An Ontario Securities Commission (OSC) hearing panel has dismissed an appeal from Krishna Sammy, ruling that an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel did not err in handing down discipline against the former portfolio manager in 2016.

Specifically, the IIROC hearing panel had banned Krishna for five years, fined him $250,000 and ordered him to pay back costs of $75,000 after ruling that he violated IIROC rules by failing to disclose a conflict of interest and for recommending that clients purchase securities without ensuring that the recommendations were in accordance with their risk tolerance. His appeal focused on the latter allegation.

According to the OSC hearing panel’s decision, on appeal, Sammy argued that the IIROC hearing panel erred by relying on evidence from an IIROC investigator who was not qualified to give expert evidence and by making its findings without records from his former firm.

“Mr. Sammy claims that there are ‘missing documents’ relevant to the IIROC proceeding,” which would have supported his defence, but that IIROC did not produce them at the hearing, the OSC hearing panel’s decision notes.

The OSC hearing panel denied that ground for appeal, ruling that Sammy could have sought to obtain those documents from his former firm if they were necessary for his defence.

“Mr. Sammy cannot now rely on his failure to try to obtain the documents, in support of a contention that the documents were available and that they should have been considered at the IIROC hearing,” the OSC hearing panel said. “Because of that, and in the absence of any allegation or evidence of impropriety in IIROC’s investigation or documentary disclosure, we see no basis to find an error by the IIROC panel with respect to this issue.”

On the issue of whether the IIROC hearing panel relied on evidence from an investigator who was not qualified to give expert evidence, the OSC also found in the self-regulatory organization’s favour.

“This is not a close call. The evidence fully supports the conclusion reached by the IIROC panel that ‘on many occasions’ the high-risk securities in client accounts exceeded the allowable limit. We have no basis to conclude that the panel erred with respect to this issue,” the OSC hearing panel said in its ruling. “We conclude that the IIROC panel made no error in its conduct of the proceeding or in the conclusions set out in the IIROC decision.”