Firm could still bring a motion for a stay of proceedings at a later stage, or seek a review of any final decision in the case

The Ontario Securities Commission has rejected a bid by Deutsche Bank Securities Ltd. to halt an enforcement hearing brought against the firm by the Investment Industry Regulatory Organization of Canada.

The OSC handed down its decision on Friday.

Deutsche initially asked an IIROC hearing panel to set aside or stay a notice of hearing against the firm, arguing that it can’t provide the firm with a fair hearing because it does not have the power to compel evidence (apart from firms and people under IIROC’s jurisdiction), and that there is evidence that can’t be compelled that could help its defence. The IIROC panel dismissed that motion, and the firm appealed to the OSC.

Both IIROC and OSC staff opposed the firm’s application, arguing that there is no basis for interfering with the decision of the IIROC hearing panel, and that Deutsche’s application is premature.

In its decision, the OSC ruled that the IIROC hearing should be allowed to proceed. The commission sided with IIROC and OSC staff, concluding that the there is no basis to interfere and that the firm’s application is premature.

The OSC ruled that the extent of any prejudice to Deutsche’s ability to defend can only be assessed in the context of a full IIROC hearing, after IIROC staff have set out their theory of the case, and the firm has had an opportunity to mount a defence, including whether it’s able to get witnesses to appear on a voluntary basis or obtained transcript evidence from them.

“The IIROC hearing panel will then be able to consider the actual prejudice to [Deutsche’s] right to make full answer and defence caused by specific refusals of non-compellable witnesses to testify,” the OSC said in its decision.

Following its hearing back in January, the OSC reserved its decision and temporarily stayed the IIROC hearing. With its decision Friday, it revoked that interim stay, allowing the case to proceed.

In its decision, the OSC also notes that Deutsche could still bring a motion for a stay of proceedings at a later stage, or it could seek a review of any final decision in that case.

IE