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The Ontario Divisional Court in Fiorillo v. Ontario Securities
Commission dismissed an appeal by a number of respondents
who were found liable by the Ontario Securities Commission
("OSC") for insider trading. The appellants were
convicted largely on the basis of circumstantial evidence and the
tipper's compelled testimony before OSC Staff, since her
counsel would not undertake to call her as a witness. The
appellants appealed the merits decision, one appellant appealed a
15 year trading ban, submitting it amounted to a lifetime ban due
to his age, and another appealed the significant monetary penalty
levied against him.
The Divisional Court dismissed the appeal, holding a deferential
standard of review applied and holding sanctions should not be
overturned on appeal unless they were "demonstrably
unfit". The Court held that it was not an error of law for the
OSC to rely on compelled testimony as the entirety of the testimony
before it, nor was it improper for Staff to attack the credibility
of parts of the testimony because the tipper was adverse in
interest to Staff.
In concurring reasons, Justice Morawetz held that the appellants
attempted to re-argue the merits, and on appeal the Court should
restrict itself to determining whether the OSC's inferences
were supported by evidence.
This decision is significant because the Divisional Court
applied a highly deferential standard of review, and confirmed
recent trends that suggest that the OSC will have the final
decision on matters that fall within its mandate, short of
significant errors of principle.
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