Canada’s industry-led regulator of stockbrokers is scheduled, once again, to face a B.C. Securities Commission hearing panel to argue—in precedent-setting fashion—its own tribunal failed to adequately assess so-called “gatekeeper” roles in the public interest.

On June 1, the Canadian Investment Regulatory Organization (CIRO) is set to present to adjudicators, for a third time, its allegations that two Vancouver stockbrokers for Ventum Financial Corp. (formerly known as PI Financial Corp.) committed administrative misconduct, in a case that tests the scope of regulatory guardrails put in place against fraud and stock market abuse.

The regulator’s enforcement division initially alleged, in a Sept. 27, 2023, hearing notice that registered representatives Teymur Englesby and Cale Nishimura facilitated penny stock transactions, between December 2017 and October 2018, for West Vancouver resident Cameron Paddock, as well as other clients.

The pair was accused of not conducting proper due diligence of transactions involving shares of low-value companies that would later be linked by the commission to a group of consultants and firms known collectively as the Bridgemark Group, which was accused of illegally swapping shares and consulting contracts.

Paddock, a former director of hockey operations at the North Shore Winter Club, admitted in September 2023 to insider trading and conduct abusive to the capital markets. He paid a $200,000 penalty jointly with his recently formed consulting company Rockshore Advisors Ltd. via a settlement agreement with the commission.

CIRO’s enforcement division sought sanctions against Englesby and Nishimura, including a possible reprimand, fine, suspension, prohibition and/or disgorgement of the $147,081 worth of commissions from the alleged questionable transactions.

However, on July 22, 2024, a CIRO hearing panel exonerated Englesby and Nishimura of the allegations that the pair had failed to fulfill their duties as gatekeepers to the capital markets.

The CIRO hearing panel ultimately took a much broader definition of gatekeeper roles.

In a rare maneuver, CIRO counsel applied in August 2024 for a review of the CIRO hearing panel decision before the commission, which has oversight of CIRO and more typically reviews hearing panel decisions made against representatives or investment firms.

Lawyers for the stockbrokers then appealed CIRO’s application at the B.C. Court of Appeal, which is understood to now be in abeyance.

In April 2025, after reviewing the original decision, the commission determined the CIRO hearing panel made errors in law and failed to adequately consider the public interest.

The commission stated that the CIRO hearing panel had inferred facts that the respondents had never ascertained and thereby avoided questions that a gatekeeper would be obligated to look into.

And while the CIRO hearing panel accepted that consultants often sell shares of companies they work for, the commission stated “it was not automatic that any director of hockey operations at a local winter club can become a financial consultant and then almost instantly begin to make millions of dollars.”

In another instance, CIRO investigators noted “Client YK” received 500,000 shares from the CEO of the subject company “for what appeared to be no consideration.”

The CIRO hearing panel decision accepted Englesby and Nishimura’s explanation that they believed Client YK—described as a “student/homemaker” with no employer information—was an experienced investor and presented no red flags.

Ultimately, however, the commission remitted the case back to the CIRO hearing panel for reconsideration stating it were the best option to assess CIRO rules with commission direction.

At a new CIRO hearing in October 2025, the same panel came to the same conclusion and dismissed the action against Englesby and Nishimura.

The accusations against Englesby and Nishimura were never proven.

In what is understood to be a precedent-setting application, counsel for CIRO again applied for a review by the commission, which was again approved, leading all parties to the June 1 hearing.

In January 2026, in its second such application, CIRO counsel asserted the CIRO hearing panel overlooked material evidence and “in essence” re-issued “a new version of its initial decision” without accounting for direction from the commission.

Added counsel: “The panel’s conclusion on the gatekeeper obligation actually has the effect of rendering the obligation meaningless, or exceedingly limited in scope.

“The Panel’s conclusions effectively stand for the proposition that Registered Representatives, if they are able to craft a ‘reasonable explanation,’ have no obligation to make inquiries of, or confirm essential facts relative to, a client, and can in fact act as mere order takers,” stated CIRO counsel.

Englesby and Nishimura told investigators they did not review relevant Canadian Securities Exchange Form 9 documents, which include information about the private placements, such as the buyers, the number and price of shares, purchasing exemptions and relationships to the company.

If Englesby and Nishimura had reviewed these documents, the CIRO enforcement division argued, they could have been more informed to ask questions about the transactions.

At the original hearing PI Financial Corp.’s vice-president of compliance, corporate secretary and chief compliance officer Richard Thomas testified that the stockbrokers’ primary gatekeeping responsibility is to deal with Know Your Client (KYC) matters involving their clients and to root out suspicions of money laundering and market manipulation, neither of which were alleged to have occurred in the case at hand.

Furthermore, Thomas said reviewing Form 9 documents was not an obligation for his stockbrokers.

During the original hearing Thomas was chair of the CIRO Pacific Regional Council and CIRO National Hearing Committee. And while he has departed Ventum since, he remains listed as an adjudicating member on CIRO hearing panels for the Pacific district.

CIRO has reached two other settlements with B.C. stockbrokers who transacted for Bridgemark Group respondents.

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