The Alberta Court of Appeal has dismissed two grounds of appeal by Dwight Victor Spaetgens and allowed a third, the Alberta Securities Commission announced Thursday.
Spaetgens had appealed the Nov. 7, 2016 and March 8, 2017 decisions of the ASC panel that found he violated securities rules and imposed various sanctions. He also appealed a May 5, 2016 decision of the ASC that dismissed his request for an adjournment of the merits hearing.
The ASC panel found that Spaetgens violated securities rules by working as a de facto director and officer of several companies in breach of a settlement agreement he reached with the ASC back in 2009, and by engaging in illegal trading.
The panel’s sanctions included a 15-year ban, a $40,000 penalty, and $65,000 in costs
Spaetgens appealed the ASC decisions. He argued that he was denied a fair hearing, the panel erred in determining that he was involved in trading securities, and the sanctions imposed were too tough. He did not appeal the findings that he was acting a de facto officer and director.
The appeal court denied his appeals regarding the fairness of the hearing and the finding of illegal trading.
“There was evidence on which the panel could conclude that Mr. Spaetgens was engaged in trading in securities,” the court wrote in its memorandum of judgment. “Given the context of institutional investors, the focus of the calls, and the broad definition of trade, any act in furtherance of a sale of securities, it was reasonable for the panel to conclude that Mr. Spaetgens’ conduct during the calls amounted to trading in securities. This ground of appeal is dismissed.”
However, the court sided with Spaetgens regarding the sanctions imposed by the ASC panel.
The panel made “two unreasonable conclusions” in its sanctions reasoning, the court said, ruling that the ban against Spaetgens should be reduced to 10 years, and the penalty cut to $10,000.