An Ontario Capital Markets Tribunal adjudicator stepped aside from an enforcement hearing after learning that the securities regulator planned to call a former Purpose Investments employee she knew socially. The respondents wanted her to stay, but the Ontario Securities Commission objected to having her assess the testimony of its own witness.
In Ontario Securities Commission v Purpose Investments Inc, 2026 ONCMT 26, adjudicator Andrea Burke gave reasons on June 4 for her April 10 order granting the commission’s recusal motion. The commission alleged that Purpose and Som Seif made misleading or untrue statements about how extensively Purpose considered environmental, social and governance factors when making investment decisions for its funds. The ruling concerned who would hear those allegations.
Burke disclosed the connection before the merits hearing. She had worked with the witness’s spouse at a law firm, attended their wedding and continued to see the couple socially, although infrequently. Her preliminary view, subject to the parties’ submissions, was that she could sit. The commission said the anticipated testimony was central to its case and the panel might have to assess the witness’s credibility. It did not allege actual bias.
Burke applied the perspective of an informed person looking at the circumstances realistically. Would that person conclude it was more likely than not that the adjudicator would decide unfairly, consciously or unconsciously? The commission bore the burden of overcoming the presumption of impartiality. It did not have to show which party the relationship might favour.
The respondents argued that overlapping professional and social ties were common in Canada’s capital markets community. They said the witness had no stake in the outcome and that further delay could compound the reputational impact of the unresolved proceeding. Burke found no evidence that the commission sought recusal to delay the hearing. She also rejected the suggestion that the reasonable observer should be drawn from within the industry. The tribunal serves investors beyond that professional circle, she explained.
What mattered was the prospect that Burke would have to assess significant evidence from someone whose habits and mannerisms she already knew. A reasonable observer could expect her to have formed views about his credibility through their social relationship. Even a decision to caution or instruct him during the hearing might carry social consequences that could influence her judgment. Burke concluded that her recusal was required.
The tribunal’s July 10 notice subsequently scheduled the merits hearing to continue on dates in July and September.
Source: Ontario Securities Commission v Purpose Investments Inc, 2026 ONCMT 26. Read the decision on CanLII.
