Ontario Division Court Dismisses All Grounds of Appeal by Marchment and MacKay, Charles Ornstein and Amit Sofer

TORONTO - On July 16, a three member panel of the Ontario Divisional Court released Reasons for Judgment in an Appeal of a Commission decision, Marchment & MacKay v. Ontario Securities Commission. At the hearing held on June 24, 2002, the Divisional Court dismissed all grounds for appeal raised by Marchment & MacKay, Charles Ornstein and Amit Sofer and awarded costs of $20,000 to be paid to the Ontario Securities Commission by July 24, 2002.

The Divisional Court considered whether the disclosure made by Staff was adequate, and referred to the decision of the Ontario Court of Appeal in Deloitte & Touche v. Ontario Securities Commission (released June 13, 2002). The Reasons stated that "even if there was a failure in the disclosure obligation, there was no prejudice to the appellants... The case against the appellants was the testimony of ten witnesses who were strangers to each other and of various backgrounds. In circumstances where no collusion is alleged, these witnesses individually and cumulatively testified to a detailed and extensive pattern of similar conduct in sales practices that in our view constituted an overwhelming case against the appellants."

The appeal was from a decision made August 3, 1999 in which the Commission found, among other things, that Marchment MacKay, Orstein, and Sofer had breached the duties owing to their clients and failed to act honestly, in good faith and in the best interests of their clients. The Commission ordered that, among other things:

• Marchment MacKay's registration be terminated and any exemptions under Ontario securities law were permanently no longer available;
• Orstein's registration was terminated and any exemptions under Ontario securities law were permanently no longer available, providing that after two years Orstein could trade on a restricted basis on his own account and in his RRSP; and
• Sofer's registration was suspended and any exemptions under Ontario securities laws were not available for a period of ten years, provided that after one year Sofer could trade on restricted basis on his own account and in his RRSP.

Copies of the Reasons for Judgment are available on the Commission's website at www.osc.ca or from the Commission, 19th Floor, 20 Queen Street West, Toronto, Ontario M5H 3S8.

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