An Ontario Securities Commission (OSC) hearing panel on Thursday rejected the appeal of registered representative Paul Darrigo, who had asked the commission to review the findings of an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel.
The IIROC hearing panel ordered $95,000 in disgorgement and $20,000 in penalties against Darrigo, along with 12 months of strict supervision, after finding that he recommended transactions that “caused unnecessary fees to clients and undue commissions,” and that his borrowing of funds from clients constituted conduct unbecoming.
Darrigo sought to appeal both the ruling of liability, and the penalties that were handed down by the IIROC panel, and whether he was denied procedural fairness when the IIROC panel denied his request for an adjournment in the case.
The OSC panel upheld the IIROC panel’s decisions in each area. The OSC panel found that there was “no denial of procedural fairness” in the hearing. “IIROC balanced the appropriate factors in determining whether the additional adjournment should be granted,” the OSC panel says in its decision. “The decision to deny the further adjournment reflected a judicious exercise of the panel’s discretion. It was not an error of law and the panel did not proceed on an incorrect principle.”
The OSC also found that there is no basis for interfering with the IIROC hearing panel’s findings on liability. “The commission does not find that IIROC proceeded on an incorrect principle or erred in law in its finding that Darrigo engaged in unbecoming business conduct,” the OSC panel says, and the IIROC panel “was acting within its area of expertise to interpret and apply [IIROC rules] to establish appropriate standards of conduct for its own industry.”
The OSC panel also upheld the penalties imposed by the IIROC panel, ruling that they “were proportionate, made in accordance with the guidelines, and not based on an error of law.”
“None of the circumstances permitting commission intervention in an IIROC decision apply to the facts of this case,” the OSC panel concluded in dismissing the appeal.
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