The Ontario Divisional Court has slashed penalties levied by the Ontario Securities Commission against former Yorkton Securities Inc. head trader, Piergiorgio Donnini.

Although the court upheld the commission’s finding on liability, on the appeal on sanctions, the court reduced the term of the suspension from 15 years to four years from Sept. 12, 2002.

Finally, on the appeal from the cost order, the court returned the matter to the commission to conduct a hearing to review the investigation and hearing costs imposed on Donnini.

In a controversial, contested decision the OSC had initially slapped Donnini with a 15 year registration ban, and charged him to pay $186,000 in costs.

An OSC hearing panel brought down the penalties after finding that Donnini traded shares of Kasten Chase Applied Research Ltd. with non-public material information. The panel found that he acted contrary to the public interest.

The decision was controversial though, as the penalties were far greater than those agreed to in settlements. As well, not all of the panelists were convinced that Donnini had done anything wrong. This led Donnini to appeal the OSC decision.

In a news release, the OSC said commission staff “will carefully examine the decision before deciding if it will take further steps in this matter”.