Woman wants securities ruling overturned
Pastuch in Court of Appeal over 2014 ruling and sanctions involving her firms
Three years after she was found violating securities regulations and ordered to repay some of the $5.6 million invested in her companies, a former Regina businesswoman was before the province’s top court in a bid to reverse those decisions.
Alena Marie Pastuch, representing herself before Saskatchewan Court of Appeal on Wednesday, said at times during her securities hearing she felt as though she was “in the twilight zone,” fighting against misleading and false testimony, missing documents and an unfair process.
“I believe the outcome would have been very different,” she said, contending she wasn’t permitted to present all her evidence. “The panel made their decision just on one side,” said Pastuch, who disputed even the $5.6-million figure.
But the lawyer representing the Saskatchewan Financial and Consumer Affairs Authority (FCAA) said the panel did everything possible to accommodate Pastuch — from allowing her to testify by phone and in writing to granting repeated adjournments until it had no choice but to bring the matter to an end.
“The patience of the hearing panel here was stretched beyond imagination,” Sonne Udemgba said. “At the end of the day, they wanted justice to be served.”
After a full day of arguments and with piles of documents before them, Justices Georgina Jackson, Peter Whitmore, and Jacelyn Ryan-Froslie reserved decision on what Jackson described as “complex issues.”
Pastuch, 52, and her companies — Teamworx Productions Ltd., Idendego Inc., Cryptguard Ltd., and two numbered entities — were the focus of a protracted securities hearing in 2012 and 2013. Investors who testified said they individually put between $10,000 and $1.2 million into the upstart technology businesses for creating anti-fraud and child protection software. According to the FCAA, those investments added up to $5.6 million between 2007 and 2009 when a cease trade order was issued. An investigator testified only $12,000 remained in the corporate accounts in the end.
In July 2014, the hearing panel found Pastuch and the companies she headed had breached the Securities Act by failing to comply with registration requirements, engaging in unfair practices ranging from “blatant misrepresentation to threats of dire consequences,” misleading and lying to investors, and hindering investigators by withholding information.
“This panel has never seen such blatant disregard for truth in dealing with people who were willing to hand over their significant savings,” read the panel’s decision, which Pastuch promptly appealed. The panel also ordered her to pay costs and penalties totalling $146,638, and compensation of up to $100,000 (the cap in place at the time) to each person or company suffering a loss. The orders were put on hold pending the outcome of the appeal.
Jackson methodically led Pastuch, arguing her case without a lawyer, through each of her points of appeal and asked if she had anything to add to her written arguments. “Oh yes, I do,” she often repeated.
Pastuch never attended the original securities hearing — only by telephone — but at times had Brian Pederson, her chief technology officer, represent her. He sat beside her at the appeal table, flipping through the stacks of binders and documents.
Pastuch told the court she’s had no option but to defend herself, as she is running out of money for lawyers through the lengthy legal battle. “I don’t have the money governments do,” she said.
Pastuch argued panel chair Gordon Hamilton ought to have removed himself from the process, that the hearing panel demonstrated a bias against her, that the FCAA lost or withheld documents critical to her defence and that untruthful witnesses added up to an unreliable decision.
“I just felt a mistrust in this situation. I felt there was hidden agendas,” said Pastuch, who added her actions and request for adjournments “was never to abuse the process. It was to get to the truth.”
She added that she had to fight so vehemently for disclosure of FCAA documents that “at times, I felt taken advantage of.”
But Udemgba refuted the allegations of bias, saying Pastuch was basing her arguments on “speculative facts,” that the panel acted impartially, the FCAA handed over all documents, and there was no procedural unfairness.
He said Pederson and Pastuch chose not to attend the hearing when the FCAA called the bulk of its witnesses. Pastuch told the appeal judges they never understood they couldn’t have those witnesses recalled for cross-examination, when Pederson came back to present the defence.
“I didn’t not want to participate,” Pastuch added.
She said the “heart” of her defence would have come from a chartered accountant had he been recalled to testify. He has since died. Pastuch said she had no financial training and was “being fed a script (for investors) and trusting it — from my lawyer, from my accountant.”
Udemgba said the accountant was but one FCAA witness of many, and it was the weight of all their evidence that led the panel to its findings.
“In the words of the panel, the evidence was unshakable,” he added.