Former Toronto investment banker Andrew Rankin, who admitted in a 2008 settlement with the Ontario Securities Commission to tipping a friend about impending takeover deals, is trying to turn back the clock and clear his name.
The former managing director of RBC Dominion Securities Inc. was back before an OSC panel on Thursday, asking that the settlement - which saw him fined $250,000 and banned for life from the securities business - be set aside.
The three-member panel reserved judgment. The 46-year-old Mr. Rankin, who now lives in California, had no lawyer and for the most part argued the case himself.
His father, John Rankin, a doctor who has been at his son's side for most of the ordeal, also addressed the panel. Mr. Rankin's sister, who sat close by, passed him documents.
The blockbuster case, pursued by the OSC for seven years, involved a six-week trial in 2005 that found Mr. Rankin guilty of 10 counts of tipping. But an appeal court ordered a new trial.
On the cusp of that second trial in 2008, after tense talks, Mr. Rankin agreed to a settlement with the OSC that involved lesser regulatory penalties to avoid going back to court. It was seen as a partial defeat for the OSC, long criticized for failing to aggressively pursue insider trading.
Now, Mr. Rankin says he would never have signed that deal had he known that the OSC's star witness against him, his old Upper Canada College friend Daniel Duic, was under investigation for breaching an order in his own settlement with the OSC that banned him from trading stocks in Ontario.
Mr. Rankin argued that if his lawyers had had the transcripts of the interviews OSC investigators did with Mr. Duic, they could have used them at a second trial to undermine the prosecution's main witness.
"It is my strong, firm belief they would have had a direct bearing on my case," Mr. Rankin told the panel. " ... I frankly would have made a different decision. I would never have settled, period."
It was Mr. Duic who profited from the information gleaned from Mr. Rankin, making about $4.5-million in illegal insider trading. Mr. Duic settled with the OSC in 2004, agreeing to pay back $1.9-million of his proceeds and testify against Mr. Rankin.
In his settlement, Mr. Rankin admitted he was negligent in tipping his friend about pending deals. But he denied knowing that Mr. Duic was trading based on the information.
OSC lawyer Scott Fenton told the panel that the commission did disclose the existence of the Duic investigation to Mr. Rankin's lawyer, David Humphrey, at a meeting in late 2007, and that the breach was later deemed "inadvertent" by an OSC panel.
Mr. Rankin said Mr. Humphrey never told him about it, and does not recall being told. Mr. Rankin said he had taken the issue to the Law Society of Upper Canada.
The OSC argued that Mr. Rankin's settlement should stand. Mr. Fenton said Mr. Rankin made "clear-cut admissions" of wrongdoing not only in his settlement, but through his lawyers in the settlement hearing. "We maintain, respectfully, that the appeal is utterly devoid of merit," Mr. Fenton told the panel.
Mr. Fenton said the provision of the Ontario Securities Act that allows Mr. Rankin to apply to have his settlement set aside is "rarely used" and was never intended to allow for what is essentially an appeal. Doing so for Mr. Rankin would "open the floodgate" for others found to have violated OSC rules.
"There would be no finality to the orders of the commission," Mr. Fenton said.
Before Mr. Rankin began his presentation, OSC vice-chairman James Turner, heading up the three-member commission panel, told him that without legal affidavits to back up his claims, the panel had very little evidence before it. And Mr. Turner warned Mr. Rankin that his chances of successfully persuading the OSC to toss out his settlement were low. "It is a very high standard that's going to have to be met before this panel is prepared to do that," Mr. Turner said.
Jeff Gray