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SECURITIES COMMISSIONS - Investigations and examinations

Wednesday, April 24, 2019 @ 7:12 AM  

Appeal by Pastuch and the corporate appellants from a decision of the Financial and Consumer Affairs Authority that found they had breached several provisions of the Securities Act and the penalty imposed. Pastuch was the sole director and officer of the appellant corporations. The appellants refused to attend the bulk of the merits hearing after their request for an adjournment based on a lack of full disclosure was denied. They were given notice the hearing would proceed in their absence. The appellants attended to provide closing arguments. The panel refused the appellants’ applications to dismiss the proceedings due to lack of full disclosure and for the recusal of the panel and chair based on bias. The chair of the panel had an ongoing relationship with a law firm that represented one of the appellants’ investors prior to the chair joining the firm. The panel found the appellants traded in securities without being registered, did not file prospectuses, engaged in unfair trading practices, and made untrue statements to investors. After receiving additional submissions from the appellants, the panel imposed an administrative penalty of $100,000, ordered the appellants to pay up to $100,000 to each person or company that had suffered financial loss, and costs of $46,638.

HELD: Appeal dismissed. A high degree of procedural fairness was warranted, including full disclosure. The appellants’ complaints relating to disclosure were unfounded. There was no identifiable error in the panel’s decision to accept the investigators’ assertions that full disclosure had been made. The panel was alive to the privacy concerns and took appropriate steps to protect the appellants. The appellants were not denied procedural fairness. The panel applied the proper standard of proof by assessing the evidence on a balance of probabilities, in arriving at its decision. The appellants did not demonstrate bias or reasonable apprehension of bias on the part of the chair and panel. There was no evidence of witness tampering. The appellants could not point to any circumstances where a witness failed to attend the hearing or altered their testimony because of anything said or done by investigators. New evidence adduced by the appellants was not admissible as there was no basis to depart from the general rule that judicial review was to be restricted to the evidentiary record before the hearing panel. There was no error of law with respect to the sanctions imposed.

101114386 Saskatchewan Ltd. v. Saskatchewan (Financial and Consumer Affairs Authority), [2019] S.J. No. 106, Saskatchewan Court of Appeal, G.R. Jackson, P.A. Whitmore and J.A. Ryan-Froslie JJ.A., March 29, 2019. Digest No. TLD-April222019005