fine-gavel-courtroom

The Ontario Securities Commission held a hearing yesterday to consider an appeal request from Northern Securities on behalf of the company and its chief executive Victor Philip Alboini.

Northern called for a review of the decisions and findings of an IIROC hearing panel made in May, July and October 2012. In November, IIROC staff handed down a two-year suspension and $625,000 fine to Alboini after finding he’d violated securities regulations in connection with his trading activities.

IIROC’s documents state Alboini “engaged in a trading practice which improperly obtained access to credit for his client…and in doing so risked the capital of both Northern Securities and its carrying broker, thereby engaging in business conduct unbecoming or detrimental to the public interest.”

IIROC also fined the company itself and two other executives in November.

Following the hearings, Alboini launched this appeal and the sanctions were stayed.

Meanwhile, IIROC also ordered Northern to limit its activities to research, mergers and corporate finance in December after its carrying broker announced in November it was planning to close its Canadian operations.

Read: Northern Securities to “limit its activities”

At yesterday’s appeal hearing, one of the primary orders of business for the OSC was reviewing whether it should consider new evidence, including emails from Alboini and findings that Northern says further reflects his credibility.

IIROC’s counsel argued the evidence is neither “new nor compelling” because it was available before IIROC reached its November findings. Further, IIROC’s counsel said the evidence doesn’t sufficiently challenge or impact any of the previous findings.

He added an “appeal is just a peek behind the curtain” to ensure all findings are accurate.

Setting precedent?

Additionally, IIROC says admitting the evidence would mean inviting others to prolong appeal hearings in future with similar requests, adding that revisiting a hearing is “an impractical use of time and resources” that involves “challenging the expertise and decisions of a [regulatory] panel.”

Opposing counsel, led by David Hausman of Fasken Martineau in Toronto, says this case has no time constraints and that it believes new evidence shouldn’t be rejected simply because it might be inconvenient.

Citing several other OSC proceedings that admitted new findings—the 2009 HudBay Minerals case, for example—Hausman said new facts would assist the panel in reaching an accurate and fair decision regarding Northern’s activities.

He added he “recognized the Commission didn’t want to go over all of the evidence [related to the case] once again.” To make the review easier, he said Northern’s counsel “practiced restraint” when incorporating the new evidence.

Additionally, Hausman stressed the OSC has a responsibility to consider all relevant facts and that the panel has the power to reject any evidence that doesn’t meet requirements.

The hearing is ongoing and was scheduled to continue today and on Feb 20, 2013.

The panel for this matter is composed of Commissioners James E. A. Turner and Judith N. Robertson. Appearing on behalf of OSC staff, the litigators are Yvonne Chisholm and Catherine Weiler.

Originally published on Advisor.ca

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