An Ontario court has dismissed another bid to block the Ontario Securities Commission (OSC) from using information collected in a criminal investigation in a regulatory proceeding.
The Superior Court of Justice court denied a motion from Toronto fringe mayoral candidate Xiao Hua (Edward) Gong, who sought to appeal an earlier ruling that rejected his attempt to prevent the OSC from using information collected in a criminal investigation in a subsequent regulatory case.
Following an investigation by the OSC, Gong and his company were charged with fraud in connection with an alleged pyramid scheme. After the company pled guilty, the criminal charges against Gong personally were dropped. However, the OSC then brought regulatory proceedings against Gong based on similar facts as the criminal case.
The allegations have not been proven.
In the regulatory case, Gong brought a pre-hearing motion to Ontario’s Capital Markets Tribunal, arguing the OSC had to seek consent from the provincial attorney general to use information from the criminal case in the regulatory proceeding.
The Tribunal denied the motion, finding that the documents the OSC intended to use were obtained through the regulator’s own investigation, and didn’t come from the police or the Crown.
Gong sought to appeal that decision to the Divisional Court, but the court quashed the motion on the basis that only final Tribunal decisions can be appealed.
Gong then appealed that decision, arguing the motion judge erred in finding the Tribunal’s decision was not final — and that if the OSC’s case is allowed, third-party privacy rights will be violated.
However, the court rejected his argument again.
“The motion judge applied the correct law in deciding whether the Tribunal’s decision was final,” it said. “This court has previously found that a final decision under the Securities Act is one that determines the merits of the allegations against a defendant, including the imposition of a sanction.”
Further, “the motion judge made no error in finding that the Tribunal’s decision on Mr. Gong’s pre-hearing motion was not a final decision in this case and, as a result, this court has no jurisdiction to hear his appeal,” the court said in dismissing Gong’s motion.