The Ontario Securities Commission’s recent decision in Re Hutchinson confirmed the important role of cooperation with Commission Staff in reducing sanctions for breaches of Ontario’s securities law.


Donna Hutchinson worked as a legal assistant at a large Toronto law firm, assisting with merger and acquisition transactions. Through the course of her work, Ms. Hutchinson routinely gained access to non-public, confidential information regarding certain transactions. Ms. Hutchinson was alleged to have knowingly provided non-public information about six transactions to Cameron Cornish, another respondent in the proceeding, in violation of section 76(2) of the Ontario Securities Act, which prohibits insider tipping.

A Panel of the Ontario Securities Commission (the Panel) accepted a settlement agreement (the Agreement) reached between Donna Hutchinson and the Commission Staff which provided for a number of sanctions but notably excluded disgorgement of profits or administrative penalties.  Neither Mr. Cornish nor any of the other respondents were party to the Agreement.


The Panel noted that Ms. Hutchinson’s breaches of Ontario securities law were serious and could contribute to a lack of confidence in and cynicism towards the fairness of public markets. Although Ms. Hutchinson did not herself trade on the information, her tipping actions were sufficient to undermine public confidence in capital markets.

However, in accepting the Agreement, the Panel identified a number of mitigating factors:

  • Ms. Hutchinson’s acknowledgement of her involvement in the matter saved the Commission from having to expend further resources to establish her liability. The Panel also noted that there was some evidence of remorse on Ms. Hutchinson’s part;
  • Ms. Hutchinson’s employment was terminated, leaving her with extremely limited future career prospects in the legal industry and limited means to pay monetary sanctions;
  • In contrast to the larger profits made by other respondents in the proceeding, Ms. Hutchinson received relatively small profits as a result of her misconduct;
  • Ms. Hutchinson had no prior record of breaching Ontario securities law;
  • Ms. Hutchinson was not and had never been a registrant; and
  • Ms. Hutchinson had been manipulated by an experienced trader.  Based on these mitigating factors, the Panel held that the reduced sanctions proposed under the Agreement aligned with the policy objectives of the Revised Credit for Cooperation Program to promote self-policing, self-reporting, and self-correction by market participants of potential breaches or other conduct contrary to the public interest.
  • The sanctions against Ms. Hutchinson included a reprimand, mandatory resignation from any directorship or officer positions held by her, and time-limited prohibitions on trading, acquisition of securities, registration under the Act, or acting as an officer or director of any issuer, registrant, or investment fund manager.
  • In addition, the Panel emphasized Ms. Hutchinson’s cooperation with Staff, identifying it as a significant mitigating factor.  In March 2014, the Commission published Staff Notice 15-702, “Revised Credit for Cooperation Program” to encourage market participants to cooperate with Commission Staff in exchange for “Credit” in the form of narrower allegations, limited enforcement, reduced sanctions, and/or settlement. Ms. Hutchinson agreed to cooperate with Staff in its investigation of the other respondents and to testify against them in any future proceedings. Given that insider tipping cases tend to be difficult to prove and usually rely on circumstantial evidence, the Panel noted that Ms. Hutchinson’s direct evidence in the matter would be valuable in the proceedings against the other respondents.


Re Hutchinson is note-worthy because the sanctions against Ms. Hutchinson excluded disgorgement of profits and administrative penalties, which usually form part of the sanctions for insider tipping.  This decision stands in contrast to Cheng, Benedict et al, 2017 ONSEC 14, another insider tipping decision that imposed sanctions including disgorgement of profits and an administrative penalty in the amount of $5,500.  In differentiating between the conduct of Ms. Hutchinson and Mr. Rothstein, it appears the Panel placed significant weight on Ms. Hutchinson’s cooperation and her testimony against the other respondents.  While the Panel did suggest that its findings would be limited to the circumstances of this decision, it may open the door to future arguments that deterrence may be served, even with reduced sanctions.


The author would like to thank Kassandra Shortt, student-at-law, for her contribution to this article.