The hearing process before the British Columbia Securities Commission (Securities Commission) will be influenced by two important decisions: one from the Securities Commission itself, relating to televised hearings; and another from the Office of the Information and Privacy Commissioner for British Columbia (Privacy Commissioner) regarding the Securities Commission’s disclosure obligations. Both decisions show that practice before the Securities Commission continues to evolve, making it important for capital markets participants to stay apprised of recent developments.
On April 29, 2015, the Securities Commission issued a ruling in Re Williams and others, 2015, permitting CTV’s application to televise portions of an upcoming enforcement hearing. Certain conditions and restrictions were imposed, including the ability for any witness, counsel or other participant in the hearing to refuse to be recorded. A delay of at least two hours between the conclusion of the session and broadcast of the session recording is also required.
The presence of a TV news crew at a Securities Commission hearing is a novel event. It remains to be seen whether recording proceedings will become a regular occurrence and what impact it will have on the hearing itself.
PRIVACY COMMISSIONER DECISION
The Privacy Commissioner’s decision in Re BC Securities Commission, Order F15-08 is expected to impact
pre-hearing procedures. The decision also serves as a reminder of the often overlooked but powerful tool of freedom of information (FOI) requests for persons dealing with the Securities Commission, as well as other government authorities.
The target of an investigation by the Securities Commission requested information relating to himself and companies associated with him.
The request was initially denied by the Securities Commission, which availed itself of section 15(1)(a) of British Columbia’s Freedom of Information and Protection of Privacy Act (Privacy Act) on the basis that disclosure would harm a law enforcement matter.
Initially, the Securities Commission made certain applications to the Privacy Commissioner including:
- Requesting that the Privacy Commissioner exercise its discretion to refuse to hold an inquiry under section 56 of the Privacy Act
- Seeking authorization to disregard the respondent’s request for records on the basis that the request was frivolous or vexatious for the purposes of subsection 43(b) of the Privacy Act, claiming that the request interfered with the purposes of the B.C. Securities Act to establish the Securities Commission as an independent tribunal
- Claiming that the FOI process was an attempt to delay enforcement proceedings against the respondent.
The Privacy Commissioner rejected that application holding that the legislature intended that the Privacy Act prevail over other legislation and remitted the matter to inquiry: Re BC Securities Commission, Order F14-24.
Following such applications, the Securities Commission disclosed some of the previously withheld information but asserted a new basis to refuse disclosure: solicitor-client privilege as set out in section 14 of the Privacy Act, which includes litigation privilege.
The Privacy Commissioner rejected the Securities Commission’s argument that documents relating to cooperation with Ontario Securities Commission investigators were protected by solicitor-client privilege. Furthermore, the litigation privilege claim was not sustained for the majority of documents because the Securities Commission failed to establish that such documents were mainly created for litigation purposes.
A total of 567 records were in dispute. Only 23 of those records were held to have been appropriately withheld. The 544 documents that were ordered disclosed included email communication between Securities Commission investigators and investigators of other regulatory bodies and financial institutions.
The possibility of televised hearings before the Securities Commission has implications for market participants. It is too early to assess the impact this new development will have on procedure.
Regarding FOI requests, individuals or corporations involved with public bodies should consider such requests in appropriate circumstances, including when facing inquiries from or investigations by regulatory authorities. Following a written request, the head of a public body must “make every reasonable effort to assist” an applicant and “respond without delay” to such application “openly, accurately and completely.” Practically speaking, however, there are numerous bases for a public body to delay disclosure. Accordingly, early information requests are critical to ensure the viability of FOI requests as a litigation strategy.