Court upholds OSC decision denying rep’s appeal

An Ontario court has upheld an Ontario Securities Commission (OSC) decision that dismissed a former rep’s appeal of a disciplinary ruling from the Investment Industry Regulatory Organization of Canada (IIROC).

The Divisional Court upheld the OSC’s decision to reject the appeal of Douglas John Eley, a former rep at Echelon Wealth Partners Inc. in Oakville, Ont. Eley sought a review of an IIROC hearing panel decision against him.

In 2020, the IIROC panel ruled that Eley’s registration should be suspended for 12 months, and he was fined $50,000 and ordered to pay another $50,000 in costs after it found that he violated the self-regulatory organization’s rules.

The alleged violations involved improper alterations to already-signed client documents, including managed account agreements, switch tickets and dealer rep change forms.

In 2021, the OSC rejected Eley’s appeal of the IIROC panel’s rulings.

Now, a judicial review has upheld the OSC’s decision, saying the regulator’s findings are reasonable.

According to the court’s ruling, Eley argued that the OSC erred in finding that the IIROC panel didn’t make legal errors in his hearing and didn’t deny him procedural fairness.

“While there were some fact-finding imperfections at the IIROC, the OSC concluded that these imperfections did not render the IIROC proceedings unfair or undermine the reasonableness of IIROC’s core factual findings grounding liability. This conclusion of the OSC panel is reasonable,” the court said in its decision.

Additionally, the court found that the sanctions imposed on Eley “disclose no error in principle and are likewise reasonable.”

“It is arguable that the sanctions imposed approach the boundary of permissible leniency, in the circumstances of this case: there is no reasonable argument that the sanctions were too harsh,” the court said.

As a result, the appeal was dismissed.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.