In a novel decision, an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel has ruled that a registered representative can use the transcript of an IIROC enforcement interview in a related civil proceeding.
The panel granted a motion brought by Gordon Albert Malic, a rep with Mackie Research Capital Corp. in Alberta, allowing him use of the transcript of an interview with IIROC staff in a civil case before the Court of Queen’s Bench of Alberta.
Malic faces allegations that he violated IIROC rules by engaging in unapproved outside business activities. Those allegations haven’t been proven.
Malic is also a defendant in a civil action brought by a former client, who is also the complainant in the IIROC proceeding.
According to the panel decision, Malic sought permission from the panel to use a copy of a letter to IIROC from the former client’s lawyer, and a copy of the transcript of the client’s interview with IIROC staff, to make an application in the court proceeding.
“Malic may use the transcript of questioning of [the client] in the [court] proceeding to defend Mr. Malic in the IIROC proceeding, including ‘by impeaching the credibility of [the client].’ Basically, Mr. Malic wants to use the IIROC information to ask the court for permission to use [the client’s court] transcript in the IIROC proceeding,” the panel said.
The panel said that the main issue for the motion was whether the “public interest outweighs any prejudice that would result to IIROC, or to [the client], from permitting Mr. Malic to use the IIROC information in the [court] application.”
“There are no previous IIROC decisions on this issue,” it noted.
IIROC staff objected to the motion, arguing that it would be unfair and would prejudice IIROC by delaying its disciplinary case.
The client’s lawyer also objected to the motion.
Malic’s lawyer argued that enabling his client to defend himself is in the public interest and outweighs any prejudice.
Ultimately, the panel concluded that the public interest in allowing Malic to use the IIROC information “outweighs any resulting prejudice to IIROC and [the client].”