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SECURITIES COMMISSIONS - Powers

Tuesday, March 02, 2021 @ 6:14 AM  


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Appeal by Pioneer Ventures from a decision of the Securities Commission refusing to revoke freeze orders granted under s. 151 of the Securities Act. Based on information received from a complainant, a commission investigator formed the view that Z, the sole director and officer of the appellant, was an insider and de facto director of a publicly listed company, Yco. Trading information of Yco indicated that the appellant was an active trader and seller of shares of Yco. Z had not made any filings required of insiders or directors of Yco. The commission granted a freeze order in respect of the appellant’s accounts at two banks. Before the commission, the appellant argued that the evidence considered by the chair in granting the freeze orders contained no evidence whatsoever concerning the seriousness of the allegations or how the public interest was served by the granting of the freeze orders. The panel rejected the appellant’s assertion that there was no evidence at all to support the freeze orders. It noted that freeze orders could be issued as soon as an investigation was proposed, as well as during and after an investigation. It found that the public interest in issuing the freeze orders was compelling and that the appellant had produced no evidence in support of the conclusion that revoking the orders would not be prejudicial to the public interest. The appellant argued the commission erred in finding that the freeze orders were validly issued.

HELD: Appeal dismissed. The commission did not equate the evidentiary burdens required for investigation orders with those required for freeze orders. In most cases, the public interest considerations that were relevant to the granting of an investigation order would at least overlap with, if not be the same as, those that were relevant to the granting of a freeze order. The commission was not clearly and palpably wrong in concluding that the freeze orders in this case were issued in the public interest, or that the panel exercised its discretion on a wrong principle or failed to consider all relevant factors. There was no breach of procedural fairness. Information provided by a complainant could be relied upon even though he or she had not been cross-examined on it. At this stage, the commission was not called upon to assess the merits of the complaint or to assess the credibility of the complainant or anyone else.

British Columbia (Securities Commission) v. Pioneer Ventures Inc., [2021] B.C.J. No. 1, British Columbia Court of Appeal, M.V. Newbury, M.E. Saunders and D.C. Harris JJ.A., January 4, 2021. Digest No. TLD-March12021004