In the wake of a decision that the existence of a secret settlement agreement may have harmed their ability to mount a complete defence, the Nova Scotia Securities Commission (NSSC) has dropped disciplinary allegations against two men.
Earlier this week, the NSSC released a decision, which found that there was no authority for commission staff to agree to put off consideration of a settlement agreement with an investment dealer for over seven years, while a complex legal proceeding has played out. A commission panel said that keeping the deal secret is not in the public interest, and may have deprived two men of the full ability to defend the allegations against them.
Back in 2006, the commission brought allegations against several insiders of Knowledge House Inc. (KHI). The commission settled with one of the men and dropped allegations against another after criminal charges were filed against him, but allegations remained outstanding against the other two, Kenneth MacLeod and Calvin Wadden.
The decision handed down earlier this week found that the agreement to keep a proposed settlement with an investment dealer in the case secret, “has been a failure to protect the public interest and potential deprivation of Wadden and MacLeod’s right to make a full answer and defence to the allegations brought against them. I conclude that the escrow agreement is invalid and not permissible…”
Now, the regulator’s enforcement staff have discontinued the proceeding against MacLeod and Wadden, although they didn’t specifically point to the decision released earlier this week as the reason for the dismissal, saying, “After considering many factors, enforcement staff concluded it is in the public interest to discontinue the proceeding.”