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Civil Liberties and the powers of the Securities Commission

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Board of Directors Minutes

September 16, 1974
It was agreed that the following recommendations be incorporated into the brief to be prepared by David Wilder, Al Dexter and Bill Black.

Recommendations:

  1. that there be clarification of the offenses for which trading can be suspended or a person stopped from trading
  2. that the nature of the charges be made clear to those involved so that a defence may be prepared
  3. that the appeal procedure be structured to allow the use of lower court material by the B.C. Appeal Board
  4. that the same laws that apply to a criminal court regarding evidence provisions be applied to the tribunal, apart from an open court.

December 9, 1974
McElrod moved and Brian Maxwell seconded Mr. Wilder’s suggestion that the hearings arising from complaints should not be heard by the Commission supervising the statute. An alternative suggestion would be hearings by an administrative judicial system or, at least, an independent body (using a uniform code of procedures for administrative hearings). This latter matter will be referred to the administrative decision-making committee for consideration and recommendation.

Securities Commission Revision

There are three main areas in which the Securities Commission, acting through the Superintendent of Brokers, might make orders or determinations affecting the rights or livelihood of persons.

We are concerned that there be mechanisms where persons affected by the determination have the right to be heard, and decisions made only after a satisfactory collision occurs of the points of fact or at law at issue between the administrators of the Act and the persons affected.

These areas are:

  1. The admission of employment to and the continuation of employment in the securities industry.
  2. The clearance of securities offering documents pursuant to which the public was invited to make investment decisions regarding certain companies.
  3. The regulation and control of trading in securities.


In view of the decided cases, it would be better for both the commission and for the persons affected, especially those in categories 1 and 3, if the offences were more carefully defined and particularized in order that the persons concerned might have an opportunity to deal with any imputations of improper behaviour.

Upon reviewing the provisions for appeals as laid down in part 4 of the Securities Act SBC 1967, chapter 45 and amendments, it is important to note that the categorization of offences is not necessarily defective (although they require particularization), but the mechanisms for a hearing are not adequate to ensure a fair hearing.

The conduct of the enquiry does not meet the essential test of tribunal which deals with the public: the decisions arrived at should be determined after a satisfactory collision between the persons interested in obtaining a decision of the tribunal, the workings of the tribunal should be seen to be fair, and further, that as through time every tribunal must err, that satisfactory and effective means of appeal ought to be available.

At the present time, any person “primarily affected by a direction, decision, order or ruling of the Superintendent may by notice in writing… request to be entitled to a hearing and review thereof by the Commission”.

The new Commission (although it has been revamped by the recent government and no longer consists of three civil servants with no expert knowledge or involvement in the intricate fields of activity in which they are asked to render judgment) is still open to fundamentally the same objection. The judges on the appeal hearing are charged with the responsibility of general supervision of the civil service body. Without commenting on the integrity or the wisdom of the present officeholders, justice cannot be done or be seen to be done where the current tribunal has a continuing responsibility for supervision of the prosecutors.

Although the Court of Appeal has, in effect, an unlimited jurisdiction to review and, in that respect, the situation under the Securities Act appears better than in many other administrative proceedings, problems remain. For example, the delays in obtaining a hearing and the rules of the Court of Appeal in regard to the hearing of new evidence make the wide grounds of review not as promising as first reading of the Act might suggest.

As part of a systematic review of administrative tribunals operating under the laws of this province, we suggest that the Attorney General should consider the advisability of obtaining administrative law judges on the U.S. pattern who, with the assistance of properly formulated rules, enable the participants in a hearing to define the issues of fact and law upon which they seek relief prior to a hearing. In addition, evidence could be developed in a more cogent manner to allow the involved parties to know the nature of the proceedings and to have an opportunity to select their posture. Finally, in the event of an appeal, a satisfactory record of the hearing exists for possible review.

A regrouping of all the administrative tribunals under a single code of operating procedure would help provide a certain relief for persons subject to decisions adversely affecting them and otherwise, leaving them with no clear opportunity to have their legitimate interests considered.

The propriety of this suggestion becomes convincing, in this age of activist government, where the rationale for such appeals is the provision of adequate and appropriate forum to aid awareness of the legitimacy of all views as well as the need for the clarification of views on any related issue.