An Ontario Securities Commission (OSC) hearing panel has upheld a disciplinary decision of the Investment Industry Regulatory Organization of Canada (IIROC) against a former rep Earl Marek.

Earlier this year, IIROC found that Marek violated securities rules by facilitating off-book trades for two investors (namely trading in the initial public offering of Facebook Inc.). It ordered Marek be suspended for one year and pay a $50,000 fine.

According to the OSC decision released Tuesday, Market argued that the IIROC decision was wrong to conclude the trades in question involved clients. In hearing the appeal, the OSC notes that the term “client” is not specifically defined in securities law. So, regulators must decide whether the investors in question were clients based on the circumstances of their dealings.

The OSC panel ruled that IIROC was correct in concluding that, in the circumstances, Marek was dealing with clients.

For example, the OSC panel noted that Marek recommended the purchase of the Facebook IPO to the two investors; he told them that the trades would go through his dealer, Macquarie Private Wealth Inc.; and he told them that he hoped the transaction was the beginning of a longer-term relationship.

Additionally, the investors “reasonably believed that they were clients of Mr. Marek and of Macquarie, and there is no evidence that Mr. Marek did anything at the time of the transaction to disabuse them of that understanding,” the OSC panel stated in its decision.