An Ontario court has denied leave to appeal to the two men that ran the failed hedge fund firm Norshield Asset Management.
The Ontario Court of Appeal Wednesday dismissed an application from John Xanthoudakis and Dale Smith for leave to appeal a lower court decision, which rejected a motion to stay proceedings by the Ontario Securities Commission against them on the basis of a reasonable apprehension of bias.
Xanthoudakis and Smith had alleged bias in the case, stemming from comments made by former OSC chair, David Wilson, in a television interview, in which he said, “Norshield was run by people who were not honest.”
However, the Divisional Court rejected the argument that the comments amounted to bias, ruling, “We find that a reasonable person, informed of the facts would recognize the separation of the chair from the adjudicative function, and would not conclude that, as a result of the comments made by the chair, the OSC had pre-judged the conduct of the appellants and that they did not and would not receive an impartial hearing.”
And the appeal court has now declined to hear an appeal of that decision.
Back in March 2010, the OSC found that the pair had breached Ontario securities law in connection with the Norshield failure, and it ultimately sanctioned both with permanent cease trade orders, permanent officer and director bans, and $2.125 million in monetary sanctions.