Rep’s possible harm not enough for stay

The prospect that a rep may lose clients, or miss out on commissions, due to a regulatory sanction that’s under appeal doesn’t meet the test to justify a stay of those sanctions, Ontario’s Capital Markets Tribunal ruled.

Last month, the tribunal declined to order a partial stay of the sanctions imposed by a panel of the Canadian Investment Regulatory Organization (CIRO) against Peter Michael Deeb, the former CEO, UDP and registered rep at Hampton Securities Ltd.

Earlier this year, a CIRO panel ordered various sanctions against Deeb, including a one-year suspension from approval as a rep, a three-year prohibition on being registered as an executive, and a permanent ban on serving as a UDP, along with monetary sanctions, after it found that he breached CIRO’s rules.

Deeb is seeking a review of that decision by the tribunal, and in the meantime, sought a partial stay of the sanctions — allowing him to continue working as a rep, and to remain chair at Hampton Securities, and chair and CEO of its parent company, pending the outcome of the review. That is scheduled in October.

Today, the tribunal issued its reasons for denying that motion for a stay, which was opposed by staff of both CIRO and the Ontario Securities Commission (OSC).

In its reasons, the tribunal said that Deeb failed to prove that he will suffer “irreparable harm” if a stay is not granted.

According to its decision, Deeb argued that the suspension from working as a rep will cause him to suffer financial losses that will not be recoverable if he prevails in his appeal — but CIRO and the OSC argued that his evidence on this point was “weak” and/or “speculative,” and is evidence of “possible” harm, but not certain, irreparable harm.

The tribunal agreed with the regulators, concluding that Deeb did not meet his evidentiary burden of establishing irreparable harm.

And, it said, that even if it accepts that some financial loss is likely because he can’t earn commissions, “it does not, in our view, take Deeb over the evidentiary hurdle he faces in establishing irreparable harm.”

“… we find Deeb’s evidence that he will suffer, as a result of the suspension of his registered representative registration, either a loss of clients or a financial loss that cannot be cured to be ‘unconvincing,'” the tribunal said.

As a result, it dismissed Deeb’s stay motion.