A lifetime ban from certain exemptions and a trading ban of three to five years are among the sanctions the Ontario Securities Commission is seeking against seminar speaker Brian Costello.

The OSC said Feb. 18 that it found Costello had failed to register as an advisor and had failed to make full disclosure of conflicts of interest contrary to the public interest. However, the commission determined that Costello’s activities did not constitute acts in furtherance of trades.

Both sides were invited to make submissions as to sanctions. In those submissions, OSC staff asks for a litany of sanctions against Costello.

In addition to the bans, the OSC wants Costello to submit to a review by an expert of the practices and procedures he follows with respect to the content of any seminars, presentations, speeches, etc., and that the review be conducted at Costello’s expense. It also is seeking a series of changes to his disclosure practices; a reprimand; an order that Costello resign any positions he holds as a director or officer of an issuer. He should also be prohibited from becoming or acting as a director or officer of any issuer for a period of three to five years. He should be made to cover costs of $300,000.

Costello’s lawyer says in his submission that no further punishment is necessary.

Costello’s legal team, headed by Joe Groia, says that the proposed punishments are unduly harsh, unwarranted and unconstitutional. “Put squarely, in a case where staff, at best, was only minimally successful, in a “difficult” case, in an area of securities law that was unclear, the staff seeks to harshly punish Mr. Costello, place him under unconstitutional restrictions, which to our knowledge has never before been requested in any other case and goes far beyond any reasonable order which could be made by the commission, and destroy his career and reputation.”

Groia argues that Costello’s past conduct doesn’t warrant “the total devastation of his career as proposed by staff allegedly for the protection of Canadian investors and public confidence in the capital markets. To the contrary, on a fair reading of the staff’s Notice of Hearing, Mr. Costello was substantially successful on a number of the material allegations made against him. Therefore, any order made by this commission, in the public interest, as suggested by the staff, would be seen as an order made to punish misconduct.”

Groia also says the proposed order would result in a serious and egregious infringement of Costello’s right to freedom of expression. “With the greatest respect to this commission, can there be any clearer evidence of the staff’s determination to punish Mr. Costello and to destroy his career and his livelihood?

“On the basis set out by staff, Mr. Costello could not talk to his family about securities over his dinner table without violating the staff’s proposed orders.”