Recently, the Supreme Court of Canada denied Scott Gerard Beaudette leave to appeal an Alberta Court of Appeal decision that upheld the constitutional validity of the Alberta Securities Act provisions that allow the Alberta Securities Commission (ASC) to compel information during a regulatory investigation and provide it to foreign agencies.
As background, in 2012, the ASC served Beaudette with a summons requiring him to produce documents and to attend an examination as part of an ASC investigation. Beaudette refused to attend his examination, claiming the ASC would not provide written assurances that his evidence would not be shared with U.S. regulatory or law enforcement agencies without prior notice to him. In response to an ASC application in Court for his contempt, Beaudette then filed an application challenging the constitutionality of the ASC powers to compel evidence and share it with other agencies.
The Alberta Court of Queen's Bench dismissed Mr. Beaudette's application and confirmed that effective securities law enforcement demands that there be inter-jurisdictional cooperation and reciprocal assistance between the regulatory agencies including between Canada's regulatory enforcement agencies and the United States regulatory enforcement agencies.
On appeal, Mr. Beaudette again argued that the requirement to provide information concerning his securities activities in North America, coupled with the possibility that the ASC might share that information with the SEC and the US Department of Justice, would infringe on his right to liberty as guaranteed under section 7 of the Canadian Charter of Rights and Freedoms.
The Alberta Court of Appeal upheld the constitutionality of the summons and information sharing powers under the Charter and held that the relevant provisions of the Securities Act did not violate Mr. Beaudette's Charter rights. The Court of Appeal held that section 7 of the Charter is engaged "where state compulsions or prohibitions affect important and fundamental life choices" and such choices did not include the election to participate in a highly regulated industry. Our full case comment is available here.
The decision by the Supreme Court of Canada to deny Beaudette leave further confirms that in a highly regulated industry, such as the securities market, the individual is aware of, and accepts, justifiable state intrusions. The purpose of the securities legislation and enforcement agencies are to regulate the market, something that often requires inter-jurisdictional sharing of information.
Andrew Pozzobon's detailed analysis of the Alberta Court of Appeal's decision can be viewed here.