The Ontario Securities Commission (OSC) has denied motions seeking improved disclosure from OSC staff by a respondent in an illegal insider trading case that was filed earlier this year.
Back in February, the OSC brought allegations on illegal insider trading and tipping around corporate transactions against numerous respondents — Eda Marie Agueci, Dennis Wing, Santo Iacono, Josephine Raponi, Kimberley Stephany, Henry Fiorillo, Giuseppe (Joseph) Fiorini, John Serpa, Ian Telfer, Jacob Gornitzki and Pollen Services Ltd. Those allegations have not been proven, and a hearing is scheduled to start in September 2013.
In a decision released Monday, the OSC reports that, on November 13, Wing, brought a motion seeking an order for “proper and meaningful disclosure in respect of the allegations made against” him; and, an order that the transcripts of the disclosure motion be kept confidential.
The decision indicates that Wing’s primary complaint is that OSC staff disclosed too much irrelevant information, thereby depriving him of the meaningful disclosure required for him to fully defend the case. “He submits that staff has simply made ‘dump truck’ disclosure of an enormous number of documents, and has not fulfilled their obligation to cull the documents in its possession for relevance,” the decision states. “He submits that the obligation is on staff to conduct relevant searches, electronic or manual, of the documents in its possession and assess which documents or categories of documents identified in this manner may be relevant to the allegations against Wing.”
The decision also notes that Fiorillo objects to parts of Wing’s motion, arguing that “it is neither appropriate nor permissible to limit disclosure in the manner requested by Wing.”
OSC staff maintains that it has fully complied with its obligations by disclosing all relevant documents, whether it intends to rely on them at the hearing or not. OSC staff says that the request for separate disclosure briefs for each respondent could prejudice other respondents to the proceeding, and “could impair the ability of staff and the commission to conduct a fair and efficient hearing.”
The commission agrees with staff’s position, finding that OSC staff has made acceptable disclosure. “Respondents are entitled to disclosure that ensures them a fair hearing. At the same time, staff’s disclosure must be adequate, not perfect,” the decision states
“In this case, staff has taken what I consider to be reasonable steps to provide a searchable database containing potentially relevant documents and has excluded a number of documents from the database that are clearly irrelevant,” the decision notes. And, “… it is appropriate for staff to have made the entire database available to each of the respondents. That gives the respondents the opportunity to conduct their own database searches and to apply their own standard of relevance to the documents in the database.”
The decision concludes, “…on balance, staff has, through the database, provided the respondent with what I consider to be adequate disclosure of relevant documents. In doing so, staff has applied its mind to the various categories of relevant documents and appears to have made a reasonable attempt to determine which documents are relevant. Staff has provided the respondents with a database that appears to be reasonably searchable and accessible.”
As a result, the commission denies the motion on disclosure. It also rules that the confidentiality motion is “premature and unsupported by the evidence”.