The Saskatchewan Court of Appeal has denied an appeal of a decision by the Saskatchewan Financial Services Commission, but rules that it should have issued its reasons for that decision.

The SFSC ruled that the appellants in this case, Euston Capital Corp. and George Schwartz, sold shares of Euston to Saskatchewan residents without proper exemptions from the registration and prospectus requirements. It ordered them to cease trading securities and imposed significant financial penalties.

According to the judgment, the appellants argued that the commission made a number of errors in arriving at its decision. Most significantly, it said, they claimed that it misinterpreted or misapplied a companion policy relating to exemptions from the registration and prospectus requirements. They also argue that the sanctions imposed on them were improper.

The court found that the SFSC did not make a reviewable error in finding that they had improperly relied on the exemptions. “However, in the circumstances of this case, I find that the commission did err by failing to provide reasons for its decision to impose sanctions on the appellants,” it said. “As a result, the sanctions aspect of its decision must be quashed and remitted for reconsideration.”