Court of Appeal of Quebec

Autorité des marchés financiers c. Forget

September 05, 2018

500-10-006355-174

Bich, Rancourt, Gagné

Appeal from a judgment of the Superior Court dismissing an appeal from a judgment of the Court of Quebec acquitting the respondents of charges brought under the Securities Act (CQLR, c. V-1.1). Dismissed.

The appellant faulted the respondents, an insider and his broker, for their respective roles in the manipulation of the reporting issuer’s security.

The actus reus of the offence described in s. 195.2 of the Act requires, first, a demonstration according to the objective standard of a reasonable person of a dishonest act, to wit, “unfair, improper or fraudulent practices”. Due to its broadness, this notion can be likened to the “fraudulent means” referred to in s. 380(1) of the Criminal Code (R.S.C. 1985, c. C-46). In this case, the lower court judges were right to find that, although some aspects of the transactions appeared suspicious (including the circumstances in which they took place and the lack of insider report), the prosecution had not proved dishonest conduct beyond a reasonable doubt. Consequently, there is no need to consider the second element of the actus reus or the issue of mens rea, which, for its part, would have required proving that the accused had intentionally or recklessly performed one of the prohibited acts while knowing or without concern that it would our could influence the market price of the security.

Moreover, for a person to be convicted under s. 208 of the Act for aiding another person in the commission of an offence, it must first be proved beyond a doubt that the offence in question was in fact committed, something that the prosecution has failed to do here, even if certain telephone conversations that were excluded from the evidence with respect to the first respondent, but not his broker, are taken into account. Finally, the Superior Court judge was right to state that the trial judge’s error of characterizing the broker as a person in a position of authority is not determinative.

*Summary by SOQUIJ

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