya to attend a meeting with Amaya management about a potential transaction. Mr. Kitmitto signed a non-disclosure agreement, to be delivered at the meeting: Merits Decision, at para.197. At that meeting (which occurred on April 29, 2014), Mr. Kitmitto learned the particulars of Amaya’s proposed transaction. Amaya publicly announced the acquisition on June 12, 2014: Merits Decision, at paras. 183-85.

[16] As set out in the Merits Decisions, at para. 3, OSC staff alleged that between April 25 and June 12, 2014 (defined in the Merits Decision as the “Relevant Period”), Amaya MNPI was shared and insider trading and tipping occurred, including as follows:

a. Mr. Kitmitto informed Mr. Vannatta, Mr. Goss and Mr. Candusso about the Amaya MNPI;

b. Mr. Vannatta bought Amaya shares and communicated the Amaya MNPI to family members who also bought Amaya shares;

c. Mr. Candusso bought Amaya shares and communicated the Amaya MNPI to his father, who also bought Amaya shares;

d. Mr. Goss bought Amaya shares and communicated the Amaya MNPI to his colleague Mr. Fakhry (who also bought Amaya shares and communicated the Amaya MNPI to relatives and a client) and to his client Mr. Fielding (who bought Amaya shares); and

e. Mr. Goss and Mr. Fakhry recommended Amaya to certain of their clients.

[17] Following a virtual hearing that ran 36 days from October 2020 to February 2021 followed by written closing submissions, the three-member Tribunal panel rendered their 668-paragraph Merits Decision dated May 26, 2022, which included (at paras. 426-668) the separate reasons of one panel member (the “Minority Reasons”), who dissented in part.

[18] In the Merits Decision, at para. 182, the Tribunal majority found that at his meeting with Amaya management on April 29, 2014, Mr. Kitmitto received MNPI about Amaya’s proposed acquisition of PokerStars: Merits Decision, at para. 182. The information included the purchase price, details of how the transaction would be financed, a “green light” on a regulatory approval, and a timeline: Merits Decision, at para. 185.

[19] The Tribunal majority also found that the information Mr. Kitmitto had prior to the April 29 meeting about a “potential transaction” was not sufficient to constitute MNPI, stating that such information “could not reasonably be expected to have a material effect on Amaya’s share price because there was still uncertainty and a lack of specificity about the potential transaction”: Merits Decision, at para. 184. The Tribunal majority also found that the information Mr. Kitmitto received prior to April 29, 2014 about a potential transaction, while not MNPI, was “confidential” information that should not be shared with others: Merits Decision, at paras. 197-198.

[20] At para. 5, the Tribunal majority found that in the period from Mr. Kitmitto’s receipt of Amaya MNPI on April 29, 2014, until the public announcement of the PokerStars acquisition on June 12, 2014:

a. Mr. Kitmitto tipped Mr. Vannatta, Mr. Candusso and Mr. Goss, in breach of s. 76(2) of the Securities Act;

b. Mr. Candusso engaged in insider trading, in breach of s. 76(1) of the Securities Act, but did not tip his father; and

c. Mr. Goss breached s. 76 of the Securities Act by engaging in insider trading and by tipping Mr. Fakhry (but not Mr. Fielding), and also engaged in conduct abusive of the capital markets by recommending Amaya to 15 of his clients.[^1]

[21] The Tribunal majority also made adverse findings against Mr. Vannatta and Mr. Fakhry, which are not under appeal. Each of Mr. Vannatta and Mr. Fakhry filed a Notice of Appeal, but both of them passed away before the appeal hearing. The insider trading allegations against Mr. Fielding and Mr. Candusso’s father were dismissed.

[22] In her minority reasons, adjudicator Heather Zordel expressed the view that OSC staff had not established the allegations in the Statement of Allegations. She noted that the case was based on circumstantial evidence from which multiple inferences can be drawn. In these circumstances, she expressed the view that OSC staff had not met its burden of proof on a balance of probabilities: Merits Decision, at paras. 426, 430.

[23] In the Sanctions Decision, at para. 3, the Tribunal unanimously[^2] found that it was in the public interest to impose the following sanctions and costs:

a. Mr. Kitmitto: (i) market participation bans for ten years, with certain carve-outs, (ii) an administrative penalty of $600,000, and (iii) costs of $147,075;

b. Mr. Candusso: (i) market participation bans for three years, with certain carve-outs, (ii) an administrative penalty of $100,000, (iii) disgorgement of $30,782, and (iv) costs of $73,537; and

c. Mr. Goss: (i) market participation bans for 15 years, with certain carve-outs, (ii) an administrative penalty of $1,000,000, (iii) disgorgement of $1,228,509, and (iv) costs of $183,844.

III. Jurisdiction and standard of review

[24] The Divisional Court has jurisdiction to hear these appeals: Securities Act, s. 10(1). The appellate standards of review apply, as set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 8, 10, 19, 26-37; Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 2 S.C.R. 653, at para. 37.

[25] The standard of review is correctness for questions of law, including legal principles extricable from questions of mixed fact and law.

[26] The standard of review is palpable and overriding error for questions of fact and for questions of mixed fact and law (where the legal principle is not readily extricable), including with respect to the application of correct legal principles to the evidence.

[27] A palpable and overriding error is an obvious error that is sufficiently significant to vitiate the challenged finding: Longo v. MacLaren Art Centre, 2014 ONCA 526, 323 O.A.C. 246, at para. 39. The appellant must show that the error goes to the root of the challenged finding such that it cannot safely stand in the face of the error: Waxman v. Waxman (2004), 2004 39040 (ON CA), 186 O.A.C. 201 (C.A.), at para. 297, leave to appeal refused, [2004] S.C.C.A. No. 291.

[28] When the decision under appeal is fact-intensive or involves the exercise of discretion, care must be taken in identifying extricable errors of law since the process of severing out legal issues can undermine the standard of review analysis. An arguably unreasonable exercise of discretion is not an error of law or jurisdiction: Wood Buffalo (Regional Municipality) v. Alberta (Energy and Utilities Board), 2007 ABCA 192, 80 Alta. L.R. (4th) 229, at para. 8; Natural Resource Gas Limited v. Ontario (Energy Board), 2012 ONSC 3520 (Div. Ct.), at para. 8; Conserve Our Rural Environment v. Dufferin Wind Power Inc., 2013 ONSC 7307 (Div. Ct.), at para. 13.

[29] While an appellate court is empowered to replace a tribunal’s findings on questions of law with its own, the correctness standard does not detract from the need to respect the tribunal’s specialized function. The tribunal’s subject matter experience and expertise relating to the requirements of its home statute are to be taken into account: Reisher v. Westdale Properties, 2023 ONSC 1817 (Div. Ct.), at paras. 9-10, citing Planet Energy (Ontario) Corp. v. Ontario Energy Board, 2020 ONSC 598 (Div. Ct.), at para. 31; Vavilov, at para. 36.

[30] The standards of review applicable to the Sanctions Decision relating to penalty and costs are addressed later in these reasons under the subheading “Sanctions appeal – Standard of review: sanctions and costs”.

IV. Issues to be determined

[31] In this appeal, the appellants ask the court to quash the Merits Decision and dismiss the allegations against them.

[32] Mr. Kitmitto submits that the Tribunal majority erred in the Merits Decision as follows:

a. Similar fact and character evidence: The Tribunal majority erred by:

i. Relying on inadmissible similar fact and bad character evidence in finding that (a) Mr. Kitmitto had a cavalier approach to compliance and confidentiality, and that (b) there was a weak culture of compliance at Aston Financial, and

ii. Using their findings on each allegation and defending party as similar fact evidence in relation to the other allegations and defending parties;

b. Alternate suspect/adverse inference: The Tribunal majority erred in (i) failing to address the reasonable possibility that if the appellants had Amaya MNPI, someone other than Mr. Kitmitto provided it, and (ii) failing to draw an adverse inference against OSC staff for not calling certain witnesses who could negative the reasonable possibility that someone other than Mr. Kitmitto tipped Mr. Goss and Mr. Vannatta; and

c. “Timely” trades: The Tribunal majority erred in holding that Mr. Kitmitto tipped Mr. Vannatta in reliance on their finding that Mr. Vannatta’s Amaya trades in May 2014 were “timely”. By doing so, the Tribunal majority reversed the burden of proof, failed to consider relevant evidence and made unreasonable inferences.

[33] Mr. Candusso submits that the Tribunal majority erred in the Merits Decision as follows:

a. Knowledge of Amaya MNPI: The Tribunal majority erred in drawing the inference that Mr. Candusso traded with knowledge of Amaya MNPI. The circumstantial evidence they relied on was not reasonably capable of supporting that inference. The Tribunal majority failed to give any weight to contrary evidence.

b. Rejecting evidence on an improper basis: The Tribunal majority erred in rejecting Mr. Candusso’s evidence on the following improper bases: (i) improved recollection, (ii) stereotypical assumptions, and (iii) unacceptable evidence bootstrapping by refusing to believe that Mr. Candusso would buy Amaya shares without consulting Mr. Kitmitto as a basis for rejecting Mr. Candusso’s evidence of independent research and decision-making.

c. “Special relationship” with Amaya: The Tribunal majority erred in finding that Mr. Candusso was in a “special relationship” with Amaya. There was no evidence that Mr. Candusso received Amaya MNPI from a person that he knew was in a special relationship with Amaya.

[34] Mr. Goss submits that in finding he received Amaya MNPI from Mr. Kitmitto, engaged in insider trading and tipped Mr. Fakhry, the Tribunal majority erred in law and principle and made other palpable and overriding errors by misapprehending and misapplying the law relating to tipping and insider trading, including the law relating to burden of proof and how inferences of fact may be drawn.

[35] In the alternative, Mr. Kitmitto and Mr. Goss ask the court to vary the Sanctions Decision by imposing less onerous sanctions and costs on them.

[36] In the balance of these reasons, I will address the above issues in turn.

V. Mr. Kitmitto’s merits appeal

A. Introduction

[37] Mr. Kitmitto submits that the Tribunal majority erred in the Merits Decision, as discussed further below. Mr. Kitmitto says that the consequences of these errors were significant, since the findings that Mr. Kitmitto tipped Mr. Vannatta, Mr. Candusso and Mr. Goss were central to the Tribunal majority’s decision. As the OSC points out in its factum, the Tribunal majority found that the appellants and other defending parties collectively committed multiple tipping and insider trading violations across three distinct chains, all of which originated with the tipping of those three individuals by Mr. Kitmitto (who did not himself engage in any trading in Amaya shares for his own account). Reversible error related to the findings that Mr. Kitmitto tipped those individuals would be fatal to the findings against all the appellants.

B. Similar fact and character evidence

i. Mr. Kitmitto’s submissions

[38] Mr. Kitmitto submits that the Tribunal majority erred by relying on inadmissible similar fact and bad character evidence in finding that (i) Mr. Kitmitto had a cavalier approach to compliance and confidentiality, and that (ii) there was a weak culture of compliance at Aston Financial. He also submits that the Tribunal majority erred in using their findings on each allegation and defending party as similar fact evidence in relation to the other allegations and defending parties. Mr. Kitmitto argues that these errors were on questions of law, reviewable on a correctness standard.

[39] At the Tribunal hearing, Mr. Kitmitto submitted that OSC staff improperly relied on similar fact evidence or evidence of disposition or character: Merits Decision, at para. 114. He also argued that he had not opened the door to an attack on his character by putting his character in issue; he simply denied the allegations: Merits Decision, at para. 117.

[40] In considering Mr. Kitmitto’s submissions, the Tribunal majority, at para. 115, cited the leading authority of R. v. Handy, 2002 SCC 56, [2002] 2 S.C.R. 908, at para. 55, and summarized the law relating similar fact and character evidence as follows:

There is a general rule excluding admission of evidence of disposition or character. Similar fact evidence is an exception to that general exclusionary rule. With respect to similar fact evidence, the onus is on the party seeking to rely on it to establish on a balance of probabilities that the probative value of the evidence on a particular issue outweighs its potential prejudice.

[41] Of the six pieces of evidence that were challenged, the Tribunal majority found that three of them were to be given no weight. The Tribunal majority then went on to dismiss Mr. Kitmitto’s objections to admission of the other three pieces of evidence, including (i) Mr. Kitmitto’s alleged cavalier approach to confidentiality and compliance, and (ii) an alleged culture of non-compliance at Aston Financial.

[42] The Tribunal majority found that the evidence about Mr. Kitmitto’s alleged “cavalier approach to confidentiality and compliance” (“Cavalier Attitude”) was not similar fact or bad character evidence, stating that they considered “such evidence part of the fabric of circumstantial evidence we need to consider and weigh in arriving at our decision”: Merits Decision, at para. 127. Similarly, they found that the evidence about the “weak culture of compliance in the offices of the Aston Financial companies” (“Non-compliance Culture”) was not similar fact evidence, but rather was “part of the circumstantial evidence that we must consider and weigh in this case”: Merits Decision, at para. 126.

[43] At para. 196, the Tribunal majority referred to Mr. Kitmitto’s alleged Cavalier Attitude when considering whether to accept his evidence that he did not tip Mr. Vannatta prior to the latter’s purchase of Amaya shares on May 6 and 14, 2014. The Tribunal majority did not accept Mr. Kitmitto’s evidence in which he denied tipping Mr. Vannatta, and went on to state as follows:

We find that Kitmitto’s cavalier attitude towards the handling of confidential information during the Relevant Period, which we describe below, combined with the other circumstantial evidence about Vannatta described in this section, establishes on a balance of probabilities that Kitmitto told Vannatta about the Amaya MNPI.

[44] To support their findings about Mr. Kitmitto’s Cavalier Attitude, the Tribunal Majority referred to two incidents that occurred in the period commencing April 25, 2014, prior to the meeting with Amaya management on April 29, 2014 (at which the Tribunal majority found that Mr. Kitmitto received Amaya MNPI). Those incidents occurred within the “Relevant Period” (starting April 25, 2014) during which OSC staff alleged that the defending parties engaged in illegal activity but were not within the period (that started after the meeting with Amaya management on April 29) in which the Tribunal majority found that some of the defending parties engaged in illegal tipping and insider trading.

[45] The first of these incidents was Mr. Kitmitto’s online participation in a Bloomberg “persistent chat” on April 25, along with Mr. Vannatta and an investment dealer representing Amaya, which led to Mr. Kitmitto’s being invited to the April 29 meeting with Amaya management. While the Tribunal majority found the information that Mr. Kitmitto received prior to April 29 about a potential transaction was not Amaya MNPI, they found that it was information that Mr. Kitmitto acknowledged to be “confidential”. The Tribunal majority noted that Mr. Kitmitto made “no apparent attempt … to ensure that the information was not visible or available to Vannatta”: Merits Decision, at paras. 197-198.

[46] The second incident occurred on April 29, 2014 (prior to Mr. Kitmitto’s meeting that day with Amaya management), when Mr. Kitmitto sent an email to one of Aston Asset Management’s equity traders with instructions to buy 200,000 Amaya shares for two of Aston Asset Management’s investment funds. The Tribunal majority noted that OSC staff did not allege that this trade was an illegal insider trade but the Tribunal majority considered the trade to be relevant to their assessment of whether “it is more likely than not that Kitmitto shared MNPI about Amaya with his colleague and friend, Vannatta”: Merits Decision, at para. 201. The Tribunal majority, at para. 202, found that the fact that Mr. Kitmitto gave those trading instructions once he had received confidential information about Amaya:

… supports in our view an inference that Kitmitto’s attitude toward compliance lacked rigour. Combined with the other circumstantial evidence discussed below relating to Vannatta, Christopher [Candusso] and Goss, Kitmitto’s instructing the funds to buy Amaya after he had received confidential information supports the further inference that it is more likely than not that Kitmitto tipped these respondents.

[47] At para. 203, the Tribunal majority set out in detail (in subparagraphs (a) to (i), covering the next page and a half of the Merits Decision) the other extensive circumstantial evidence on which they relied to support their finding that Mr. Kitmitto tipped Mr. Vannatta after the April 29 meeting with Amaya management.

[48] Mr. Kitmitto submits that the Tribunal majority erred in using these two “prior events” and their conclusions regarding Mr. Kitmitto’s Cavalier Attitude as a “primary basis” for rejecting his testimony that he did not tip Mr. Vannatta or the other appellants. Mr. Kitmitto says that this is precisely the sort of evidence and propensity-related reliance that engages the similar fact rule, which applies “where the Crown or a party proffers evidence of discreditable conduct of the accused or opposite party on other occasions as evidence of the probability that he or she did or did not perform the act which is alleged or have the requisite state of mind”, citing Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 6th ed., ch. 11, at para. 11.4, and Handy, at para. 31. Mr. Kitmitto argues that the Tribunal majority erred in relying on that evidence without satisfying themselves that it was admissible pursuant to the similar fact rule or some other exception to the prohibition on bad character evidence. He submits that the Tribunal majority’s finding that the evidence was “part of the fabric of circumstantial evidence” they needed to consider does not mean that it is not bad character or similar fact evidence.

[49] Mr. Kitmitto also argues that even if the Tribunal majority had correctly found that the Cavalier Attitude was bad character of similar fact evidence, there would have been no basis to admit the evidence. Mr. Kitmitto says this is so since (i) he did not put his character in issue, and (ii) the Bloomberg chat and the Amaya share purchase were not sufficiently similar to the alleged breaches to overcome the evidence’s prejudicial effect, since those two incidents did not involve the sharing of MNPI nor other violation of securities law: see Handy, at paras. 49-50, 76.

[50] Turning now the Tribunal majority’s reliance on evidence related to Aston Financial’s alleged Non-compliance Culture, Mr. Kitmitto submits that the Tribunal majority engaged in impermissible guilt-by-association propensity reasoning by relying on bad character evidence regarding the conduct of others at Aston Financial to support the finding that Mr. Kitmitto tipped Amaya MNPI. In particular, the Tribunal majority, at para. 285, relied on Aston Financial’s alleged Non-compliance Culture to support the finding that Mr. Kitmitto tipped Mr. Goss, as follows:

We find it more likely than not that Kitmitto shared the Amaya MNPI with Goss based on the culture at Aston Asset Management and Aston Securities, apparent from the lack of separation between the two offices, Goss’s regular movement between the offices, the close connection between Goss and Kitmitto created by working on and investing in private deals, and our earlier finding that Kitmitto had a lax attitude toward compliance.

[51] As was the case with Mr. Kitmitto’s alleged Cavalier Attitude, Mr. Kitmitto submits the Tribunal majority erred in finding that evidence of Aston Financial’s alleged Non-compliance Culture was not similar fact or bad character evidence but rather part of the circumstantial evidence they needed to consider. Mr. Kitmitto says that it was impermissible for the Tribunal majority to rely on this association evidence to conclude that Mr. Kitmitto was the type of person who would tip and was therefore more likely to have tipped Mr. Goss, arguing that association evidence “is inadmissible if it serves only to show that an accused is the type of person likely to have committed the offence”: see R. v. Phan, 2020 ONCA 298, 387 C.C.C. (3d) 383, at para. 90. In Phan, the Court of Appeal found that evidence of membership in a criminal gang is bad character evidence that is presumptively inadmissible. Mr. Kitmitto submits that the Tribunal majority’s findings regarding Aston Financial’s Non-compliance Culture in conjunction with their finding regarding Mr. Kitmitto’s Cavalier Attitude went to the heart of their rejection of Mr. Kitmitto’s testimony and their finding that he tipped Mr. Goss.

[52] Mr. Kitmitto also submits that the Tribunal majority, at paras. 129-34, erred in finding that they were permitted to use their findings on each allegation and defending party as similar fact evidence in relation to the other allegations and defending parties. Those findings were made in the context of their determination of whether they should consider the trading in Amaya shares by other defending parties during the Relevant Period when considering the allegations of against Mr. Fielding (that is, that he engaged in insider trading with knowledge of Amaya MNPI received from Mr. Goss): Merits Decision, at para. 129. The Tribunal majority found that they were entitled to consider such trading, stating that “[i]n the circumstances of this case, the pattern of trading by each of the respondents in Amaya shares during the Relevant Period supports an inference that any one of them may have engaged in insider trading and we find this more probative than prejudicial”: Merits Decision, at para. 132. However, the Tribunal majority dismissed the insider trading allegations against Mr. Fielding, finding that “we do not find such evidence sufficient to draw the inferences that Goss tipped Fielding about the Amaya MNPI and that Fielding bought Amaya shares while he had that information”: Merits Decision, at para. 134.

[53] While this part of the Merits Decision made no specific reference to the allegations against Mr. Kitmitto, he submits that the Tribunal majority erred in using their findings on each of the alleged breaches against Mr. Kitmitto to support their findings on the other alleged breaches against him (the “count-to-count” use), and by using their findings against the other defending parties as collectively supporting the allegations against him (the “defendant-to-defendant” use), without properly satisfying themselves that the similar fact test had been met. Mr. Kitmitto says that the Tribunal majority thereby engaged in impermissible bootstrapping. He also submits that even if the Tribunal majority had done that analysis, the evidence would not have met the similar fact test because the evidence supported an equal likelihood that if the Aston Financial defending parties had MNPI, it came from someone other than Mr. Kitmitto.

ii. Analysis – similar fact and bad character evidence

[54] As explained below, I have concluded that the Tribunal majority made no reversible errors in their determinations relating to similar fact and bad character evidence in the context of allegations of illegal insider trading and tipping under the Tribunal’s home statute. Those determinations related to questions of mixed fact and law. They are entitled to deference. There was no palpable and overriding error in the Tribunal majority’s analysis.

[55] The Tribunal majority did not make a reversible error in reaching the conclusion that the evidence relating to Cavalier Attitude and Non-compliance Culture was not similar fact or bad character evidence but rather was part of the body of circumstantial evidence relevant to the allegations. A determination of whether evidence forms part of the context of the allegations or whether it is unrelated discreditable conduct subject to the similar fact evidence rule is a context dependent analysis that is guided by common sense: R. v Holder, 2018 ONSC 2842, at para. 16.

iii. “Cavalier Attitude” evidence

[56] The Cavalier Attitude finding was based on two underlying factual findings: (i) Mr. Kitmitto shared confidential information on the Amaya acquisition in the Bloomberg persistent chat (information he acknowledged to be confidential information although not yet MNPI); and (ii) he instructed an Aston Asset Management trader to purchase Amaya shares after receiving confidential information. Both events were part of the factual narrative explaining how Mr. Kitmitto gained and handled confidential information relating to Amaya. The conduct was not unrelated discreditable conduct, rather it was part of the narrative of Mr. Kitmitto’s involvement in the Amaya transaction, that is, how he received confidential information (and ultimately MNPI) about the transaction, his lack of rigour in safeguarding confidential information, and his unlawful tipping of Amaya MNPI to Mr. Vannatta, Mr. Candusso and Mr. Goss. The Tribunal majority did not err in concluding that these underlying factual findings were part of the “fabric of circumstantial evidence” to be taken into account and weighed in reaching their decision that Mr. Kitmitto shared Amaya MNPI.

iv. “Non-compliance Culture” evidence

[57] The Tribunal majority’s finding relating to Non-compliance Culture was based on underlying facts concerning the nature of the relationship and communications between Mr. Kitmitto and Mr. Goss and the way Mr. Kitmitto handled confidential information about the Amaya acquisition. As the Tribunal majority stated, at para. 285, the Non-compliance Culture was “apparent from the lack of separation between the two offices [of Aston Asset Management and Aston Securities], Goss’s regular movement between the offices, the close connection between Goss and Kitmitto created by working on and investing in private deals”. The evidence the Tribunal majority relied on relating to the Non-compliance Culture was relevant to the allegations that the defending parties misused of Amaya confidential information, including Amaya MNPI.

[58] The Tribunal majority did not err in relying on that evidence together with their prior finding relating to Mr. Kitmitto’s Cavalier Attitude (referred to in para. 285 as his “lax attitude toward compliance”) to support their finding that Mr. Kitmitto tipped Mr. Goss. That evidence was not bad character evidence. The lack of separation between the Aston Asset Management (where Mr. Kitmitto worked) and Aston Securities (the brokerage side where Mr. Goss worked), Mr. Goss’ movement between the two offices, and the connections they forged working together on private deals are facts about their relationship and opportunities to communicate that existed between Mr. Kitmitto and Mr. Goss. It is circumstantial evidence relevant to the allegation that Mr. Kitmitto shared Amaya MNPI with Mr. Goss. The Tribunal majority was required to assess this relationship and communication evidence in determining whether Mr. Kitmitto tipped Mr. Goss.

[59] Nor am I persuaded by Mr. Kitmitto’s submission that by relying on the evidence of Aston Financial’s Non-compliance Culture in finding that Mr. Kitmitto tipped Mr. Goss, the Tribunal majority engaged in “guilt by association” reasoning. Phan, on which Mr. Kitmitto relies, was a criminal case, dealing with bad character evidence relating to the accused’s membership in a violent criminal gang. In contrast, the Tribunal majority did not rely on evidence about Mr. Kitmitto’s association with anyone other than Mr. Goss, that association being directly relevant to the tipping allegations in this case.

v. “Count-to-count” or “defendant to defendant” similar fact evidence

[60] Mr. Kitmitto submits that the Tribunal majority erred in finding that they were permitted to use their findings on each allegation and defending party as similar fact evidence in relation to the other allegations and defending parties, without properly satisfying themselves that the similar fact test had been met. Mr. Kitmitto says that the Tribunal majority thereby engaged in impermissible bootstrapping. As noted above, the Tribunal majority’s finding was in the context of their determination of whether they should consider the trading in Amaya shares by other defending parties during the Relevant Period when considering the allegations against Mr. Fielding (that is, that he engaged in insider trading with knowledge of Amaya MNPI received from Mr. Goss): Merits Decision, at para. 129.

[61] I do not agree that the Tribunal majority erred in its findings.

[62] In the Merits Decision, at para. 115, the Tribunal majority correctly set out the test for admission of similar fact evidence, citing the leading authority, Handy, at para. 55. When determining whether Amaya trading by other defending parties was admissible as similar fact evidence, the Tribunal majority, at para. 130-31, distinguished prior Tribunal decisions on the basis that they dealt with tipping and insider trading in a number of different securities and there were “sufficient dissimilarities between transactions that the prejudicial effect would outweigh the probative value.” In contrast, the Tribunal majority, at para. 32, noted that there was a “pattern of trading by each of the respondents in Amaya shares during the Relevant Period” and concluded that this pattern of trading in the same security during the same period “supports an inference that any one of them may have engaged in insider trading and we find this more probative than prejudicial.”

[63] I agree with the OSC that having correctly articulated that test, the Tribunal majority’s reasoning demonstrated that they understood the requirement to weigh probative value against prejudicial effect, identifying the issues to which the similar fact evidence was relevant, namely the actus reus of the breaches. They found the evidence was admissible, a question of mixed fact and law. The decision to admit the evidence was entitled to “a high degree of deference”: R. v Arp, 1998 769 (SCC), [1998] 3 S.C.R. 339, at para. 42; R. v. J.H., 2018 ONCA 245, at para. 11. There was no palpable and overriding error.

vi. Conclusion – similar fact and bad character evidence

[64] For the above reasons, I have concluded that the Tribunal majority made no reversible errors in the Merits Decision in their determinations relating to similar fact and bad character evidence.

[65] The OSC also submits that in any event, even if all the evidence Mr. Kitmitto characterizes as similar fact or bad character evidence were removed, it would have no impact on the outcome. I agree. There was still a wealth of evidence supporting the conclusion that Mr. Kitmitto tipped Mr. Vannatta, Mr. Candusso and Mr. Goss: see Merits Decision, at para. 203.

C. Alternate suspect/adverse inference

i. Mr. Kitmitto’s submissions

[66] Mr. Kitmitto submits that the Tribunal majority erred by failing to address the reasonable possibility that if the appellants had Amaya MNPI, someone other than Mr. Kitmitto provided it (sometimes referred to as an “alternate suspect” defence). He also submits that the Tribunal majority erred in failing to draw an adverse inference against OSC staff for not calling as witnesses certain other individuals with Aston Financial who could negative the reasonable possibility that someone other than Mr. Kitmitto tipped Mr. Vannatta, Mr. Goss and Mr. Candusso.

[67] Mr. Kitmitto says that because the case against him is based solely on circumstantial evidence, the Tribunal was required to consider reasonable competing inferences that were available on the evidence. He relies on R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000, at paras. 37-38, in which the Supreme Court of Canada stated:

37. When assessing circumstantial evidence, the trier of fact should consider “other plausible theor[ies]” and “other reasonable possibilities” which are inconsistent with guilt…. [T]he Crown thus may need to negative these reasonable possibilities, but certainly does not need to “negative every possible conjecture, no matter how irrational or fanciful, which might be consistent with the innocence of the accused” …. “Other plausible theories” or “other reasonable possibilities” must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation.

38. Of course, the line between a “plausible theory” and “speculation” is not always easy to draw. But the basic question is whether the circumstantial evidence, viewed logically and in light of human experience, is reasonably capable of supporting an inference other than that the accused is guilty. [Citations omitted.]

[68] Mr. Kitmitto submits that there was a reasonable competing inference, equally possible on the evidence, that even if some of the other defending parties did trade on Amaya MNPI, someone other than Mr. Kitmitto was the source. Mr. Kitmitto says that the evidence before the Tribunal was that he needed to update numerous individuals at Aston Financial about the details of the proposed acquisition as they developed. Those individuals were all potential MNPI sources. Mr. Kitmitto also submits that beyond Aston Financial personnel, the details of the proposed transaction (including details he received at the April 29, 2014 meeting with Amaya management) would have been available to a significant number of other persons (which he says may number in the hundreds), any of whom were potential sources of the Amaya MNPI.

[69] In these circumstances, Mr. Kitmitto submits that the Tribunal majority erred by failing to consider and address in their reasons the reasonable possibility the someone other than Mr. Kitmitto provided Amaya MNPI to Mr. Vannatta, Mr. Goss and Mr. Candusso.

[70] Mr. Kitmitto also submits that the Tribunal majority erred in failing to draw an adverse inference against OSC staff for not calling as witnesses other individuals with Aston Financial. Mr. Kitmitto says that each of those individuals was a potential source of evidence for OSC staff to negative the reasonable possibility that someone at Aston Financial other than Mr. Kitmitto was the source of the Amaya MNPI. At the Tribunal hearing, Mr. Kitmitto requested that the Tribunal draw an adverse inference against OSC staff on that basis. At para. 112, the Tribunal majority declined to so, as follows:

It is settled law that a respondent is not entitled to dictate the nature and scope of an investigation [citing Azeff (Re), 2012 ONSEC 16 (“Azeff (Merits)”), at para. 284]. Staff has prosecutorial discretion to put forward the case they deem appropriate. It is the panel’s responsibility to determine if the evidence tendered by [OSC] Staff establishes the allegations against the respondents. We draw no adverse inference against Staff for their decisions about what witnesses to call in this proceeding.

[71] Mr. Kitmitto submits that OSC staff’s discretion over the conduct of its case does not mean that its decisions about calling witnesses are immune from scrutiny. An adverse inference may be drawn against a party for failing to produce a witness that was “reasonably assumed to be favourable to that party”: R. v. Ellis, 2013 ONCA 9, 113 OR (3d) 641, at para. 46. Mr. Kitmitto argues that absent a reasonable explanation, an adverse inference against OSC staff was warranted on the basis that it would be reasonable to assume that the witnesses would be called if their evidence would be favourable to OSC staff.

[72] Mr. Kitmitto submits that the Tribunal majority’s failure to draw an adverse inference against OSC staff was significant because doing so would have supported Mr. Kitmitto’s alternate suspect defence. Such an inference would also have countered the allegation that there was a Non-compliance Culture at Aston Financial, thereby supporting Mr. Kitmitto’s credibility and his defence that he did not tip.

ii. Analysis – alternate suspect/adverse inference

[73] I have concluded that the Tribunal majority did not err by failing to consider and address in their reasons the reasonable possibility that someone other than Mr. Kitmitto tipped Amaya MNPI.

[74] While the Tribunal majority did not expressly address Mr. Kitmitto’s alternative suspect defence, a decision maker is not required to expressly address every argument raised by the defending parties. Considered as a whole, the Tribunal majority’s reasons show that they considered the evidence before them and concluded, based on the totality of the record, that it was more likely than not that Kitmitto tipped each of Mr. Vannatta, Mr. Candusso and Mr. Goss.

[75] Reasons are sufficient where, when viewed in their entire context and with deference, they meet the criteria of informing the parties of the basis for the outcome, providing public accountability and permitting meaningful appellate review: R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3 at paras. 25, 37, 55; CAMPP Windsor Essex Residents Association v. Windsor (City), 2020 ONSC 4612, 5 M.P.L.R. (6th) 230 (Div. Ct.), at para 57. There is no obligation on a tribunal to mention every piece of evidence or record every argument or aspect of the deliberation process: Quadrexx Hedge Capital Management Ltd. v. Ontario Securities Commission, 2020 ONSC 4392, 151 O.R. (3d) 709 (Div. Ct.), at paras. 120-121; R.E.M., at paras. 64-68: CAMPP, at para. 108, citing Vavilov, at para. 128. The reasons “must, at a minimum, provide some insight into how the legal conclusion was reached and what facts were relied upon in reaching that conclusion”: Quadrexx, at para. 121; see also R.E.M., at paras. 55-56.

[76] The Tribunal majority’s reasons met that threshold. The Tribunal majority recognized that others at Aston Financial and elsewhere possessed the same Amaya MNPI as Mr. Kitmitto, an obvious conclusion (given the nature of the proposed transaction) that was reflected in the Tribunal majority’s reasons: for example, see Merits Decision, at paras. 183, 185, 190, 398(c)-(d). In this context, the Tribunal majority set out in a logical and intelligible manner their reasons for concluding it was more likely than not that Mr. Kitmitto tipped each of Mr. Vannatta, Mr. Candusso and Mr. Goss and pointed to specific factors and evidence supporting these conclusions: Merits Decision, at paras. 195-96, 202-03, 258-60, 304. They did not look solely to whether each tippee was tipped or otherwise disregard the issue of the tipper’s identity.

[77] I have also concluded that the Tribunal majority did not err in failing to draw an adverse inference against OSC staff for not calling as witnesses other individuals with Aston Financial.

[78] There is no obligation on the prosecution to call a witness that it considers unnecessary to its case. In limited circumstances, a trier of fact may, in the exercise of its discretion, draw an adverse inference from the failure of a party to call a witness, but the inference “should only be drawn with the greatest of caution”; it is “the exception not the rule”: R. v. Lo, 2020 ONCA 622, 152 O.R. (3d) 609, at paras. 156, 162. It should be drawn only “where there is not a plausible reason for nonproduction, i.e., where it would be natural for the party to produce the evidence if the facts exposable by the witness had been favourable”: R. v Lapensee, 2009 ONCA 646, 99 O.R. (3d) 501, at para 42. An adverse inference should not be drawn where the evidence would be unimportant, cumulative or inferior to the evidence already available on the relevant point: Lapensee, at para. 43.

[79] In this case, it was undisputed that numerous other individuals, both within and outside Aston Financial, had the same Amaya MNPI as Mr. Kitmitto. OSC staff’s case did not turn on a process of eliminating every other conceivable source of the tip. Rather, its case was that the evidence pointed squarely to Mr. Kitmitto as the tipper of Mr. Vannatta, Mr. Candusso and Mr. Goss. Mr. Kitmitto’s alternate suspect theory is inconsistent with that evidence. In these circumstances, it was unnecessary for OSC staff to call other MNPI holders to deny being the tipper. As well, any such denials would have amounted to peripheral and largely pointless evidence, given the large number of individuals that Mr. Kitmitto says may have had Amaya MNPI.

D. “Timely” trades

[80] Mr. Kitmitto submits the Tribunal majority erred in holding that he tipped Mr. Vannatta in reliance on their finding that Mr. Vannatta’s Amaya trades in May 2014 were “timely”. Mr. Kitmitto says that by doing so, the Tribunal majority erred in law by reversing the burden of proof, failed to consider relevant evidence, and made unreasonable inferences.

[81] I disagree.

[82] As his first submission, Mr. Kitmitto argues that the Tribunal majority erred by reversing the burden of proof in their finding that Mr. Vannatta’s trading was “timely”. The Tribunal majority drew this conclusion based in part on their finding that there was no evidence before it “about any alternative basis for Vannatta’s interest in buying Amaya”: Merits Decision, at para. 203(h)(iii). Before the Tribunal, the burden of proving the allegations was on OSC staff. Mr. Kitmitto says that the appellants need not provide evidence of alternative explanations for OSC staff’s evidence, and where there is an absence of evidence, this is not positive proof of an allegation: see R. v. L.L., 2009 ONCA 413, 96 O.R. (3d) 412, at paras. 44-45.

[83] In L.L., the Court of Appeal addressed “the issue of a complainant’s motive to fabricate,” noting that “the absence of evidence of motive to fabricate is not the same as absence of motive to fabricate”, but also stated that “it does not logically follow that because there is no apparent reason for a witness to lie, the witness must be telling the truth”: L.L., at para. 44. In R. v. Ignacio, 2021 ONCA 69, 400 C.C.C. (3d) 343, the Court of Appeal confirmed that “the trier of fact is entitled to consider the absence of evidence of motive to fabricate as one factor [among many] in assessing the complainant’s credibility” (emphasis in original), but also cautioned against “placing an improper emphasis on the absence of evidence of motive to fabricate”, which may result in improperly “placing an onus on the accused to prove the complainant had a motive to lie”: Ignacio, at para. 52.

[84] It is clear that the Tribunal majority was entitled to consider and rely on the absence of any evidence “about any alternative basis for Mr. Vannatta’s interest in buying Amaya”: Merits Decision, at para. 203(h)(iii). There is no suggestion in this language that the Tribunal majority was placing a burden on Mr. Vannatta (or Mr. Kitmitto) to provide an innocent explanation for these trades or that the Tribunal majority took this absence of evidence as “positive proof of an allegation” as Mr. Kitmitto suggests. The Court of Appeal has confirmed that the trier of fact is entitled to rely on the absence of evidence as one factor among many in assessing credibility: see Ignacio, at paras. 37-38; 52-59.

[85] As his second submission, Mr. Kitmitto argues that in finding that there was no evidence of “any alternative basis for Vannatta’s interest in buying Amaya”, the Tribunal majority ignored their own findings and relevant evidence: R. v. Harper, 1982 11 (SCC), [1982] 1 S.C.R. 2, at p. 14. Specifically, they ignored their finding that Mr. Vannatta bought Amaya stock on April 29, 2014, before Mr. Kitmitto met with Amaya management because Mr. Vannatta knew that Mr. Kitmitto was “being brought over the wall” on an Amaya-related transaction: Merits Decision, at para. 238. Therefore, they ignored their finding of fact that Mr. Vannatta had a basis other than Amaya MNPI to purchase Amaya shares. Mr. Kitmitto says that the Tribunal majority also ignored the evidence before the Tribunal on why Amaya was an attractive investment leading up to and during the Relevant Period, including the repeated public reporting and discussion on the company: see Minority Reasons, at paras. 466-85.

[86] I do not agree that the Tribunal majority ignored their own findings and relevant evidence in finding that there was no evidence of any alternative basis for Mr. Vannatta’s interest in buying Amaya shares. The Tribunal majority’s finding, at para. 238, that Mr. Vannatta based his April 29 trade on confidential information from Mr. Kitmitto about a strategic transaction involving Amaya is not inconsistent with their finding that there was no evidence of an alternative basis for Mr. Vannatta’s Amaya trading. In context, the Tribunal majority was clearly referring to an alternative legitimate basis for Mr. Vannatta’s trading, that is, not a basis grounded in knowledge of confidential information about a strategic transaction. Likewise, the Tribunal majority did not ignore “evidence on why Amaya was an attractive investment” at this time (as Mr. Kitmitto alleges), since there was no evidence that Mr. Vannatta based his trading on public information about Amaya.

[87] As his third submission, Mr. Kitmitto argues that the Tribunal majority unreasonably inferred that Mr. Vannatta’s trading was “timely” because he “only bought Amaya shares during the Relevant Period and did not sell until after the June 12, 2014, announcement, despite the increase in Amaya’s share price during the period creating opportunities to realize a profit”: Merits Decision, at para. 203(h)(i). While Mr Vannatta’s three Amaya purchases were within the Relevant Period, the first purchase preceded Kitmitto’s participation in the April 29 meeting with Amaya management. Therefore, Mr. Kitmitto says that the timing of Mr. Vannatta’s purchases do not uniformly support the finding that his trading was based on MNPI.

[88] I do not agree with Mr. Kitmitto’s analysis. Mr. Vannatta bought Amaya on April 29, May 8 and May 14, and held all his shares until after the June 12 transaction announcement, despite a notable increase in the Amaya share price during this period: Merits Decision, paras. 194, 203(h)(i). The finding that the first trade was based on confidential information that did not yet amount to MNPI does not, as Mr. Kitmitto contends, render unreasonable the determination that overall Mr. Vannatta’s trading was timely.

[89] As his fourth submission, Mr. Kitmitto argues that the Tribunal majority ignored their own findings and the evidence regarding Mr. Vannatta’s April 29 Amaya share purchase in concluding that Mr. Vannatta was aware of the transaction announcement delays because of the timing of his subsequent two purchases on May 6 and 14, 2014: Merits Decision, at para. 203(h)(ii). Mr. Kitmitto says that the April 29 purchase undercut the strength of the Tribunal majority’s inference about the import of the timing of the May 6 and 14 purchases. He also argues that no significant news was imparted to Mr. Kitmitto on May 6 or 14 that he could have passed along to Mr. Vannatta before he traded on those days.

[90] I do not agree. The finding that Mr. Vannatta based his April 29 purchase on confidential information from Mr. Kitmitto does not undercut the strength of the Tribunal’s finding that the timing of the subsequent trades supported the inference that Mr. Kitmitto informed him of updates to the announcement date. Even if it did, Mr. Kitmitto fails to explain how this amounts to a reversible error. Mr. Kitmitto’s assertion that no significant news was imparted to Mr. Kitmitto on May 6 or May 14 that he could have passed along to Mr. Vannatta before he traded on those days is irrelevant. I agree with the OSC that it was not logically necessary for Mr. Vannatta to have traded on the same day that Mr. Kitmitto received a timing update in order to establish that Mr. Vannatta was informed of these updates and traded with that information.

[91] For these reasons, I have concluded that the Tribunal majority did not err in holding that Mr. Kitmitto tipped Mr. Vannatta by relying on their finding that Mr. Vannatta’s Amaya trades in May 2014 were “timely”.

[92] In any event, as the OSC notes in its submissions, the Tribunal majority’s finding that Mr. Vannatta’s trading was “timely” was only one of the bases upon which they determined that Mr. Kitmitto tipped Mr. Vannatta. Their tipping determination was also based on findings that: Mr. Vannatta’s trading was uncharacteristic, risky and profitable; Mr. Kitmitto and Mr. Vannatta shared an office and had a close personal and professional relationship; Mr. Kitmitto disclosed the initial confidential information he received about the proposed transaction to Mr. Vannatta; and Mr. Vannatta covered up his Amaya trading from his employer, then lied to OSC staff to try to perpetuate that cover up: see Merits Decision, at paras. 203-5. There was ample other evidence to justify the Tribunal majority’s finding that Mr. Kitmitto tipped Mr. Vannatta.

E. Disposition – Mr. Kitmitto’s merits appeal

[93] For the above reasons, I see no reversible errors with respect to the Tribunal majority’s conclusion that Mr. Kitmitto tipped Mr. Vannatta, Mr. Candusso and Mr. Goss. Accordingly, Mr. Kitmitto’s appeal against the Merits Decision is dismissed.

VI. Mr. Candusso’s appeal

A. Introduction

[94] In the Merits Decision, the Tribunal majority found that Mr. Candusso engaged in insider trading when he purchased Amaya shares while in possession of MNPI about Amaya’s proposed PokerStars transaction obtained from his roommate, Mr. Kitmitto.

[95] Mr. Candusso submits that at the Tribunal hearing, OSC staff did not meet its burden of establishing, based on clear, convincing and cogent evidence, that it was more likely than not that Mr. Candusso engaged in insider trading: see Hutchinson (Re), 2019 ONSEC 36, at para. 56. Mr. Candusso argues that the Tribunal majority erred as follows:

a. Knowledge of Amaya MNPI: drawing the inference that he traded with knowledge of Amaya MNPI;

b. Rejecting evidence on improper basis: relying on improper grounds in rejecting his direct evidence that explained the reasons for his trades; and

c. “Special relationship” with Amaya: finding without evidence that he was in a “special relationship” with Amaya.

B. Knowledge of Amaya MNPI

i. Mr. Candusso’s submissions

[96] Mr. Candusso submits that the Tribunal majority erred in drawing the inference that he traded with knowledge of Amaya MNPI. He says that the circumstantial evidence they relied on was not reasonably capable of supporting that inference. They failed to give any weight to contrary evidence.

[97] As is common in insider trading cases, the evidence against Mr. Candusso was entirely circumstantial. The Tribunal was entitled to draw inferences from circumstantial evidence but was required to do so on a proper factual foundation, not speculation or unfounded assumptions. If circumstantial evidence equally supported two opposing inferences, one in favour of OSC staff’s theory and one in favour of Mr. Candusso’s innocent explanation, Mr. Candusso says that the Tribunal was required to find him not guilty of illegal conduct. The Tribunal was not permitted to simply prefer an inference of unlawful conduct unless OSC staff had met the standard of proof on the balance of probabilities: Hutchinson, at para. 62.

[98] In drawing the inferences that Mr. Kitmitto tipped Mr. Candusso with Amaya MNPI and that Mr. Candusso traded while in possession of MNPI, the Tribunal majority relied on a non-exhaustive set of factors developed in the Tribunal’s jurisprudence to assist in inferring possession of MNPI by a defending party, known as the Suman factors: see Suman (Re), 2012 ONSEC 7, at para. 307; Hutchinson, at para. 121; Azeff (Merits), at para. 45. In the Merits Decision, at para. 160, the Tribunal majority set out those factors:

Prior Commission decisions have set out a non-exhaustive list of characteristics that may suggest knowledge of material facts:

a. timely trades;

b. unusual trading patterns;

c. unusually risky trades, including because they represent a significant percentage of the portfolio;

d. highly profitable trades; or

e. a first-time purchase of the security.

[99] Reflecting consideration of the Suman factors, the Tribunal majority found, at para. 258, that Mr. Candusso’s trading in Amaya shares was “timely, risky, uncharacteristic, and profitable”. The Tribunal majority cited that conclusion as one of the reasons (together with additional considerations set out in paras. 258(a) to (d)) that they did not find “credible” Mr. Candusso’s evidence about “why he bought Amaya shares when he bought them”. They found that it “supports an inference that it was more likely than not that Kitmitto tipped [Mr. Candusso]”.

[100] Mr. Candusso submits that the Suman factors are only guidance principles and not a mechanistic list of requirements. He argues that neither suspicious timing and profitability of a trade, nor an opportunity to receive MNPI, are sufficient, without more, to ground an inference of insider trading. Opportunity to receive MNPI is of limited probative value: “[e]vidence of opportunity, by itself, cannot realistically prove anything more than opportunity”: Walton v Alberta (Securities Commission), 2014 ABCA 273, 580 A.R. 218, at para. 31. Likewise, aside from coincidence, the timing and profitability of a share purchase can be explained by a market movement: Rosborough (Re), 2022 ONCMT 11, at para. 85; Minority Reasons, at para. 513.

[101] Mr. Candusso submits that the circumstantial evidence before the Tribunal did not justify the Tribunal majority’s finding that his Amaya purchases were timely, risky, uncharacteristic, and profitable. He says that the circumstantial evidence before the Tribunal did not justify that conclusion. Mr. Candusso also challenges those findings taking into account (among other things) his general trading patterns and the information about Amaya already circulating in the market prior to the announcement of the PokerStars transaction.

ii. Analysis – knowledge of MNPI

[102] I have concluded that the Tribunal majority did not err in drawing the inference that Mr. Candusso traded with knowledge of Amaya MNPI. I do not agree with Mr. Candusso that the circumstantial evidence they relied on was not reasonably capable of supporting that inference. The errors alleged by Mr. Candusso relate to questions of fact or mixed fact and law, rather than questions of law. Applying the palpable and overriding standard of review, it is not the reviewing court’s function (absent exceptional circumstances not present here) to reweigh and reassess the evidence and substitute a different inference, as Mr. Candusso’s submissions seek: see Vavilov, at para. 125.

[103] In concluding that Mr. Candusso traded while in possession of Amaya MNPI, the Tribunal majority weighed the totality of the evidence and circumstances. It did not examine individual pieces of evidence in isolation, as Mr. Candusso does in his submissions. Where (as here) arguments are advanced that individual items of circumstantial evidence are explained on bases other than guilt, “it is essential” to keep in mind the cumulative effect of all the evidence. As the Court of Appeal stated in R. v. Uhrig, 2012 ONCA 470, at para 13:

Individual items of evidence are not to be examined separately and in isolation, then cast aside if the ultimate inference sought from their accumulation does not follow from each individual item alone. It may be and very often is the case that items of evidence adduced by the Crown, examined separately, have not a very strong probative value. But all the evidence has to be considered, each item in relation to the others and to the evidence as a whole, and it is all of them taken together that may constitute a proper basis for a conviction…. [Emphasis added.] [Citation omitted.]

[104] I see no reversible error in the Tribunal majority’s findings that Mr. Candusso had opportunity to acquire Amaya MNPI or that his trades were timely, uncharacteristic, risky and profitable. Mr. Candusso clearly had the opportunity to acquire Amaya MNPI from Mr. Kitmitto. They were in daily contact as close friends and roommates. As well, I agree with the OSC that the evidence the Tribunal majority relied on, taken as a whole, supports the findings that Mr. Candusso’s trades were timely, uncharacteristic, risky and profitable: see Merits Decision, at paras. 260(b), (c) and (d).

[105] I also see no error in the Tribunal majority’s reliance on these findings to conclude that Mr. Candusso traded while in possession of Amaya MNPI. The opportunity to acquire MNPI together with timely and profitable trades support that inference: Suman, at para. 302. It does not assist the analysis to suggest that the trades were not as timely, uncharacteristic or risky as they hypothetically could have been. That is not a sufficient basis to show that the Tribunal majority’s findings were clearly wrong, unreasonable, or unsupported by the evidence. I am satisfied that the cumulative effect of all the evidence and circumstances reasonably supports the inferences drawn by the Tribunal majority: Uhrig, at para. 13; Finkelstein v. Ontario (Securities Commission), 2018 ONCA 61, 139 O.R. (3d) 166, at para. 101, leave to appeal refused, [2018] S.C.C.A. 98.

[106] I also see no reversible error in the Tribunal majority’s different conclusions for other defending parties (including Mr. Candusso’s father) based on evidence specific to the relevant party. I also see no merit in Mr. Candusso’s submission that the Tribunal majority erred in their consideration of his evidence explaining the reasons for his trading in Amaya shares.

[107] Accordingly, I have concluded that the Tribunal majority did not err in drawing the inference from the circumstantial evidence before the Tribunal that Mr. Candusso traded with knowledge of Amaya MNPI.

C. Rejecting evidence on improper basis

[108] Mr. Candusso submits that the Tribunal majority relied on improper grounds to reject his direct evidence that explained the reasons for his trades. Mr. Candusso says that the Tribunal majority erred in rejecting his evidence of independent research and decision-making based on (i) improved recollection, (ii) stereotypical assumptions, and (iii) unacceptable evidence bootstrapping by improperly basing their rejection of his evidence on their refusal to believe that he would buy Amaya shares without consulting Mr. Kitmitto. While deference is commonly given to decision-makers in their assessments of credibility, Mr. Candusso argues that is not the case when credibility findings are not made on a proper evidentiary foundation but are instead made on wrong legal principles.

[109] Mr. Candusso submits that that the Tribunal majority’s refusal to believe that he would buy Amaya shares without consulting Mr. Kitmitto was not a proper basis for rejecting his evidence of independent research and decision-making.

[110] As explained below, I have concluded that the Tribunal majority did not err by relying on improper grounds to reject Mr. Candusso’s direct evidence explaining the reason for his trading in Amaya shares based on independent research and decision-making. The Tribunal majority did not overlook or ignore Mr. Candusso explanations. They reasonably rejected them and explained why: Merits Decision, at para. 258. That is not a reviewable error: Finkelstein, at para. 101; Quadrexx, at paras. 78, 86-87.

[111] It is well established that credibility findings are the province of the trier of fact and “attract a very high degree of deference on appeal”: R. v Griffin, 2023 ONCA 559, 429 C.C.C. (3d) 231, at para. 81; R. v G.F., 2021 SCC 20, 163 O.R. (3d) 480, at para. 99. In R.E.M. at para. 48, the Supreme Court recognized that “[a]ssessing credibility is not a science” and “warned against appellate courts ignoring the [trier of fact’s] unique position to see and hear the witnesses and instead substituting their own assessment of credibility for the [trier of fact’s].”

[112] Mr. Candusso identifies three grounds that the Tribunal majority gave for rejecting his independent research explanation (addressed further below), but his analysis ignores one of the main reasons the Tribunal majority rejected as uncredible his evidence about why he bought Amaya shares: the totality of the circumstances and the significant evidence of his “timely, risky, uncharacteristic, and profitable trading in Amaya”: Merits Decision, at para. 258.

[113] I agree with the OSC that the Tribunal majority made no error in rejecting as uncredible Mr. Candusso’s denials that he had MNPI in the face of the evidence that his Amaya trading was timely, uncharacteristic, risky, and profitable. In all the circumstances, his denials were not “in harmony with the preponderance of probabilities disclosed by the facts and circumstances”: Springer v. Aird & Berlis LLP (2009), 2009 15661 (ON SC), 96 O.R. (3d) 325 (S.C), para. 14, aff’d 2010 ONCA 287, 100 O.R. (3d) 575. Given the strong circumstantial case against him, the rejection of Mr. Candusso’s uncredible denials and alternative explanations was a proper basis for the finding that the allegations against him had been proven.

i. Improved recollection

[114] Mr. Candusso submits that the Tribunal majority erred in dismissing as implausible his direct evidence explaining the reasons for his trades. As one of the reasons for concluding that his explanation was not credible, the Tribunal majority stated, at para. 258(b):

During his compelled interview in 2016 Christopher [Candusso] had only a cursory memory of the details of articles, blog posts and posters who covered Amaya. During his testimony, however, Christopher had an implausibly detailed recollection of many specific articles, posts and BNN coverage of Amaya.

[115] Mr. Candusso argues that this approach is contrary to well-established legal principles that recognize that defending parties are permitted to refresh their recollection through preparation for the hearing: see R. v. Stinchcombe, 1991 45 (SCC), [1991] 3 S.C.R. 326, at p. 335. Mr. Candusso says that it is improper to draw negative credibility inferences from a defending party’s improved level of testimonial detail that resulted from the legitimate exercise of a procedural right: see R. v. A.K., 2020 ONCA 435, at para. 26. He also says that it is improper to impugn a defending party’s credibility by suggesting that their evidence was tailored as a result of their exercise of procedural rights: R. v. Chacon-Perez, 2022 ONCA 3, 159 O.R. (3d) 481, at para. 114; R. v. G.V., 2020 ONCA 291, 392 C.C.C. (3d) 14, at para. 25.

[116] I see no reversible error in the Tribunal majority’s assessment of Mr. Candusso’s credibility. The trier of fact is entitled to consider inconsistencies between earlier investigative interviews and statements as compared to testimony at trial: R. v. Jorgge, 2013 ONCA 485, 4 C.R. (7th) 170, at para. 13. In contrast to the authorities Mr. Candusso relies on, the impugned testimony was not affected by pre-hearing disclosure or the prior testimony of other hearing witnesses. The Tribunal majority’s finding did not, as Mr. Candusso argues, conclude that he had tailored his evidence to pre-hearing disclosure or prior testimony or otherwise impinge on any procedural rights. Given the evidence before the Tribunal, I see no palpable and overriding error in the Tribunal majority’s finding.

ii. Stereotypical assumptions

[117] Prior to the public announcement of the PokerStars transaction on June 12, 2014, Mr. Candusso first bought Amaya shares on May 8, 2014, when the share price had been steadily rising after a dip in price the previous month following the release of Amaya’s quarterly results: Merits Decision, at para. 258(c). As further justification for finding that Mr. Candusso’s independent research explanation was not credible, the Tribunal majority observed, at para. 258(c), that had Mr. Candusso been trading based on public information (rather than an illegal tip received from Mr. Kitmitto), it would have made more sense for Mr. Candusso to have bought Amaya stock at an earlier time (when the price was lower) rather than on May 8, 2014 (when the market price had been steadily rising).

[118] Mr. Candusso submits that it was improper to reject his evidence based on unfounded stereotypical assumptions about when an investor may purchase shares based on movement in the share price: see Merits Decision, at para. 258(c). Mr. Candusso says that it is an error of law for a trier of fact to judge the credibility of a witness on the basis of generalizations or upon matters that were not in evidence: see R. v. S. (R.D.), 1997 324 (SCC), [1997] 3 S.C.R. 484, at para. 129; R. v. Kodwat, 2017 YKCA 11, at para. 41; R. v. Quartey, 2018 ABCA 12, 430 D.L.R. (4th) 381, at para. 73, aff’d 2018 SCC 59, [2018] 3 S.C.R. 687; Quantum Dealer Financial Corporation v. Toronto Fine Cars and Leasing Inc., 2023 ONCA 256, 481 D.L.R. (4th) 137, at paras. 75-77.

[119] I do not agree with Mr. Candusso’s analysis.

[120] The Tribunal majority’s conclusion was based in evidence, not stereotyping. The stereotype or generalization Mr. Candusso alleges on appeal is that he, as a retail investor, would seek to buy low and sell high. It is different in nature to the stereotyping of sexual abuse victims in some of the authorities on which he relies. Unlike in Quantum, it is not an undue generalization based on highly technical/specialized knowledge. Rather, it is a basic, common sense, premise of investing in stocks for both industry and retail investors (except when “selling short”).

[121] In any event, the Tribunal majority based its conclusions on Mr. Candusso’s evidence and trading behaviour, and not any general observations of typical investor behaviour: for example, see Merits Decision, at para. 255.

iii. Evidence bootstrapping

[122] Mr. Candusso submits that that the Tribunal majority’s refusal to believe that he would buy Amaya shares without consulting Mr. Kitmitto was not a proper basis for rejecting his evidence of independent research and decision-making: see Merits Decision, at para. 258. He relies on Quantum, at paras. 57-63, which set out the following evidentiary principle: “Evidence that is rejected by the trier of fact has no evidentiary value and cannot be used as a basis for findings of fact”, citing Waxman, at para. 351. In Walton, at para. 104, an insider tipping case, the Alberta Court of Appeal stated that it was it was “bare speculation” to turn a “disbelieved denial into proof positive” in the absence of any evidence of the denied conversation. In addition to his own direct evidence of independent research and decision-making, Mr. Candusso also relies on Mr. Kitmitto’s evidence that he did not know about Mr. Candusso’s trades or even how active a trader he was.

[123] Once again, I do not agree there was any reversible error.

[124] At para. 258(a), the Tribunal majority provided an explanation for their finding that Mr. Candusso’s explanation for his Amaya trades was not credible, given the following circumstances: he made a significant purchase of Amaya shares, with borrowed funds, shortly before the announcement of a significant transaction, a fact known to his close friend and roommate who covered the stock and had been the one to tell him about Amaya in the first place. Given the strong circumstantial case against Mr. Candusso otherwise outlined in the Merits Decision, the Tribunal majority justifiably considered those circumstances as providing additional support for the inference that it was more likely than not that the explanation for the share purchase was that Mr. Kitmitto tipped Mr. Candusso, rather than independent research and decision-making. I see no error in their doing so.

D. “Special relationship” with Amaya

[125] Mr. Candusso submits that the Tribunal majority erred in finding that he was in a “special relationship” with Amaya. Mr. Candusso argues that there was no evidence that he received Amaya MNPI from a person that he knew was in a special relationship with Amaya.

[126] Since Mr. Candusso does not otherwise have a relationship or close connection with Amaya, Mr. Candusso would be a person in a special relationship with Amaya if he learned Amaya MNPI from another person that he “knows or ought reasonably to have known” was a person in special relationship with Amaya: Securities Act, s. 75(5)(e). Mr. Kitmitto would be a person in a special relationship with Amaya if he was engaging in (or proposed to engage in) any business or professional activity with or on behalf Amaya or learned of Amaya MNPI while engaged in such activity: s. 75(5)(b) and (d).

[127] Mr. Candusso says that based on the definition of a person in a “special relationship” with an issuer, the onus was on OSC staff to prove, based on clear and cogent evidence, that he knew or ought reasonably to have known that Mr. Kitmitto learned of the Amaya acquisition while he was engaged in a business or professional activity with or on behalf of Amaya. Mr. Candusso argues that no such evidence exists in this case.

[128] Mr. Candusso submits that knowledge of a tipper’s relationship with the issuer can be a matter of inference, but any such inference must reasonably flow from facts that are proved in evidence: Cheng (Re), 2019 ONSEC 8, at para. 74. Mr. Candusso says the Tribunal majority’s reasons in support of finding that he knew or out reasonably to have known that Mr. Kitmitto was in a special relationship with Amaya were scant and incapable of appellate review, being limited to one paragraph, para. 261:

We also find, based on the above evidence, that Christopher [Candusso] was in a special relationship with Amaya. We conclude that Staff has established both the “information connection” (Christopher learned about the Amaya MNPI from Kitmitto, who was in a special relationship with Amaya) and the “person connection” (Christopher knew or ought reasonably to have known that Kitmitto was in a special relationship with Amaya), given:

a. Christopher’s close, personal relationship with Kitmitto;

b. the opportunities that resulted from their relationship and their living arrangements for Christopher to learn about the Acquisition from Kitmitto; and

c. the timely, uncharacteristic, risky, and profitable nature of Christopher’s trading in Amaya shares.

[129] Mr. Candusso submits that none of these three factors listed above, either individually or in totality, support an inference that he knew that Mr. Kitmitto was a person in a special relationship with Amaya. Mr. Candusso says that the Tribunal majority failed to engage in the “careful analysis” that previous case law indicates should be applied to determinations of special relationship, given the potentially serious consequences for the defending parties: see Hutchinson, at paras. 125, 127, 136.

[130] I disagree. Mr. Candusso’s analysis ignores the opening words of para. 261, in which the Tribunal majority makes its “special relationship” finding relating to Mr. Candusso and Mr. Kitmitto as being “based on the above evidence”. The Tribunal majority explicitly incorporated by reference its substantial multi-page earlier analysis of evidence to support the conclusion that Mr. Kitmitto communicated Amaya MNPI to Mr. Candusso and Mr Candusso traded while in possession of MNPI. The Tribunal majority did not err in doing so: R.E.M., at paras. 25, 37.

[131] The factors that indicate a person possessed MNPI overlap considerably with those indicating that a person is in a special relationship with the issuer: Hutchinson, at para. 128. Accordingly, Mr. Candusso’s challenge to the finding that he was in a special relationship with Amaya fails on a similar basis as the finding that he possessed Amaya MNPI.

[132] In addition, there was no dispute that Mr. Kitmitto’s position at Aston Management placed him in a professional environment where investments are assessed and transactions discussed. Mr. Candusso “knew that Kitmitto worked as an analyst for Aston Asset Management, which he understood to mean that Kitmitto researched different companies in the gaming and tech industry and provided recommendations to fund managers”: Merits Decision, at para. 249. The evidence also indicated that Mr. Candusso knew that Mr. Kitmitto covered Amaya and knew more about Amaya than Mr. Candusso. The cumulative effect of the evidence, together with the overlapping factors establishing Mr. Candusso’s possession of MNPI, is a reasonable basis for the Tribunal majority’s finding that Mr. Candusso knew or ought to have known that Kitmitto was in a special relationship with Amaya.

[133] Accordingly, I have concluded that the Tribunal majority did not err in finding that Mr. Candusso was in a “special relationship” with Amaya.

E. Disposition – Mr. Candusso’s appeal

[134] For the above reasons, I see no reversible errors with respect o the Tribunal majority’s conclusion that Mr. Candusso engaged in insider trading when he purchased Amaya shares while in possession of Amaya MNPI obtained from Mr. Kitmitto. Accordingly, Mr. Candusso’s appeal is dismissed.

VII. Mr. Goss’ merits appeal

A. Introduction

[135] The Tribunal majority found that Mr. Kitmitto, an investment analyst with Aston Asset Management, tipped MNPI to Mr. Goss, an investment advisor with Aston Securities, relating to Amaya’s proposed PokerStars transaction. The Tribunal majority also found that while in possession of Amaya MNPI, Mr. Goss (i) engaged in insider trading of Amaya shares, contrary to s. s. 76(1) of the Securities Act, (ii) tipped Amaya MNPI to his colleague Mr. Fakhry contrary to s. 76(2), and (iii) engaged in conduct abusive of the capital markets by recommending Amaya to 15 of his clients. In the Minority Reasons, adjudicator Zordel found that OSC staff had not established the allegations against Mr. Goss.

B. Mr. Goss’ submissions

[136] Mr. Goss submits that in the Merits Decision, the Tribunal majority erred in law and principle by misapprehending and misapplying the law relating to tipping and insider trading, including the law related to burden of proof and how inferences of fact may be drawn. Mr. Goss also submits that the Tribunal majority made palpable and overriding errors in their findings of fact. Given those significant errors, Mr. Goss argues that Tribunal majority’s Merits Decision (together with the Sanctions Decision) should be set aside and the Statement of Allegations against Mr. Goss dismissed.

[137] Mr. Goss submits that the Tribunal majority erred in finding that Mr. Kitmitto tipped Mr. Goss. There was no direct evidence that Mr. Goss was tipped. Mr. Goss says that neither the timing and nature of his trades nor the timing and nature of his communications suggest that he was tipped. Rather, the direct and circumstantial evidence demonstrated that Goss had good reason to trade Amaya shares, that his trading and communications did not line up with the exploitation of anything other than public information, and that if he had been exploiting MNPI, he would actually have conducted himself very differently.

[138] Mr. Goss argues that the Tribunal majority erred in ignoring exculpatory evidence and instead drawing the inference that Mr. Kitmitto tipped Mr. Goss based on OSC staff’s submissions relating to “culture” and opportunity. Mr. Goss says that the Tribunal majority erred in principle in accepting OSC staff’s submission that there was a Non-compliance Culture at Aston Financial because that finding was based on certain admissions made in settlement agreements with other Aston Financial officers. The Tribunal majority had already found that it put no weight on such an admission: Merits Decision, at para. 113.

[139] Mr. Goss also says that the Tribunal majority made a palpable and overriding error in its finding that Mr. Kitmitto had a Cavalier Attitude to compliance: see Merits Decision, at para. 285, in which the Tribunal majority referred to “our earlier finding that Kitmitto had a lax attitude toward compliance.” Mr. Goss submits that the Tribunal majority did not indicate what evidence it relied on to support that finding.

[140] Mr. Goss also argues that the opportunity to pass MNPI because of the free movement between the offices of Aston Asset Management and Aston Securities and interactions between their personnel is nothing more than opportunity. It does not rise to the level of clear, convincing and cogent evidence required for OSC staff to meet its burden of proof in insider trading and tipping cases: Hutchinson, at para. 56; Walton, at para 31. Mr. Goss submits that the Tribunal majority erred in equating opportunity with culpability.

[141] Mr. Goss also submits that the Tribunal majority erred in law and principle in concluding that Mr. Goss engaged in insider trading by ignoring relevant evidence that directly contradicted their findings. Mr. Goss testified that he was not aware of Amaya’s proposed PokerStars transaction until it was publicly announced on June 12, 2014. Mr. Goss says that the Tribunal majority erred by failing to consider (i) his trading pattern, (ii) whether his trades were well-timed, highly uncharacteristic, risky, or high profitable in the context of that pattern, and (iii) the publicly available events or news about Amaya during the Relevant Period. Mr. Goss submits that the evidence relating to each of those factors supported his direct evidence that he was not aware of the proposed PokerStars transaction before it was publicly announced.

[142] Mr. Goss points out that he began actively trading and recommending Amaya commencing April 10, 2014, before the commencement of the Relevant Period or the date Mr. Kitmitto obtained Amaya MNPI: Merits Decision, at paras. 288-303. He submits that he was clearly trading on the basis of his own research and awareness of public information, and that the Tribunal majority completely glossed over this important evidence and erred in its findings, including the finding (at para. 295) that his trading was “opportunistic and therefore consistent with his having been tipped about the Amaya MNPI”. He also says that, unlike the Minority Reasons, at para. 607, the Tribunal majority failed to conduct a detailed analysis of the timing of his trades, recommendations and communications with clients and other activities.

[143] Mr. Goss further submits that in finding that he engaged in insider trading, the Tribunal majority also failed to consider the extensive publicly available positive information, news and rumours relating to Amaya in the period from October 2013 until the announcement of the PokerStars transaction in June 2014. Mr. Goss says that his trading and communications lined up with this public information, as recognized in the Minority Reasons, at para. 607.

[144] Mr. Goss also submits that the Tribunal majority further erred in its finding that Mr. Goss tipped Mr. Fakhry, his close colleague and administrative assistant at Aston Securities. Mr. Goss says that the Tribunal majority, at paras. 315-17, erred in law by dismissing Mr. Fakhry’s explanation for his Amaya trading and recommendations as “contrived … after the fact”, since it was contrary to previous case law that states that there is nothing wrong with a witness refreshing their memory from a previous statement or document (Stinchcombe, at p. 335) and that it is improper to impugn an accused’s credibility on the basis that they tailored their evidence to disclosure they receive or testimony they heard (G.V., at paras. 24-26).

B. Analysis: Mr. Goss’ merits appeal

[145] I have concluded that the Tribunal majority did not err in law or principle by misapprehending or misapplying the law relating to tipping or insider trading, including the law relating to burden of proof and how inferences of fact may be drawn. I have also concluded that the Tribunal majority did not err by making palpable and overriding errors in their findings of fact or mixed fact and law.

[146] In the Merits Decision, the Tribunal majority rejected Mr. Goss’ position that he traded on public information rather than Amaya MNPI. Goss reasserts that position on appeal but does not adequately address findings and evidence that contradict his position. Notably, the Tribunal majority relied on numerous communications indicating that Mr. Goss had knowledge of specific details of the proposed transaction from Mr. Kitmitto and that he passed them on to Mr. Fakhry. The Tribunal majority found that Mr. Goss could not plausibly explain these communications at the hearing and he largely ignores them in his appeal.

[147] Mr. Goss characterizes the alleged errors as errors on questions of law reviewable on a correctness standard. To the contrary, the alleged errors relate to questions of fact or mixed fact and law subject to the palpable and overriding error standard. Mr. Goss has not met that standard. In addition to ignoring key findings and evidence supporting those conclusions, Mr. Goss refers to findings in the Minority Reasons without showing reversible error in the Tribunal majority’s contrary conclusions.

i. No error in consideration of Non-compliance Culture and Cavalier Attitude

[148] I do not agree that the Tribunal majority erred in finding that Mr. Goss traded on a tip from Mr. Kitmitto. In particular, I see no basis for his submission that in making the finding that there was a Non-compliance Culture at Aston Financial, the Tribunal majority erred by improperly relying on certain admissions made in settlement agreements with other Aston Financial officers. That submission is contradicted by the Tribunal majority’s holding, at para. 113, that they put no weight on such an admission. Mr. Goss’ submission is also inconsistent with the Tribunal majority’s finding, at para. 285, in which they refer to four factors underlying their Non-compliance Culture finding set out in the balance of that paragraph (after the words “apparent from”), as follows:

We find it more likely than not that Kitmitto shared the Amaya MNPI with Goss based on the culture at Aston Asset Management and Aston Securities, apparent from the lack of separation between the two offices, Goss’s regular movement between the offices, the close connection between Goss and Kitmitto created by working on and investing in private deals, and our earlier finding that Kitmitto had a lax attitude toward compliance. [Emphasis added.]

[149] I also see no merit in Mr. Goss’ submission that the Tribunal majority did not indicate what evidence it relied on to support its finding (in para. 285) about Mr. Kitmitto’s Cavalier Attitude toward compliance. The reference in that paragraph to their “earlier finding” about Mr. Kitmitto’s “lax attitude toward compliance” clearly referred back to their finding that “Kitmitto had a cavalier attitude towards the handling of confidential information”: Merits Decision, at para. 196. That finding was based on: (i) Mr. Kitmitto’s sharing admittedly confidential information about Amaya with Mr. Vannatta (at paras. 197-98), and (ii) Mr. Kitmitto’s instruction to buy Amaya shares for the Aston Asset Management funds with knowledge of that information, which the Tribunal majority found showed that Mr. “Kitmitto’s attitude towards compliance lacked rigour” (at para. 202). Mr. Goss fails to show how it amounts to a palpable and overriding error to find that disclosing confidential information about an issuer and instructing a trade in that issuer’s securities with that information reflects a “lax attitude towards compliance”.

ii. No error in consideration of opportunity

[150] I also see no merit in Mr. Goss’ submission that the Tribunal majority improperly equated opportunity with culpability. At para. 306, the Tribunal majority made clear that “opportunity to acquire knowledge of MNPI is not, in and of itself, sufficient to establish that tipping occurred.” The Tribunal majority then correctly went on to find that “knowledge can be inferred based on ‘circumstantial evidence of opportunity to acquire knowledge of a material undisclosed fact, combined with evidence of well timed and profitable trades’”, citing Agueci (Re), 2015 ONSEC 2, at para 68. The Tribunal majority ultimately concluded, at paras. 305-6, that Mr. Kitmitto tipped Mr. Goss based on: (i) Mr. Goss’ opportunity to learn about the Amaya MNPI from Mr. Kitmitto; (ii) Mr. Goss’ timely and profitable trading in Amaya; (iii) Goss’ clients’ timely and profitable trading in Amaya; and (iv) Mr. Goss’ apparent knowledge of specific details about the Acquisition and its timing. All these factors were supported by the record. The Tribunal majority made no error in relying on them, cumulatively, to conclude that Mr. Kitmitto tipped Mr. Goss and that (as further explained below) he traded on that information.

iii. No error in consideration of Mr. Goss’ trading

[151] I do not agree that the Tribunal majority erred in finding that Mr. Goss engaged in insider trading.

[152] In arguing that his Amaya trading was inconsistent with his possession of MNPI, Mr. Goss merely offers a different interpretation of the evidence without demonstrating reversible error in the Tribunal majority’s conclusions. Mr. Goss mischaracterizes the Tribunal majority’s decision and ignores key findings and evidence. Mr. Goss also points to different findings from the Minority Reasons but does not demonstrate palpable and overriding error with the Tribunal majority’s findings.

[153] Contrary to Mr. Goss’ contention, the Tribunal majority did not completely gloss over his pre-April 29 Amaya trading. His active trading and recommending of Amaya shares commencing April 10, 2014 was considered in detail in the Merits Decision, at paras. 288-303. The Tribunal majority, at para. 292, found a “marked difference” between the pre- and post-April 29 period in Mr. Goss’ trading for himself, his family and his clients. Mr. Goss shows no error in this finding, which is supported by the evidence: see Merits Decision, at paras. 290, 292. Mr. Goss also demonstrated no palpable and overriding error in finding that his trading was timely and opportunistic, which supported the inference that Mr. Goss traded with knowledge of Amaya MNPI from Mr. Kitmitto: Merits Decision, at para. 292, 305(d).

iv. No error in consideration of public information about Amaya

[154] As noted above, Mr. Goss fails to show that the Tribunal majority ignored evidence of public information or rumours about Amaya. The Tribunal was not required to mention every piece of evidence and the absence of explicit mention of a particular piece of evidence does not mean it was ignored: R.E.M., at paras. 25, 37, 52-57. It is clear from the decision that the Tribunal majority considered (and rejected) the appellants’ arguments that they traded on public information and rumours. As explained further below, the Tribunal majority repeatedly found that the appellants’ claims to be trading on public information did not square with other evidence or with common sense and found numerous instances in which communications relating to Mr. Goss and Mr. Fakhry revealed their knowledge of details about the proposed PokerStars transaction that were not in the public domain at the time. For example,

a. The Tribunal majority found that Mr. Goss’ email conversation with a client on May 22, 2014 about Amaya and another company in which Mr. Goss told the client it was “all going to happen at the same time” indicated that Mr. Goss was aware of confidential information about the timing of the proposed transaction. That was in part because “[o]n May 22 there were no rumours about an Amaya transaction or an announcement:” Meris Decision, at paras. 297-98.

b. The Tribunal majority rejected Mr. Goss’ claim that when he told his client he was “looking for $20” on Amaya (then trading at $10.65) he was basing this target on public information. They assessed Mr. Goss’ claim against the information then in the public domain and determined that Mr. Goss’ explanation was not plausible: Merits Decision, at para. 301. Rather than engage with this finding, Mr. Goss repeats his failed hearing argument about this communication.

c. Similarly, the Tribunal majority rejected Mr. Fakhry’s claim that Amaya’s May 2 press release motivated him to start buying Amaya on May 2. They found this claim was inconsistent with contemporaneous records and noted Mr. Fakhry’s shifting attempts to reconcile his explanation with those records: Merits Decision, at paras. 316-17.

d. The Tribunal majority also rejected Mr. Fakhry’s explanation of his comment that “[m]aybe 20 [dollars] is not out of reach” in his May 24 email to Mr. Goss because the explanation did not make sense and because Mr. Fakhry conceded he had not seen any reference in public sources to a $20 share price connected with the proposed transaction: Merits Decision, at para. 320(e)(i).

e. The Tribunal majority found that Mr. Goss’ May 28 email to Mr, Fakhry stating “I hear AYA news is next week” followed by an exchange about the “long wait” for the Amaya news supported the inference that Mr. Kitmitto had tipped Mr. Goss who had tipped Mr. Fakhry. This conclusion was based in part on the absence of any “publicly available information on May 28, 2014 suggesting that a transaction involving Amaya was imminent”: Merits Decision, at para. 320(e)(ii).

f. The Tribunal majority also rejected Mr. Fakhry’s claim that his June 11 statement to a client that there were rumours that Blackstone was involved in the proposed transaction was based on public information: Merits Decision, at para. 320(e)(iv). The Tribunal majority reviewed the evidence of information in the public domain at the time (which did not include any suggestion of Blackstone’s involvement) and contrasted this with the references to Blackstone’s involvement contained in the Amaya MNPI provided to Mr. Kitmitto on April 29: Merits Decision, at para. 320(e)(iv).

[155] Contrary to Mr. Goss’ submissions, these findings demonstrate that the Tribunal majority considered, and reasonably rejected, the claims of Mr. Goss’ and Mr. Fakhry that they were trading on public information.

v. No error in consideration of finding Mr. Goss tipped Mr. Fakhry

[156] At para. 322, the Tribunal majority held there was “overwhelming circumstantial evidence” supporting the conclusion that Mr. Goss tipped Mr. Fakhry and that Mr. Fakhry knew Mr. Kitmitto was the source of the MNPI. That evidence included: (i) the timely, first time, trading in Amaya by Mr. Fakhry; (ii) the timely Amaya trading by six of his eight clients; (ii) the risky and profitable nature of Mr. Fakhry’s trading; and (iv) communications demonstrating that Mr. Fakhry “possessed specific information about the [PokerStars] Acquisition”, including communications between Mr. Goss and Mr. Fakhry; and (v) communications between Mr. Fakhry and Mr. Kitmitto that showed Mr. Fakhry knew Mr. Kitmitto was the source of the information Mr. Fakhry received from Mr. Goss: Merits Decision, at paras. 319-21.

[157] Instead of challenging these components underlying the Tribunal majority’s conclusion, Mr. Goss takes issue with two preliminary findings in which the Tribunal majority rejected aspects of Mr. Fakhry’s evidence, conflates the two findings, and demonstrates no error with either finding.

[158] The two findings at issue are that: (i) Mr. Fakhry’s testimony about a supposed April 11 research assignment from Mr. Goss (that allegedly resulted in Mr. Fakhry providing Mr. Goss with two articles that referred to both Amaya and PokerStars) was not plausible; and (ii) Mr. Fakhry’s claim that he was motivated to start buying Amaya by its May 2 press release was not credible: Merits Decision, at paras. 315-18.

[159] In relation to the first finding, the Tribunal majority, at para. 315, identified five reasons why Mr. Fakhry’s testimony was not “plausible” because it did not make sense or was inconsistent with other evidence, then concluded the testimony was a “contrived”, “after the fact” explanation. Mr. Goss fails to explain how this amounted to a finding that Mr. Fakhry “tailored his evidence to the disclosure he received or the testimony he heard”: R.E.M., at paras. 24-26. The Tribunal majority made no such finding. On the evidence before them, it was open to the Tribunal majority to reject Mr. Fakhry’s testimony as implausible and contrived.

[160] Regarding Mr. Fakhry’s claim that Amaya’s May 2 press release motivated him to start trading, the Tribunal majority found that this claim did not square with contemporaneous records, noted that Mr. Fakhry had provided different explanations for that inconsistency, which included a factual inaccuracy, and rejected the claim as not credible: Merits Decision, at para. 316-18. It was open to the Tribunal majority to make that determination.

[161] Mr. Goss’ reference to the memory refreshing process and his claim that the defending parties may provide more detailed evidence in the hearing than during a compelled interview has no application to this finding. The Tribunal majority did not contrast Mr. Fakhry’s hearing claim with his prior compelled OSC interview. Rather, they contrasted Mr. Fakhry’s hearing claim with contemporaneous records: Merits Decision, at paras. 316-18. Those records included email and phone records as well as records of interviews with Mr. Fakhry during an Aston Securities internal review shortly after the transaction announcement. At that time, Mr. Fakhry made no mention of the May 2 press release to explain for his Amaya share purchases: Merits Decision, at para. 317. In any event, it is open to the trier of fact to consider inconsistencies (and make a negative credibility finding) where a witness provides different accounts at different times about the same events: see Jorgge, at para. 13.

[162] Accordingly, Mr. Goss demonstrates no error with either of the findings he challenges. However, even without those findings, it was open to the Tribunal majority to conclude that Mr. Goss tipped Mr. Fakhry and that Mr. Fakhry knew Mr. Kitmitto was the source of the MNPI, based on the “overwhelming circumstantial evidence” supporting the conclusion: see Merits Decision, at paras. 319-22. The Tribunal majority made no reversible error in doing so.

C. Disposition – Mr. Goss’ merits appeal

[163] For the foregoing reasons, I see no reversible errors with respect to the Tribunal majority’s findings that Mr. Goss (i) received Amaya MNPI from Mr. Kitmitto, (ii) traded in Amaya shares with knowledge of Amaya MNPI, thereby engaging in insider trading, and (iii) tipped Amaya MNPI to Mr. Fakhry. Accordingly, Mr. Goss’ appeal of the Merits Decision is dismissed.

VIII. Sanctions appeal

A. Introduction

[164] In the “Sanctions Decision”, the Tribunal imposed sanctions against the five culpable defending parties, consisting of market participation bans, administrative monetary penalties, disgorgement (except for Mr. Kitmitto, who did not profit from his conduct), and costs. Mr. Kitmitto and Mr. Goss ask the court to vary the Sanctions Decision by imposing less onerous penalties and costs against them.

[165] Mr. Kitmitto asks the court to (i) reduce the duration of the market participation bans from ten to seven years, and (ii) reduce the administrative penalty from $600,000 to $90,000, in each case consistent with Mr. Kitmitto’s submissions at the Tribunal sanctions hearing: Sanctions Decision, at para. 36. He also seeks a reduction in the costs award from $147,075 to $110,306.40, being 15 percent (rather than 20 percent) of the total costs ordered.

[166] Mr. Goss asks the court to (i) reduce the duration of the market participation bans from 15 to ten years, and (ii) reduce the administrative penalty from $1,000,000 to $400,000. He also seeks a reduction in the costs award from $183,844 to $147,075, being 20 percent (rather than 25 percent) of the total costs ordered. Consistent with his submissions at the Tribunal sanctions hearing, he further asks that the market participation bans be varied in two respects. He seeks to ease the restrictions on his ability to trade in securities for his own account. He also seeks removal of the ban prohibiting him from being a corporate director, officer or promoter. Mr. Goss does not challenge the substantial profit disgorgement ordered against him.

[167] For the reasons below, I would dismiss the appeals by Mr. Kitmitto and Mr. Goss against the Sanctions Decision.

B. Standard of review: sanctions

[168] The standard of review that applies on appeal of a tribunal’s penalty decision or costs award is one of considerable deference.

[169] An appeal court will interfere with a tribunal’s penalty decision only if the tribunal made an error in principle or the penalty is clearly unfit: College of Physicians and Surgeons of Ontario v. Peirovy, 2018 ONCA 420, 143 O.R. (3d) 596, at para. 38. A penalty will be clearly unfit where the decision does not fall within “a range of possible, acceptable outcomes which are defensible in respect of the facts and law”: Peirovy, at para. 38, citing Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para. 47.

[170] An appeal court will interfere with a tribunal’s costs award only if the tribunal made an error in principle or was plainly wrong: Kennedy v. College of Veterinarians, 2018 ONSC 3603 (Div. Ct.), at para. 24, citing Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

C. Parties’ positions and analysis

[171] Mr. Kitmitto and Mr. Goss both submit that the penalties and costs imposed against them were neither appropriate nor proportionate. Both of them argue that the sanctions imposed offend the principle that the sanctions are required to be protective, not punitive: see Mithras Management Ltd (Re) (1990), 13 OSCB 1600, at p. 1611; Azeff (Re), 2015 ONSEC 29 (“Azeff (Sanctions)”)[^3], at para. 7. They say that the sanctions imposed were not consistent with the objectives of the Securities Act, under which the Tribunal may impose sanctions in order to protect investors and foster confidence in securities markets, rather than punishing past behaviour: Azeff (Sanctions), at para. 5.

[172] Both of them challenge the methodology in calculating the administrative penalties. Mr. Kitmitto says that the Tribunal erred in establishing a baseline penalty of $200,000 per breach, without explaining how previous case law supported such a significant amount in his circumstances. Among other things, he submits that on facts comparable to his in Ageuci (Sanctions), an administrative penalty of $90,000 per breach was imposed. For comparison purposes, Mr. Kitmitto also refers to the Tribunal’s sanctions decision in Cheng (Re), 2015 ONSEC 19 (“Cheng (Sanctions)”), arguing that the administrative penalty imposed on Mr. Cheng was much lower than his penalty, even though there were other aggravating factors applicable to Mr. Cheng that did not apply to Mr. Kitmitto. For his part, Mr. Goss submits that the Tribunal erred in departing from the $200,000 per breach baseline amount and imposing a much larger administrative penalty of $1 million on him without adequate justification.

[173] Both Mr. Kitmitto and Mr. Goss also submit that the Tribunal erred by failing to consider and give effect to individual considerations and mitigating circumstances. Among other things, Mr. Kitmitto says that the penalties imposed did not reflect his youth and relative inexperience, his relatively junior role, his status as a non-registrant, the fact that he was a first-time offender, and the fact that he did not personally profit from his conduct (unlike the other culpable defending parties).

[174] In Mr. Goss’ case, he argues (among other things) that the penalty did not appropriately reflect his otherwise unblemished record as a registrant since 1993, including during the eight years between the offending conduct in 2014 and the Sanctions Decision, when he traded in securities for himself and clients without incident. He also notes that OSC staff only made out certain of the allegations against him and that, unlike certain other culpable defending parties, he was not alleged to have misled OSC staff during the investigation. As previously noted, he also seeks to ease the restrictions on his ability to trade in securities for his own account and challenges the ban on his acting as a corporate director, officer or promoter in the absence of any connection between those roles and his offending conduct.

[175] As noted previously, Mr. Kitmitto and Mr. Goss also challenge the allocation of costs among the culpable defending parties. Each submits that he should be required to pay a lower percentage of the costs, in line with their submissions in favour of reduction of the penalties imposed on them.

[176] I see no merit in the penalty and costs submissions of Mr. Kitmitto and Mr. Goss.

[177] The Supreme Court of Canada has recognized that the Tribunal has “very wide discretion” to intervene in the public interest, including when imposing sanctions designed to prevent likely future harm to Ontario’s capital markets: Committee for the Equal Treatment of Asbestos Minority Shareholders v Ontario (Securities Commission), 2001 SCC 37, [2001] 2 S.C.R. 132, at paras. 39-45; see also Cartaway Resources Corp (Re), 2004 SCC 26, [2004] 1 S.C.R. 672, at paras. 45, 63. The circumstances in which an appellate court may interfere with the exercise of that discretion are very limited. The weight given to any individual sanctioning factor will vary from case to case and falls within the Tribunal’s discretion. No one factor should be considered in isolation “because to do so would skew the textured and nuanced evaluation conducted by the Commission in crafting an order in the public interest”: Cartaway, at para. 64.

[178] The arguments of Mr. Kitmitto and Mr. Goss relating to penalty and costs do not meet the high bar for appellate intervention. In large measure, they repeat the submissions they made before the Tribunal at the sanctions hearing, which the Tribunal considered and rejected after due consideration.

[179] I do not agree that the penalties the Tribunal imposed are properly characterized as punitive. The Tribunal, at para. 6, correctly enunciated its preventive (rather than punitive) role when imposing sanctions, noting that its role “is not to punish past conduct, but to restrain “future conduct that is likely to be prejudicial to the public interest in having capital markets that are both fair and efficient”, citing Mithras Management Ltd (Re) (1990), 13 OSCB 1600, at p. 1611. The Tribunal, at para. 7, also recognized that the sanctions must be appropriate and proportionate to the circumstances of each respondent, emphasizing again that punishment is not a permissible goal of sanctions: see Azeff (Sanctions), at paras. 7, 10. After careful consideration of the circumstances of the culpable defending parties, both collectively and individually, the Tribunal imposed the sanctions outlined previously and explained the reasons for doing so. I see nothing in the Tribunal’s analysis to suggested that they erred in principle in doing so.

[180] Previous case law has recognized that participation in the capital markets is a privilege, not a right: see Erikson v. Ontario (Securities Commission) (2003), 169 O.A.C. 80 (S.C.), at para. 55, citing Manning v. Ontario (Securities Commission) (1996), 94 O.A.C. 15 (Div. Ct.), at paras. 10-11. Significant market bans, including director and officer bans, are well established market protective measures that have been imposed, and upheld on appeal, in other insider tipping and trading cases: see Azeff (Sanctions)[^4], at paras. 9, 21, 28, 40, 42; Agueci (Sanctions), at para. 87, aff’d 2016 ONSC 6559, 133 O.R. (3d) 81 (Div. Ct.). The Tribunal, at para. 25, amply addressed and justified director and officer bans in this case, having considered Mr. Goss’ submissions to the contrary. I see no basis for appellate intervention.

[181] I also see no basis for concluding that the administrative penalties were punitive. As the Court of Appeal and this court have repeatedly recognized, insider tipping and trading are serious breaches of securities laws that erode public confidence in the capital markets: see Finkelstein, at paras. 22-25; Fiorillo v Ontario (Securities Commission), 2016 ONSC 6559, 133 O.R. (3d) 81 (Div. Ct), at para. 289. In Rowan v. Ontario (Securities Commission), 2012 ONCA 208, 110 O.R. (3d) 492, at para. 49, the Court of Appeal stated that administrative penalties of up to $1 million per infraction (the maximum amount that the Tribunal may impose under s. 127(1)9 of the Securities Act) were entirely in keeping with the OSC’s mandate to regulate the capital markets where (as here) large sums of money are involved and where substantial penalties are necessary to remove economic incentives for non-compliance with market rules. The court recognized that an administrative penalty must not be viewed as “a ‘cost of doing business’ or a ‘licencing fee’ for unscrupulous market participants”: Rowan, at para. 49.

[182] I also see no error in the Tribunal’s methodology in calculating the administrative penalties. As the Tribunal explained at para. 27-28, the $200,000 per breach baseline was determined with due consideration of the seriousness of the misconduct, precedents set by past cases (in particular Azeff (Sanctions), at para. 33, and Agueci (Sanctions), at paras. 38, 40, 45, which respectively ordered $150,000 and $250,000 per illegal tip or trade), and the significant passage of time since those earlier (2015) decisions. The Tribunal, at para. 29-30, then assessed whether any variation from the per-breach benchmark was appropriate for each individual, with due consideration to mitigating and aggravating factors.

[183] As well, I am not persuaded by Mr. Kitmitto’s submission that the sanctions imposed on him were out of line with those imposed in previous cases, notably Agueci (Sanctions) and Cheng (Sanctions). In those cases, there were distinguishing factors that justified a different result, in the exercise of the Tribunal’s discretion: see Agueci (Sanctions), at para. 29; Cheng (Sanctions), at paras. 7, 10. For example, Mr. Cheng acknowledged and admitted his wrongful conduct, cooperated with OSC staff’s investigation and agreed to testify as a witness. In determining penalty, it would be an error in principle to consider as an aggravating factor Mr. Kitmitto’s failure to admit his wrongdoing and cooperate with OSC staff, since to do so would be inconsistent with his right of make full answer and defence: see Sanctions Decision, at para. 15. However, the fact remains that it was open to the panel in Cheng (Sanctions) to consider Mr. Cheng’s admission and cooperation as a mitigating factor in determining penalty, a consideration that was not open to the Tribunal when determining the appropriate sanction for Mr. Kitmitto.

[184] More generally, I do not agree that the Tribunal erred by failing to consider mitigating factors and individual circumstances for sanctions purposes. The Tribunal explicitly considered the facts and circumstances of each offending party, including those highlighted by Mr. Kitmitto and Mr Goss. The Tribunal rejected certain facts and arguments as mitigating in all the circumstances of the case, including after giving due consideration to the factors militating in favour of significant sanctions: see Sanctions Decision, at paras. 8, 17, 30, 33-40 (re Mr. Kitmitto) and 60-71 (re Mr. Goss). It was within the Tribunal’s discretion to do so. Mr. Kitmitto and Mr. Goss have identified no reversible errors of principle associated with the Tribunal’s exercise of its discretion, nor are the penalties imposed clearly unfit.

[185] On a similar basis, contrary to the submissions of Mr. Kitmitto and Mr. Goss, I see no basis for concluding that the Tribunal made an error in principle or was plainly wrong in its exercise of discretion in fixing and allocating costs. At para. 91, the Tribunal explained the rationale for its costs allocation, based on the conduct of the respective parties and the extent to which OSC staff was successful in proving its allegations against them. The Tribunal did not err in doing so.

IX. Disposition

[186] Accordingly, I would dismiss the appeals against both decisions, with costs in the agreed amount of $10,000 payable by each of the appellants to the OSC, the successful party in the appeals.

___________________________ Lococo J.

I agree: ___________________________ R.S.J. Firestone

I agree: ___________________________ Ryan Bell J.

Date: March 14, 2024

CITATION: Kitmitto v Ontario (Securities Commission), 2024 ONSC 1412

DIVISIONAL COURT FILE NO.: 23-045, 23-063 & 23-067

DATE: 20240314

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

RSJ Firestone, Lococo and Ryan Bell JJ.

BETWEEN:

majd kitmitto, christopher candusso and donald Alexander (sandy) goss

Appellants

– and –

ontario SEcurities Commission

Respondent

REASONS FOR JUDGMENT

R. A. LOCOCO J.

Date: March 14, 2024

[^1]: Subsequent amendments to the Securities Act expressly prohibited certain persons (including a person in a special relationship with an issuer) from recommending or encouraging (other than in the course of business) another person to purchase or sell the issuer’s securities with knowledge of an undisclosed material fact or material change with respect to the issuer: see Securities Act, s. 76(3.1).

[^2]: M. Cecilia Williams chaired each of the three-member Tribunal panels that separately heard and decided the Merits Decision and the Sanction Decision. There was no other overlap in the members of those panels.

[^3]: Varied in part (re Cheng) and appeals of Azeff, Bobrow, Finkelstein and Miller dismissed, 2016 ONSC 7508, 135 O.R. (3d) 590 (Div. Ct.), OSC panel findings re Cheng restored and Miller’s appeal dismissed, 2018 ONCA 61, 139 O.R. (3d) 161, leave to appeal dismissed, [2018] S.C.C.A. No. 97; Azeff and Bobrow leave to appeal to ONCA refused M47316 (March 10, 2017), leave to appeal refused, [2017] S.C.C.A. No. 293.

[^4]: For the appeal history of Azeff (Sanctions), see footnote 3.