Ontario's securities regulator has ordered Brian Costello, one of the country's best-known financial commentators, to pay $300,000 in costs as part of sanctions for violating provincial securities laws.
The Ontario Securities Commission also reprimanded Mr. Costello after it found he contravened provincial legislation by acting as a financial adviser without registering with the OSC, and ruled he failed "to make full, complete and conspicuous disclosure of his many conflicts of interest."
But the three-person panel, in its February decision, dismissed a third count that alleged Mr. Costello traded in securities without a licence.
In Wednesday's statement, the OSC said evidence during the hearing "repeatedly showed that a principal purpose of Costello's seminars was lead generation."
"The standard routine used by Costello included collecting names of participants and distributing marketing material to them, and incorporated various marketing techniques of which consumers and investors should be wary at educational seminars," the regulator said.
The OSC panel also found that "good educational material should be balanced and free from marketing bias. It should not serve as bait to lead the unsuspecting to specific securities or service providers."
"It would be a disservice to investors, and undermine the efforts of conscientious educators, for us to endorse the view presented by counsel for Costello that Costello's seminars were primarily educational in nature," the panel said.
In addition to ordering Mr. Costello to pay hearing and investigation costs of $300,000, the panel also ordered that he submit to a review of his practices and procedures as an advisor from the hearing's start date of Nov. 11, 2002, to April 29, 2003.
As well, the regulator ordered that the registration exemption under the Ontario Securities Act for a publisher or writer for a newspaper, newsletter or financial publication not be available for five years.
"The review we are ordering will determine if he has ceased to be a registrant, and if not, what changes should be instituted regarding his practices and procedures," the panel said in Wednesday's decision.
"Further, if Costello gives advice regarding specific securities in an isolated instance at a future time, it would be appropriate for the commission to take into account his past practices, including those at issue in this case, in determining whether at such future time he was engaging in the business of advising others."