The appellants appealed a Divisional Court decision upholding an Ontario Securities Commission order that imposed significant administrative monetary penalties (AMPs) for failing to report insider trades and failing to adequately supervise trading.
The appellants argued that the AMP provision of the Securities Act, which allows fines up to $1 million per infraction, violates s. 11(d) of the Charter because its magnitude constitutes a true penal consequence.
The Court of Appeal dismissed the appeal, holding that the constitutionality of an administrative penalty is assessed based on the actual penalty imposed, not the theoretical maximum.
The court found the fines were proportionate to the regulatory goal of deterring non-compliance in capital markets and did not amount to a penal sanction.
The court also upheld the Commission's findings regarding the appellants' failure to supervise and its consideration of the public interest in determining the sanctions.
