Regulators in British Columbia have banned a former broker from registration for a year and fined him $30,000 after a hearing panel found that he lied to investigators and acted contrary to the public interest. In doing so, it rejected the commission’s recommendation for much more severe sanctions.

A hearing panel of the B.C. Securities Commission (BCSC) handed down the penalties against Douglas William Falconer Wood today following a sanctions hearing last month. Back in January, the panel found that Wood breached securities law when he lied to commission staff during a compelled interview, but it dismissed allegations that he traded improperly.

Commission staff sought a permanent ban and a $250,000 fine in the case; whereas Wood argued for a six-month ban and a $30,000 penalty. And, the panel came in almost in line with his position.

The panel noted that he lied and that this hindered an investigation; which, it says, he acknowledged is serious misconduct. And, it found that he repeatedly traded shares that were on his employer’s restricted list; which, it says, represents “a continuity of behaviour that lacks honesty and integrity.” However, the panel also noted that there was no harm to investors, and that although Wood did profit, it was in “a non-material amount” from his trading.

The decision indicates that BCSC staff argued that the panel can infer from the offshore trading structure that his trading was somehow improper, and that this represents a significant aggravating factor in the case. But the panel disagreed.

“Although Wood’s offshore trading structure clearly ensured a lack of transparency to that activity, we do not know the reasons for that structure and whether or not it has anything at all to do with activity that we have the jurisdiction to regulate,” it said; adding, “… because we decline to make the inference suggested by the executive director, we reach a different conclusion on sanctions than those requested by the executive director.”

Ultimately, it imposed a one year registration ban, but noted that a trading ban was not warranted. It also agreed with Wood that an administrative penalty of $30,000 is “appropriate in the circumstances”.