Respondents in an enforcement proceeding brought by the Ontario Securities Commission (OSC) are seeking leave to appeal a ruling of Ontario Divisional Court, which declined to admit their expert evidence in a judicial review of the OSC’s case against them.
On Thursday, Sept. 3, the Supreme Court of Canada will issue its decision on an application for leave from a finance firm, North American Financial Group Inc., and a couple of executives that sought a review of the OSC’s case against them back in 2013. That case found that they violated securities law and perpetrated a fraud on investors.
The sanctions imposed on the firm and the executives included lifetime bans, $3 million in disgorgement, $1.8 million in administrative penalties and $200,000 in costs.
In 2018, they challenged the sanctions in the Division Court, arguing that the finding of fraud and the sanctions should be set aside, and alleging that their counsel was ineffective and conflicted, and that a commissioner hearing the case was biased. That court rejected their appeal.
They moved to set aside that ruling, and sought to introduce new evidence in the form of seven expert reports from various sources, including former regulators and academics.
However, the Divisional Court granted a motion from the OSC preventing the admission of the expert reports, concluding that they were not necessary, were irrelevant or addressed issues that are already within the expertise of the courts. It also granted the OSC security for its costs of $100,000.
The Court of Appeal for Ontario dismissed an application for leave to appeal that ruling — and now, the respondents are seeking permission to challenge the Divisional Court’s rulings at the Supreme Court.