The appellants, former executives of Sino-Forest Corporation, appealed the Ontario Securities Commission's decisions finding they engaged in a massive securities fraud and imposing significant sanctions, including over $11 million in administrative penalties and $64 million in disgorgement.
The appellants argued the Commission failed to properly consider Chinese business and cultural practices (guanxi) when assessing their intent to commit fraud, alleged a reasonable apprehension of bias by the hearing chair, and challenged the sanctions as excessive.
The Divisional Court dismissed the appeal, finding the Commission reasonably concluded that Ontario securities law overrides cultural explanations for illegal conduct, there was no reasonable apprehension of bias, and the sanctions were proportionate to the enormity of the fraud.
