Former futures trader, Rob Kyle, is taking his long-running battle with the Investment Dealers Association of Canada and the Ontario Securities Commission back to court.

Yesterday Kyle filed his appeal of a Dec. 6, 2002, decision by the OSC, which essentially affirmed an earlier decision of the IDA’s Ontario District Council regarding a disciplinary hearing against Kyle and his firm, Derivative Services Inc.

The OSC dismissed an application by DSI and Kyle in which they challenged several disciplinary rulings of the District Council.

However, the commission’s decision did not provide its own explicit answers to a series of fundamental questions about the nature and authority of the regulators. Among other things, Kyle challenged the jurisdiction of the IDA over its members.

Kyle alleged that the IDA’s investigative powers violated the Canadian Charter of Rights and Freedoms. He also argued that the provisions of the Ontario Statutory Powers Procedure Act and the Ontario Evidence Act applied to IDA discipline proceedings.

The District Council rejected these arguments and indicated that even if the Charter did apply to IDA investigations, the investigative powers of the IDA did not violate the Charter. The OSC fully agreed with the IDA’s ruling.

Now, Kyle is appealing the latest OSC decision to the Ontario Superior Court of Justice (Divisional Court). The appeal asks that the order by OSC commissioners Morphy and Shirriff be varied.

Many of the same arguments are raised in this appeal. Kyle argues that:

  • the District Council of the IDA has no ability to decide questions of law;
  • the OSC’s decision cannot confer jurisdiction on the District Council;
  • the jurisdiction of the IDA to enforce its by-laws is derived primarily from the power and authority conferred upon it by the OSC; and
  • that legislation such as the Charter and the SPPA should apply to the IDA.