The Ontario Securities Commission has lost its bid to overturn a court ruling requiring a new trial in the case of Andrew Rankin, a former RBC Dominion Securities investment banker accused of passing inside information to a friend.

Investment banker Andrew Rankin was charged with 10 counts of insider trading and 10 counts of tipping. He pleaded not guilty, and he was convicted of all 10 counts of tipping, but found not guilty on the 10 counts of insider trading. He was sentenced to six months imprisonment on each tipping count, to be served concurrently.

Rankin appealed both his convictions and sentence. On Nov. 9, 2006, the appeal court judge issued a judgment in which he allowed the convictions appeal, set aside the convictions and ordered a new trial.

The OSC brought a motion for leave to appeal that judgment. Today, the court denied that motion for leave to appeal.

“Provincial offences appeal judgments are intended to be final. The jurisprudence of this court is clear: leave should be granted only in exceptional cases raising issues of broad public importance,” it noted in its decision.

It notes that if leave to appeal is granted, the OSC will advance three grounds of appeal. These grounds are that the appeal court judge erred in: substituting his view of the credibility of [prosecution witness Daniel] Duic for that of the trial judge; misapplying the law regarding similar fact evidence; and, misapplying the standard of review regarding a trial judge’s reasons.

“The OSC argues that the appeal it seeks leave to pursue is of extraordinary importance in securities regulation. It notes that the tipping provisions in the Securities Act are essential tools for maintaining the integrity of the capital markets and fostering investor confidence,” the court said. “As this case is the first tipping prosecution, it is of considerable interest and importance to both the investment industry and the public generally. Thus, the OSC argues, it is essential in the public interest and for the due administration of justice, that the grounds on which the appeal court judge reversed the trial judge be clarified so that future insider tipping prosecutions are conducted properly.”

“When considering whether a proposed appeal raises an issue of broad public importance, the focus is not on the subject matter of the appeal but on the questions of law to be resolved on appeal. Thus, the fact that insider tipping and the proper prosecution of tipping offences are important matters of public significance is not sufficient to warrant granting leave,” it found. “Leave is to be granted only if the appeal raises questions of law on which this court’s guidance is essential in the public interest or for the due administration of justice. None of the proposed grounds of appeal raise such questions.”

“Simply stated, the appeal court judge overturned the convictions on the basis of errors made by the trial judge in the application of well-established legal principles, none of which are specific to tipping. Consequently, the questions raised on the proposed appeal do not meet the very high threshold for leave,” it concluded.

The decision also said there’s nothing in the appeal court decision that would have a negative effect on the OSC’s ability to prosecute tipping. “Although the OSC may have suffered negative publicity as a result of the first tipping convictions being overturned, I do not see the judgment as creating new or additional legal impediments to such prosecutions,” it said.