Securities regulators in Alberta have ordered $32,500 in monetary sanctions against an energy company executive who was found to have lied to investigators. But they rejected a bid for heavier sanctions from regulatory staff.
The Alberta Securities Commission (ASC) ordered Edmund Shimoon, chairman and CEO of Calvalley Petroleum Inc., to pay an administrative penalty of $25,000 and costs of $7,500, after a hearing panel found that he breached securities laws by making an untrue statement to ASC staff in the course of an investigation. However, the panel dismissed all of the other allegations made against Shimoon and others in the case.
According to the decision, ASC staff sought a penalty “in the range of $50,000-$75,000”, and a one-year ban from acting as an officer or director of any reporting issuer, against Shimoon for the one allegation that was proven. It says that Shimoon argued that staff’s proposed sanctions were “unreasonable and unnecessary”, and that a director-and-officer ban would be particularly “unreasonable and disproportionate”. He suggested that a penalty in the $10,000 to $20,000 range would be more reasonable.
And, the panel largely agreed with Shimoon. While it ruled that some sanction is necessary, given “The nature and seriousness of the misconduct found here, and the foreseeable serious adverse effects that a repetition could have on the investigative process”; it ultimately decided that a director and officer ban was not warranted, and that a smaller penalty than the one recommended by ASC staff is appropriate.
“We are not convinced that the deterrence needed here — and the intended encouragement of future forthright behaviour — demand Shimoon’s removal as a director and officer, even temporarily, of Calvalley or any other issuer,” it says. “To the contrary, in the circumstances of this case we consider that the bans sought by staff could amount to punishment rather than protection.”
“The clearest, simplest and in our view most effective mechanism would be a monetary order – an administrative penalty. We are satisfied that an administrative penalty — alone, and in an appropriate quantum — will suffice in this case,” it concluded.