They also challenged the regulator’s refusal to publish the company’s application for a hearing before the Financial Services Tribunal (FST) in response to proposed enforcement proceedings against the company – a decision the company considered inappropriate.
According to the court, Gerstel and the company argue that the regulator’s decisions are “unreasonable, illogical, unjustified and unfair” and that they “appear to be arbitrary.”
“There is no reason why the public should not have access to the applicants’ request for a hearing following (the publication of the regulator’s allegations),” their application states.
However, the court ruled in favor of the regulator, ruling that the FSRA’s policy was reasonable and not amenable to judicial review because it did not affect “the legal rights or obligations of applicants.”
“The publication of the transparency guidelines is appropriate – as is the process through which they were developed – and it serves the public interest,” the court concluded.
In its decision, the court found that the FSRA’s policy of publishing its enforcement allegations “is consistent with the practice of many other regulators that publish their enforcement actions before a disciplinary tribunal decides the matter.”
The court also said a request for a hearing could contain “false information or otherwise objectionable material.”
“The applicants have not demonstrated that the decisions to issue the transparency guidelines, to publish the (allegations) and not to publish the (company’s request for a hearing) have any impact on the fairness of their hearing before the FST,” the court said. “Decisions to adopt general guidelines are not subject to the duty of fairness.”
In this case, the tribunal has yet to hold its hearing and if the company appeals against any of its decisions, it has the right to seek judicial review of those findings, the court noted.
“Although those affected by regulatory action often disagree with the allegations made by the regulator, there is a comprehensive statutory remedy, namely a rehearing before the FST,” the court said.
“If the conduct of the FSRA jeopardises a procedurally fair hearing, the FST may make such orders as are necessary to control the proceedings and remedy the situation. If applicants wish to challenge the FST’s decision, they should do so directly by applying for a judicial review of the FST’s decision,” it says.
