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Heather Zordel, a Bay Street lawyer, was appointed in March by Ontario’s Progressive Conservative government, Premier Doug Ford, to head the Ontario Securities Commission.Ryan Walker/The Globe and Mail
Heather Zordel, the new chair of the recently restructured Ontario Securities Commission, has resigned, just seven months after being appointed to head the board of directors of Canada’s largest securities regulator.
Zordel, a Bay Street lawyer, was appointed in March by Ontario Premier Doug Ford’s Progressive Conservative government, prompting the immediate resignation of two senior board members in protest.
Ontario Finance Minister Peter Bethlenfalvy received Zordel’s resignation on Friday, effective immediately, spokeswoman Emily Hogeveen confirmed Monday.
“We thank Ms. Zordel for her work to modernize the governance and mandate of the OSC and bring Ontario closer to one of the most attractive capital markets jurisdictions in the world,” Ms. Hogeveen said in a statement sent by email. “We will have more to say about the new chair in the near future.”
Ms. Zordel could not immediately be reached for comment.
She was the first chair chosen under the OSC’s new structure, put in place earlier this year to modernize the regulator. Under the old system, the regulator was overseen by a group of commissioners who functioned like a traditional board of directors, but who also acted as arbiters in enforcement proceedings. The new structure separated the tribunal from the council. Ms. Zordel was only the second woman in OSC history to serve as Chair.
But when Ms Zordel’s appointment was announced in March, it immediately caused a stir. Ms Zordel had a controversial previous term as commissioner between 2019 and 2021, which ended shortly after a majority of peer commissioners opposed her reappointment. His election as president just over a year later prompted two sitting commissioners – senior director Lorie Haber and Craig Hayman, the chair of the OSC’s governance and nominating committee – to resign in protest.
She has also come under fire from investor protection advocates for some of the views she adopted in two decisions she worked on during her first stint at the OSC.
In both cases, she was part of a three-person arbitration committee, but partly opposed the majority. His dissents were two of three dissents in OSC enforcement proceedings over the past decade, according to the regulator’s records.
In her dissents, Ms. Zordel differed from the other two members of each decision-making committee on several fundamental securities law issues. These questions include what constitutes material nonpublic information (MNPI), which can lead to insider trading. She also disagreed with other panelists on how much leeway an investment fund has to deviate from its offering memoranda before its shares become fraudulent.
Although dissenting opinions are considered an important part of the case law and allow for a range of opinions, Ms. Zordel’s findings have been criticized by investor protection advocates for being too lenient to questionable conduct and, in d other cases, incorrect in law.
Philip Anisman is a securities lawyer with extensive professional experience, including adjudicating cases as OSC Commissioner and defending clients accused of wrongdoing. He said Ms Zordel’s dissents were well written, but some of the views she espoused in them would, if enacted into law, set back investor protections between 50 and 100 years.
“One has to wonder if the government, in appointing someone who shares these views, has itself an orientation toward securities regulation and investor protection that is inconsistent with the history of securities regulation in this country to date,” Mr. Anisman said.
In its latest annual report, the OSC also revealed that Ms Zordel was its highest paid part-time commissioner during its most recent fiscal year, from April 1, 2021 to March 31, 2022 – despite the fact that she was not Commissioner during this period.
Ms. Zordel won nearly $243,000, the vast majority of which was paid for the hours she spent researching and writing up her dissenting opinions in those two cases. Although she was not a serving commissioner during this time, she was required to review submissions in cases, research the law, and issue rulings. The second highest paid part-time commissioner in the OSC’s last fiscal year earned $133,500.
During the period that Ms. Zordel submitted her invoices, the OSC paid the part-time commissioners on a daily basis, or a daily rate. Guidelines at the time, which have since changed, state that the maximum a part-time commissioner can charge in a 24-hour period is $1,500.
Ms. Zordel has spent most of her legal career advising entrepreneurs who run junior mining and energy companies, as well as growth-oriented technology companies and private companies, which tend to be riskier investments than larger ones. established companies. Prior to her appointment as President, she was a partner at Gardiner Roberts LLP.
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