Golden Capital Securities Ltd. intends to seek leave to appeal a British Columbia Securities Commission panel decision to uphold disciplinary action taken by the Investment Industry Regulatory Organization of Canada (IIROC) against the firm, IIROC said Monday.

In late 2007 and early 2008, an IIROC hearing panel found that Golden Capital contravened IIROC bylaws by withholding information reasonably required for an IIROC investigation. The panel fined the firm $75,000 and ordered it to pay $76,760 in costs.

Golden Capital asked the commission to set aside the IIROC panel’s decision because, it said, IIROC had not proven that the information it demanded was reasonably required for the investigation and could include irrelevant and private information. The firm also said the penalty was unfair.

In confirming the IIROC panel’s decision, the BCSC panel overturned existing IIROC precedent that IIROC had an obligation to act reasonably in the initiation and conduct of an investigation. “Its only duty is to act in good faith,” the panel said, noting that “firms and individuals in the business of trading in securities have an extremely low expectation of privacy over records and things connected to their business.”

The commission panel said the penalty and costs imposed by the IIROC panel were reasonable and appropriate, observing that it “would have considered a higher penalty reasonable and appropriate in the circumstances of this case.”

The BCSC panel released its decision on April 9.

IE