Drabinsky back in securities spotlight
The Ontario Securities Commission has begun hearings on whether theatre impresario and convicted fraudster Garth Drabinsky should be banned from capital markets because of his role in the Livent Inc. accounting scandal of the 1990s.
The hearings before the three-member OSC panel, led by commission vice-chair Grant Vingoe, began Wednesday and are scheduled to run until next Tuesday, with counsel to reappear on March 10 for closing arguments.
The sole issue is whether it’s in the public interest for Canada’s largest provincial securities regulator to kick the legendary theatre producer out of the capital markets business.
Drabinsky’s conduct is not in dispute. He was convicted of two counts of criminal fraud in 2009. An Ontario trial judge found that Drabinsky arranged for financial statements to mask a kickback scheme ahead of Livent’s 1993 initial public offering. The judge also found that Drabinsky directed Livent to issue financial statements that falsely overstated the company’s financial health while it was raising about $500 million from investors.
Drabinsky was sentenced to six years in jail and was released on parole in 2012.
OSC staff want the panel to slap him with a lifetime ban that would prevent him from serving as an officer, director or promoter of a company regulated under Ontario securities law.
Drabinsky is not challenging the facts found in the criminal rulings, but is fighting the complete capital markets ban sought by OSC staff.
His lawyer, Richard Shekter, said in a brief reply Wednesday that the OSC’s request is “enormous overkill” because it would effectively prevent his client from continuing to work in the entertainment business.