Ruling limits powers of Quebec securities regulator to impose gag orders

Days before the former head of Canada’s largest engineering firm was formally charged with fraud, SNC-Lavalin Group Inc. won a key legal battle against the provincial securities regulator who unsuccessfully tried to keep details of an investigation  it was conducting into the scandal-ridden engineering powerhouse from the firm’s audit committee and external auditors.

In a ruling that limits the powers of the Quebec securities regulator to impose gag orders, the Quebec Court of Appeal clarified the procedures the Autorité des marchés financiers must follow when issuing non-disclosure orders. The appeal court also upheld a decision by a specialized tribunal that oversees the securities watchdog, which allowed an SNC-Lavalin executive under investigation to provide details to the company’s audit committee and its external auditors Deloitte & Touche.

“The Quebec Court of Appeal seems to have given the AMF a lot of latitude to use its discretionary powers but if it becomes excessive it will place limits,” observed Yves Robillard, a Montreal securities lawyer with Miller Thomson LLP. Continue reading “Ruling limits powers of Quebec securities regulator to impose gag orders”