British Columbia Securities Commission grants hearing and review of Canadian Investment Regulatory Organization decision and remits Englesby and Nishimura matter

The British Columbia Securities Commission issued a ruling granting the Canadian Investment Regulatory Organization’s request for a hearing and review of a CIRO disciplinary decision that had dismissed allegations that Teymur Englesby and Cale Nishimura breached their gatekeeper obligations. The Commission found review warranted and returned the matter to a CIRO hearing panel for reconsideration on the correct approach. Englesby, a registered representative with Ventum Financial Corp. (formerly PI Financial Corp.), and Nishimura, his assistant and also a registered representative, were investigated over alleged failures to respond to warning signs in several client accounts, where activity in and around 2018 generated indicators of potentially suspicious activity. In allowing the review and rejecting the respondents’ application to strike it, the Commission held that CIRO is directly affected by the original decision and that there is sufficient distinction and independence between CIRO staff and CIRO hearing panels such that CIRO is not appealing its own decision when it seeks a hearing and review. The Commission also found the CIRO panel proceeded on an incorrect principle by assessing whether there was a plausible explanation for the warning signs, rather than whether the warning signs required inquiries, and concluded the panel made an error in law and failed to adequately consider the public interest. The proceeding has been remitted to the CIRO hearing panel to decide on an approach consistent with the Commission’s ruling.