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Livent co-founder Garth Drabinsky leaves the Ontario Superior Courthouse in Toronto on March 25, 2009.Chris Young/The Canadian Press

Garth Drabinsky admits to his role in directing a fraud at defunct theatre company Livent Inc. but is dedicating his life to "making things right" and wants the ability to run his own family-controlled company, his lawyer told an Ontario Securities Commission hearing Wednesday.

In opening remarks at Mr. Drabinsky's long-awaited OSC hearing, lawyer Richard Shekter said Mr. Drabinsky is not challenging the allegations of wrongdoing levelled against him by the commission, but only the OSC's proposed penalties in his case. The regulator wants to ban Mr. Drabinsky from trading securities in Ontario and acting as a director or officer of a company following his fraud conviction in 2009.

Mr. Shekter said Mr. Drabinsky, 67, made a settlement offer to end the OSC's case, but it was rejected because the commission did not agree with proposals to allow Mr. Drabinsky to own and manage a private family company and to trade public securities for his retirement accounts.

The OSC's proposed penalties amount to "enormous and unmitigated overkill," Mr. Shekter said, adding Mr. Drabinsky has had 19 years of "unblemished conduct" since Livent's collapse in 1998.

"Mr. Drabinsky did the things that are alleged between 1993 and 1998 – between 19 and 24 years ago," Mr. Shekter said. "Since that time, he has dedicated himself to making things right …He served hard time, which was a sobering experience. He has not only learned his lesson, he has turned it around."

Mr. Shekter said some of Canada's most prominent business executives will testify on Mr. Drabinsky's behalf at the OSC hearing in Toronto this week, including Geoff Beattie, a director at Royal Bank of Canada; former federal Court of Appeal justice Allen Linden; and Richard Stursberg, former head of English-language services at the CBC. Mr Stursberg is now CEO of Teatro Proscenium Inc., which is producing Mr. Drabinsky's new live theatre show, Sousatzka, opening for previews on Saturday.

"The gentleman who is in this room today is not the gentleman you heard about in the course of the trial … He acknowledges culpability," Mr. Shekter said. "He feels terrible about what he did and he has made it his life's mission to fix it."

The OSC's case against Mr. Drabinsky has faced a series of delays since the regulator initially levelled its allegations in 2001. It was put on hold while Mr. Drabinsky and two other former Livent executives stood trial criminally, and the delays continued while Mr. Drabinsky and Livent co-founder Myron Gottlieb appealed their convictions and served prison terms.

Mr. Drabinsky and Mr. Gottlieb were convicted of fraud in 2009 and were sentenced to five years and four years in jail, respectively, but both have since been released.

A third accused, former vice-president of finance Gordon Eckstein, pleaded guilty to fraud in 2007 and received a conditional sentence of two years less a day.

OSC lawyer Pamela Foy told the hearing panel that appropriate penalties in a case such as Mr. Drabinsky's include a complete ban from serving as a director or officer of a company and a ban from trading securities in Ontario.

She said there is no precedent for allowing the exceptions Mr. Drabinsky is seeking because he was the key person who directed the fraud. He does not need the "carve outs" to be able to earn a living, she added.

Mr. Drabinsky has already set up a business structure to work as a creative producer developing new shows. Under that structure, he does not own the production company and works as an employee who draws a salary based on profits and royalties the projects earn. Those profits flow into a trust set up in the benefit of his family, Ms. Foy said.

"This is not a true question of livelihood here," she said.

Mr. Shekter, however, said Mr. Drabinsky needs more flexibility to direct a family company so that it can be structured to minimize tax costs. He said there is no danger to the public if Mr. Drabinsky holds or trades shares in a private company. He said Mr. Drabinsky would also like the ability to return to the OSC in four years for approval to set up other private companies to own other theatre ventures if his work is a success.

Ms. Foy said the OSC's goal is to protect the capital markets, not to protect Mr. Drabinsky's interests, noting he "is not the victim in this proceeding."

"Mr. Drabinsky has every right to continue to earn a living in the entertainment industry or otherwise," she said. "He does not however have a right to continue to participate in the capital markets."

Mr. Gottlieb and Mr. Eckstein reached voluntary settlements with the OSC in 2014 and 2015, and both were barred for life from working as directors or officers of companies, but Mr. Eckstein was granted an exception to continue serving as an officer of the company he has worked for since 2003.

Mr. Gottlieb's settlement also included a 15-year ban from trading securities, but he was allowed an exception for his own registered retirement savings plan.