The Ontario Securities Commission (OSC) has granted a stay of a self-regulatory panel’s disciplinary ruling, pending a review.
Douglas John Eley, a rep with Echelon Wealth Partners Inc., was suspended for a year and fined $50,000 by an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel earlier this year.
The sanctions followed a ruling that Eley had violated IIROC rules by “inappropriately altering client documents.”
Eley is seeking a review of the IIROC panel’s rulings, and the OSC has granted a stay of those decisions, pending the review scheduled for Jan. 14 and 15.
In granting the motion, the OSC found that Eley met the conditions for a stay of the sanctions: there’s a serious issue for review; he’d suffer irreparable harm without a stay; and the balance of convenience favours granting the stay.
“Eley faces a real prospect of irreparable damage to his career, income, business and reputation as a registered representative from immediate enforcement of the suspension,” the OSC said in its decision.
Additionally, it ruled that the risk of harm to the public if the stay was granted was outweighed by the risk of harm to Eley if it wasn’t.
“The nature of the conduct at issue in the IIROC decisions, being the alteration of client records, is serious and harms the integrity of the capital markets regulatory regime,” the OSC said. “However, Eley continued to work as an advisor without restriction and without any further incident throughout the almost four-year time period from the commencement of the IIROC investigation to the issuance of the sanctions decision.”
It also said that the IIROC panel acknowledged that the risk of recurrence was low, and that Eley’s conduct didn’t harm clients or generate any financial benefit for him.
“In these circumstances, I am not satisfied that there is sufficient risk of harm to the public interest to outweigh the harm that may be suffered by Eley in the short term if a stay is not granted,” the OSC concluded.
As a condition of the stay, Eley will be under close supervision by his firm.
“I am satisfied that in the circumstances, the risk of harm to investors is adequately addressed by the imposition of the condition of close supervision,” the OSC said.