Ontario’s Capital Markets Tribunal ruled that it was in the public interest to authorize the Ontario Securities Commission (OSC) to disclose compelled testimony in response to a criminal subpoena — evidence that was sought by Gary Ng, a former securities industry executive, as part of his defence to an ongoing case against him.
The tribunal issued its reasons Tuesday for a decision released earlier this month, which authorized the OSC to disclose confidential transcripts of the regulator’s examinations of executives at failed fund manager, Bridging Finance Inc., along with the exhibits used in those examinations.
According to the tribunal, the OSC sought authorization to disclose the evidence in response to a subpoena that it received back in May — issued by Justice Sugunasiri of the Ontario Superior Court of Justice, in connection with an ongoing criminal proceeding against Ng, who at one point held a large stake in Bridging.
As part of the proceeding against him, Ng sought disclosure of the OSC’s transcripts and related exhibits, the tribunal noted — and the court ordered the regulator to turn over the materials he sought, concluding that they were likely relevant to his case and that the Bridging executives may be called as witnesses in that case.
The tribunal said it’s not clear that the regulator needed to seek the panel’s permission to turn over the requested evidence, but that the regulator applied for authorization “out of an abundance of caution.”
Previously, the tribunal found that the OSC improperly disclosed portions of compelled testimony from Bridging executives in court filings — when it sought a receiver to be appointed for the company and its funds in 2021.
That improper disclosure was the basis of repeated efforts by the Bridging executives to have the regulator’s enforcement proceeding against them dismissed — but both the tribunal and an Ontario court have rejected those efforts. The issue also led to a change in securities law.
The tribunal said the Bridging executives opposed the application seeking disclosure of the OSC’s materials in response to the criminal subpoena, arguing, among other things, that the OSC has already improperly disclosed these materials, that compelled examinations are supposed to be highly confidential, and that there are other ways for Ng to gather relevant evidence.
And, they argued that if the tribunal does authorize disclosure, that the materials should be redacted to only include the portions dealing with Ng.
However, the tribunal ruled that “it was in the public interest to authorize the commission to disclose the requested materials, unredacted.”
“It is generally in the public interest for the commission to heed an order of the Superior Court, and the parties here offered no compelling reason for an exception to that general rule,” the tribunal said in its decision, adding that the OSC’s previous improper disclosure doesn’t undermine the court’s subpoena, that there’s no evidence that the disclosure will harm the Bridging execs, and that the court’s control of the material will protect their privacy and other interests.
“They have standing in the court to make submissions about whether any portions of the material should be made public, and what use can be made of the material,” the tribunal said. “The court is better placed than this tribunal to determine those questions in the context of the criminal proceeding.”