Yvonne Chisholm

The Ontario Securities Commission held a hearing to consider whether to impose sanctions against Euston Capital Corp. and George Schwartz based on findings and orders made by securities regulatory authorities in Saskatchewan, Alberta, Manitoba, and British Columbia.

The Commission determined that it had jurisdiction to make a reciprocal order under section 127 and subsection 127(10) of the Securities Act.

The Commission held that subsection 127(10) operates retrospectively because its purpose is to protect the public, not to punish.

Finding that the Respondents' conduct in other jurisdictions would have violated Ontario securities laws and harmed investors, the Commission ordered that the Respondents cease trading in securities for ten years, be prohibited from acquiring securities for ten years, and that Schwartz be prohibited from acting as a director or officer of any issuer for ten years.

The appellant, a former member of the Investment Dealers Association (IDA), challenged the IDA's jurisdiction to discipline him after he ceased to be a member.

The IDA's by-laws permitted discipline of former members for up to five years, and the Ontario Securities Commission upheld this jurisdiction.

On appeal, the Divisional Court applied a reasonableness standard of review and found that the Securities Act only authorizes the regulation of current members.

The court concluded that the IDA's by-law contravened the Act and that the IDA lacked jurisdiction to discipline former members.

The appeal was allowed.

The Requesting Parties sought a hearing and review by the Ontario Securities Commission of the TSX's filing of amendments to the Universal Market Integrity Rules (UMIR) and the Director's acceptance of that filing.

Market Regulation Services Inc. (RS) brought a motion to quash the request, arguing it was moot, premature, and that the RS Hearing Panel had jurisdiction to decide the issues in the first instance.

The Commission held that there was no reviewable decision under sections 8 or 21.7 of the Securities Act, though it retained overriding supervisory jurisdiction under section 21(5).

The Commission declined to exercise its discretion to hear the matter, finding that the application was premature and would unduly fragment the ongoing RS disciplinary proceeding.

The Commission remitted the matter back to the RS Hearing Panel to determine the validity of the UMIR amendments.

The respondent, president of a reporting issuer, failed to file insider reports for 21 trades within the required 10-day period, breaching section 107(2) of the Securities Act.

Staff of the Commission and the respondent entered into a settlement agreement proposing a $5,000 administrative penalty and $3,500 in costs.

The Commission approved the settlement agreement, finding it to be in the public interest, proportionately appropriate, and a sufficient specific and general deterrent.

The applicant, a group retirement plan administrator registered as a mutual fund dealer and portfolio manager, sought an exemption from the requirement to become a member of the Mutual Funds Dealers Association (MFDA).

The applicant argued its business model, which included discretionary trading, was incompatible with MFDA rules and that restructuring would be costly and confusing to clients.

The Commission denied the exemption, emphasizing that investor protection and the benefits of MFDA oversight outweighed the administrative and financial burdens of restructuring.

A temporary exemption was granted to allow the applicant time to apply for MFDA membership.