The Ontario Divisional Court in Fiorillo v. Ontario Securities Commission dismissed an appeal by a number of respondents who were found liable by the Ontario Securities Commission ("OSC") for insider trading. The appellants were convicted largely on the basis of circumstantial evidence and the tipper's compelled testimony before OSC Staff, since her counsel would not undertake to call her as a witness. The appellants appealed the merits decision, one appellant appealed a 15 year trading ban, submitting it amounted to a lifetime ban due to his age, and another appealed the significant monetary penalty levied against him.

The Divisional Court dismissed the appeal, holding a deferential standard of review applied and holding sanctions should not be overturned on appeal unless they were "demonstrably unfit". The Court held that it was not an error of law for the OSC to rely on compelled testimony as the entirety of the testimony before it, nor was it improper for Staff to attack the credibility of parts of the testimony because the tipper was adverse in interest to Staff.

In concurring reasons, Justice Morawetz held that the appellants attempted to re-argue the merits, and on appeal the Court should restrict itself to determining whether the OSC's inferences were supported by evidence.

This decision is significant because the Divisional Court applied a highly deferential standard of review, and confirmed recent trends that suggest that the OSC will have the final decision on matters that fall within its mandate, short of significant errors of principle.

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