The Ontario Securities Commission has dismissed an application by the Investment Dealers Association of Canada to review the penalty decision of an IDA hearing panel that found that Jeffrey Kasman and Clinton Anderson conducted manipulative and/or deceptive trading in the shares of American Motorcycle Corp.

In March 200, the IDA hearing panel ordered Kasman and Anderson, former reps at the Toronto branch of Desjardins Securities Inc., to each pay a fine of $25,000.

In addition to the fine, the two men were suspended from IDA approval for two months, ordered to re-write the association’s conduct and practices exam, and pay $40,000 in costs

The IDA hearing panel summarized its view of the case in the following paragraphs at the conclusion of the decision:

“The sanctions, considered together, constitute an appropriate deterrence for the respondents and will send the right message to others in the industry about the importance of fulfilling the ‘know your client’ and ‘due diligence’ obligations, the lack of fulfillment of which in this case facilitated the market manipulation in question,” the hearing panel stated.

“One might conclude that this case, in the scheme of things, was a small matter. No one was directly harmed. Amounts were small. The trading period was short. The market manipulation was not even noticed at the time. The events occurred in 2003 and did not come to light until 2005,” the panel added.

In its submission to the OSC, the IDA said that that the hearing panel erred in principle by imposing a less stringent sanctions and costs order than what was requested by IDA staff.

The issue before the OSC was whether it should confirm the penalty decision or substitute its own decision.

The OSC’s reasons and decision were released on July 14, following a hearing on March 30.

“Decisions on sanctions and costs are heavily fact-dependent. In this case, we find that the hearing panel heard and decided the evidence and submissions of IDA staff and the respondents and made its decision based on the appropriate principles,” the OSC stated.

“Although IDA staff would have preferred a different order for sanctions and costs, we are not persuaded the hearing panel proceeded on any incorrect principle or made any other error that would justify our intervention in the Penalty Decision,” the OSC concluded.

IE