Appeals to the Ontario Securities Commission from IIROC discipline panel decisions are relatively uncommon. A decision released at the end of 2013 shows the heavy burdens faced by parties who initiate the hearing and review process at the OSC.
In Northern Securities Inc. et al, an IIROC member firm and certain of its officers appealed by way of hearing and review the disciplinary decision of a three person hearing panel. The OSC released reasons nine months after the OSC hearing.
The IIROC panel had held a merits decision in May and June of 2013 and a sanctions hearing in October, 2012. The IIROC panel did not issue Reasons for the merits decision before the sanctions hearing but rather issued combined reasons in November, 2012.
The OSC emphasized, as it has in previous decisions, that while it enjoys a broad statutory discretion to interfere with and remake IIROC decisions, it will exercise great restraint in exercising that discretion. This OSC approach translates into deference for most IIROC panel findings”. The applicant seeking to overturn the IIROC finding has a “heavy burden” of persuasion. Usually, this requires a showing either of legal error or of a failure to properly analyze evidence at the hearing.
Deference displayed by the OSC for IIROC is based partly on the specialized knowledge panels bring as to industry standards. IIROC panels are entitled, because of their specialized knowledge, not to receive expert evidence as to industry standards. It is only a legal error not to receive such evidence where the evidence is demonstrably necessary to a panel to make its decision.  Because of these principles, an IIROC panel can determine what constitutes “conduct unbecoming” without IIROC defining the concept in a rule.
Still, in rare cases, an IIROC panel can make mistakes that will not survive a hearing and review. Perhaps the most significant error made by the IIROC hearing panel in Northern Securities was to hold a penalty hearing before issuing reasons on the merits especially when counsel for the Northern Securities respondents had asked the panel not to hold the penalty hearing before issuing their reasons on the merits. Issuing a merits decision in advance of the penalty hearing was found by the OSC to be necessary to achieve procedural fairness in a complex case in which heavy penalties were imposed. Not to afford that procedural fairness was an error of law. The OSC panel was clearly influenced by the fact that some sanctions imposed by the IIROC panel exceeded what IIROC had recommended.
 See s. 21.7 of the Securities Act (Ontario).
 OSC Reasons, para. 6.
 OSC Reasons, para. 7.
 OSC Reasons, para. 8.
 OSC Reasons, para. 49. See also Re Boulieris (2004) 27 OSCB 1597. See also Re TD Securities Inc. http://www.osc.gov.on.ca/en/Proceedings_rad_20130719_td-securities.htm at para. 61 and following.
 OSC Reasons, para. 54 and following.
 OSC Reasons, paras. 244 – 245.
 OSC Reasons, para. 256.
 OSC Reasons, para. 297.
 OSC Reasons, para. 305.