Order: In the Matter of X and Y

April 10, 2007

Order

IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF X AND Y

ORDER
(Section 17 of the Securities Act)

WHEREAS an application (the "Application") has been made by the Applicants, for an order pursuant to subsection 17(1) of the Securities Act, R.S.O. 1990, c. S.5, as amended (the "Act"), authorizing the Applicants to use and disclose testimonial and documentary evidence of persons identified as A, B, C, D, E, F, G, H, I and J (the "Respondents") that was obtained by Staff of the Ontario Securities Commission ("Staff") under an order of the Ontario Securities Commission (the "Commission") made pursuant to section 11 of the Act, in order to provide the Applicants with the ability to make full answer and defence to criminal charges against them in the United States (the "U.S. Criminal Proceeding");

AND WHEREAS the Applicants are the subject of a Commission proceeding in Ontario, (the "Commission Proceeding"), commenced by a Notice of Hearing by the Commission pursuant to sections 127 and 127.1 of the Act, and accompanied by a Statement of Allegations issued by Staff;

AND WHEREAS the specific materials that are the subject of the Application are transcripts of examinations conducted under section 13 of the Act, documents that were the subject of the examinations, and documents produced at these examinations (the "Evidence");

AND WHEREAS the Commission heard the Application at a hearing held in camera on January 10 and 11, 2007;

AND WHEREAS the Commission consideredthe written and oral submissions of the Applicants, the written and oral submissions of the Respondents (except for Respondent H), and the written and oral submissions of Staff;

AND WHEREAS reasons and decisions of the Commission under section 17 of the Act are usually treated as confidential;

AND WHEREAS the Commission released its Confidential Reasons and Decision (the “Reasons”) on February 7, 2007;

AND WHEREAS in a memorandum dated February 7, 2007 accompanying the Reasons, the Secretary to the Commission indicated that the Panel wished to publish a redacted version of the Reasons and directed the parties to exchange comments for redacting the Reasons amongst themselves;

AND WHEREAS counsel for some of the parties to this Application have objected to the release of a redacted version of the Reasons on the ground that it would cause prejudice to the parties’ ability to make full answer and defence in the U.S. Criminal Proceeding;

AND WHEREAS the Commission held a hearing in camera on April 3, 2007, on notice to all of the Respondents, to consider the written and oral submissions of the Applicants, the Respondent I and Staff in relation to the publication of the Commission’s Reasons;

AND WHEREAS counsel for the Applicants, the Respondent I and Staff have agreed to the publication of a synopsis of the Reasons (the “Summary”) attached as Schedule A to this Order, subject to the following terms:

(i) the full Reasons will be published at the completion of the U.S. Criminal Proceeding (i.e., the completion of the U.S. criminal trial, and for greater clarity, all matters up to the sentencing process, if any); and

(ii) further application to the Commission may be made at any time, including prior to the completion of the U.S. Criminal Proceeding, on notice to counsel for the Applicants and Respondent I, for an order for publication of the full Reasons or a redacted version of the Reasons.

AND WHEREAS the Commission has considered the submissions of the parties and is satisfied that this Order is in the public interest by providing transparency as to the existence of the Reasons while ensuring that the concerns raised by counsel for some of the parties to the Application are addressed;

IT IS ORDERED THAT the Commission will issue the Summary for immediate publication, subject to the following terms:

(i) the full Reasons will be published at the completion of the U.S. Criminal Proceeding (i.e., the completion of the U.S. criminal trial, and for greater clarity, all matters up to the sentencing process, if any); and

(ii) further application to the Commission may be made at any time, including prior to the completion of the U.S. Criminal Proceeding, on notice to counsel for the Applicants and Respondent I, for an order for publication of the full Reasons or a redacted version of the Reasons.

DATED at Toronto this 10 th day of April, 2007.

“Patrick J. LeSage” Patrick J. LeSage	“Wendell S. Wigle” Wendell S. Wigle
“Carol S. Perry” Carol S. Perry

Schedule A

Synopsis of Confidential Reasons and Decision of the Ontario Securities Commission in respect of an application brought under section 17(1) of the Securities Act ( Ontario)

On February 7, 2007, the Commission dismissed an application brought by persons under s. 17(1) of the Securities Act (the "Act") to use compelled information, including compelled testimony of witnesses and documents (the “Evidence”), obtained by OSC Staff pursuant to an Investigation Order under s. 11 of the Act for a collateral purpose (i.e. for a purpose other than to make full answer and defence to OSC Staff allegations in a proceeding before the Commission). The applicants (who are not persons responsible for criminal law enforcement or regulators) requested an order of the Commission authorizing use of the Evidence in a pending U.S. criminal proceeding subject to certain terms and conditions. The Evidence was obtained from certain parties, including an accused in the U.S. criminal proceeding, pursuant to the Investigation Order under s. 11 of the Act.

Submissions were considered from counsel for the applicants, counsel for the parties and Staff of the Commission in an in camera hearing on notice to interested parties. The Commission denied the application, with the exception of granting limited relief to permit use of certain documents in the U.S. criminal proceeding, subject to terms and conditions. The party that had produced these documents received notice of the application and did not oppose the requested relief.

It is anticipated that the full Reasons and Decision will not be published until the completion of the trial of the U.S. criminal proceeding, subject to any application that may be made regarding the need for publication to address matters raising similar issues in proceedings before the Commission or the Courts.