With in-person regulatory proceedings off limits due to Covid-19, the Ontario Securities Commission (OSC) has rejected objections from respondents facing enforcement allegations to going ahead with a video hearing.
The OSC has denied an application from the respondents in an enforcement case who argued that it would be unfair to hold their hearing by video conference for various reasons, “including that it would be slower and more expensive, and that it would not permit an adequate assessment of credibility, which is in issue in this proceeding.”
The respondents are alleged to have defrauded investors, illegally distributed securities, traded without registration and filed misleading financial statements, among other allegations.
The allegations, which have not been proven, are scheduled to start being heard on Oct. 5. The hearing isn’t expected to conclude until mid-January 2021.
In its decision to go ahead with that hearing via video, the commission said that “proceeding by videoconference under the current circumstances is consistent with the important goal…of conducting commission proceedings in a just, expeditious and cost-effective manner.”
Delaying a hearing would be less expedient and more expensive, and would risk witnesses having their memories fade, the decision noted.
“In this case, it is unknown how long the merits hearing would have to be postponed if it must await an in-person hearing. The commission has suspended in-person hearings until further notice. The delay could be lengthy,” the OSC said.
The respondents also “failed to establish that a videoconference will cause them to suffer significant prejudice or that it will deprive them of their right to a fair hearing,” the OSC ruled.
“The respondents argue that the commission has, in the past, always required merits hearings to be in-person. Nothing, they submit, should change as a result of the pandemic,” the decision noted.
However, the OSC concluded, “The respondents are incorrect.”