Tyler William Hodgson

The Ontario Securities Commission issued its decision on sanctions and costs following a merits decision that found the respondents contravened the Securities Act by engaging in insider trading and tipping.

The respondents included a mergers and acquisitions lawyer who instigated the tipping scheme and several investment advisors who traded on and further disseminated the material non-public information.

The Commission imposed 10-year trading bans, permanent or 10-year director and officer bans, and 10-year registration bans for the investment advisors.

The Commission also ordered disgorgement of profits totaling $84,698, administrative penalties totaling $2,150,000, and costs of $500,000 apportioned among the respondents based on their respective culpability and involvement in the proceedings.

The respondents Miller, Azeff, and Bobrow brought non-suit motions to dismiss certain allegations of insider trading and tipping at the close of Staff's case.

The Commission dismissed Miller's motions regarding Masonite and Dynatec, but granted his motion to strike an allegation regarding Dynatec as barred by the six-year limitation period.

Bobrow's motion regarding MDSI was granted as Staff failed to make out a prima facie case.

Azeff's motions regarding Dynatec and MDSI were dismissed, as Staff's evidence gave rise to reasonable inferences supporting the allegations.

The applicants sought urgent judicial review of an Ontario Securities Commission decision denying their request to adjourn a hearing.

The adjournment was requested after the applicants' expert lost her work product due to a computer error.

The Divisional Court dismissed the application as premature, applying the general rule that procedural decisions of administrative tribunals should not be reviewed prior to the final determination of the proceeding unless there is a prospect of real unfairness amounting to a denial of natural justice.

The Court found the Commission's conclusion that the expert could be adequately prepared was reasonable.

The moving parties sought an adjournment of a scheduled merits hearing regarding insider trading and tipping allegations, arguing that their expert consultant had lost approximately 600 hours of work product.

Staff opposed the adjournment and brought a cross-motion to sever the matter against one respondent if the adjournment was granted.

The Commission dismissed the adjournment motion, finding that the expert consultant was sufficiently prepared to assist counsel with cross-examinations and that the matter, which had been outstanding for four years, needed to proceed in a timely manner.

The cross-motion for severance was also dismissed.

The appellant challenged an extradition committal order and sought judicial review of the minister's surrender order, alleging that CBSA officials breached statutory and Charter protections during the related immigration process.

The court held that the extradition judge applied the proper abuse of process analysis, including the residual category framework for a stay as a remedy of last resort, and was entitled to consider the impact of the impugned conduct on the fairness of the immigration process as part of the broader administration of justice analysis.

The court rejected arguments that bad faith was confined to deliberate misconduct and found no palpable and overriding error in the extradition judge's factual findings concerning inadmissibility, detention, the redacted s. 44(1) report, and the alleged effort to facilitate extradition through immigration mechanisms.

The application for judicial review and the motion to admit fresh evidence were also dismissed.

Following an appeal concerning a provincial offence, both parties sought costs.

The Court of Appeal declined to award costs to either party.

The court noted that under the Provincial Offences Act, the general rule is that costs are not awarded in provincial offence appeals.

Furthermore, the appeal raised a novel issue of public importance regarding the interpretation of 'occupier', making a costs award inappropriate.

The appellant, a leaseholder of a parcel within a large private property owned by a corporation, was charged with driving an off-road vehicle in the common area without a helmet, contrary to the Off-Road Vehicles Act.

He argued he was exempt from the helmet requirement because he was an 'occupier' of the common area.

The Court of Appeal held that the appellant was not an occupier of the common area, as he did not have physical possession, responsibility for its condition, or control over who could enter it.

The appeal was dismissed and the conviction upheld.

The applicant pharmacy sought judicial review of a decision by the Executive Officer terminating its ability to bill the public drug program due to alleged fraudulent and unsubstantiated claims.

The applicant argued it was denied procedural fairness because it was not given sufficient time to provide evidence addressing the discrepancies.

The Divisional Court held that, given the severe economic consequences to the applicant's business, the duty of fairness required granting the applicant a short additional period to submit supporting evidence.

The application was allowed in part, and the applicant was granted an extension to make further submissions while a stay of the termination remained in place.

Staff of the Ontario Securities Commission alleged that the respondents, K.Y. Ho and Betty Ho, engaged in insider trading contrary to subsection 76(1) of the Securities Act by disposing of ATI shares prior to a public announcement that ATI would fall short of its forecasted revenue and earnings for Q3-2000.

The Commission dismissed the allegations, finding that Staff failed to establish that the revenue shortfall was a known fact at the time the shares were disposed of, and consequently, the respondents could not have had actual knowledge of it.

Furthermore, the Commission held that K.Y. Ho's charitable donations of shares were gifts made in good faith and did not constitute 'sales' for the purposes of the insider trading provisions.

The respondent brought a motion for a nonsuit at the close of Staff's case, arguing that Staff failed to establish a prima facie case of insider trading.

The Commission held that a nonsuit motion is available in its proceedings and exercised its discretion not to put the respondent to an election on whether to call evidence.

Applying the test of whether there is any evidence which, taken at its highest, establishes a reasonable inference in favour of Staff, the Commission found that a prima facie case had been made out.

The motion for a nonsuit was dismissed.

One Commissioner dissented on the issue of election, finding that the respondent should have been required to elect whether to call evidence.