Former head of preferred trading at Scotia Capital Inc., David Berry, has been granted his request to view the settlement agreement reached between his assistant, Marc McQuillen and Market Regulation Services (RS), according to an order released by the Ontario Securities Commission (OSC) today.

Both Scotia and McQuillen entered into a settlement agreement with RS in late February 2007 in regard to short trading conduct that resulted in Scotia contravening the Universal Market Integrity Rules (UMIR). Earlier this month, Berry filed disclosure motions to gain access to the settlement agreements, which he says may contain information relevant to his defense in his own upcoming RS hearing.

RS alleges that Berry, as an employee of Scotia, is liable for Scotia’s conduct in regard to UMIR and the RS proceeding is scheduled to start on April 21.

Berry’s position is that his conduct did not result in Scotia contravening UMIR, but that if breaches of UMIR did occur, they were the result of Scotia’s own compliance failures. His March 14 reply to the RS allegations said Scotia was responsible for supervising his trading and educating him about securities regulatory requirements and that the firm was directly aware of his trading practices in general as well as of the trades at issue. His reply goes so far as to say that Scotia “expressly advised Berry that the impugned trading was not considered improper.”

In deciding to give Berry access to the deals made between his assistant and RS, the OSC considered that Berry intends to call individuals associated with Scotia (including McQuillen) as witnesses at his RS hearing. It noted that the original agreements might provide guidance for deciding who to call.

In October of last year, Berry filed a motion with RS to have all materials related to the investigation of his trading practices plus the McQuillen/Scotia settlement details released for his viewing, but on November 8, 2007 the chair of the RS panel denied the motion.

Berry then followed up with the current request to the OSC to review the RS disclosure decision. An OSC hearing was held on March 6 to consider the request. Today the OSC announced it will grant Berry’s lawyers access to copies of the settlement materials. Once the RS hearing is complete, Berry must return the files or confirm they have been destroyed.