A hearing panel of the Ontario Securities Commission has reversed a decision of the Toronto Stock Exchange, blocking trader Taylor Shambleau from gaining access to an investigation report into allegations against him.

Staff of TSE Regulation Services Inc. requested the hearing to review a decision of the board of the TSE, which upheld an earlier decision of a TSE hearing panel. The board and the panel ordered RS to disclose an investigation report pertaining to disciplinary proceedings being brought against Shambleau. RS argued that the board erred and that the investigation report is irrelevant.

Shambleau, a Sprott Securities trader, is accused of being involved it the RT Capital Management Inc. scandal.

The TSE board decided that the investigation report should be disclosed because it is relevant to certain evidence to be given by an investigator; and, it would be of assistance in the cross-examination of Michael Prior, the expert to be called by RS. In both these respects the OSC found that the board was wrong, and it set aside its decision.

“Ms. Stewart is a fact witness and her opinions are irrelevant. Mr. Prior, a senior surveillance officer, will be called as an expert witness in relation to the interpretation and application of the rules of the exchange as they relate to trading on the exchange. It is ultimately up to the Hearing Panel to make the final determinations on the issues in dispute and Ms. Stewart’s opinion or interpretation of the facts, as contained in the investigation report, is of no relevance for the purposes of disclosure.”

“We are of the opinion that the adequacy of disclosure must be considered in the context of the nature of the regulatory proceeding and whether “the fruits of the investigation” have been disclosed to Mr. Shambleau,” it says. It decided that Shambleau has been provided with all the relevant material gathered in the course of the investigation. “In conclusion, for the reasons given, we find the investigation report not relevant.”