News Release

Ontario Securities

20 Queen St. W.
Box 55, Suite 1900
Toronto, ON M5H 3S8
Commission des valeurs mobilières de l'Ontario

December 21, 2010

Ontario Divisional Court upholds OSC decisions and sanctions
in matter of Watt Carmichael Inc., et al

TORONTO – On December 16, 2010, the Ontario Superior Court of Justice (Divisional Court) dismissed an appeal of two OSC decisions brought by Watt Carmichael Inc., Roger Rowan, Harry J. Carmichael and Michael McKenney. The Divisional Court dismissed the appeal on all grounds and awarded $25,000 in costs to the OSC. The appeal included a constitutional challenge to the Commission’s ability to order administrative monetary penalties.

The Appellants had appealed from the merits and sanctions decisions of the OSC in this matter dated June 20, 2008 and December 21, 2009. These decisions found each of the Appellants to have engaged in serious violations of Ontario securities law and conduct contrary to the public interest and ordered significant sanctions against each appellant, including administrative penalties exceeding $1.2 million against Roger Rowan, Watt Carmichael Inc. and Harry Carmichael. The Commission also dismissed a constitutional challenge regarding its ability to order administrative penalties

In its merits decisions, the Commission found that Roger Rowan, who was an insider of Biovail and also a registered representative for certain trust accounts, repeatedly breached section 107 of the Securities Act by failing to file insider trading reports and had engaged in abusive conduct by repeatedly trading in Biovail securities during the company’s blackout periods. In addition, Rowan had engaged in conduct contrary to the public interest by failing to disclose Biovail securities over which he exercised control or direction. The Commission also found that Watt Carmichael Inc., Harry Carmichael and Michael McKenney failed to adequately supervise Rowan’s trading in Biovail securities.

Oral reasons for decision were delivered by the Divisional Court and the Commission anticipates receiving a transcript of the reasons in due course.


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Director, Communications & Public Affairs

Dylan Rae
Media Relations Specialist

Theresa Ebden
Senior Communications Specialist

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