Key takeaways
- The Québec Financial Markets Administrative Tribunal (FMT) ruled that compelled testimony can be used in administrative proceedings to uphold public interest.
- The FMT confirmed its jurisdiction over regulatory offences under the Québec Securities Act, dismissing claims of exclusive jurisdiction by the Court of Québec.
- This decision highlights the distinct principles governing administrative proceedings, aimed at ensuring effective investigations by the Autorité des marchés financiers.
Can testimony that a respondent was compelled to give during an investigation be used against him in administrative proceedings? Is the Québec Financial Markets Administrative Tribunal (FMT) competent to administratively sanction a contravention characterized as an “offence” under the Québec Securities Act [1] (QSA)? And how far does the obligation to disclose evidence extend in an administrative proceeding? In its decision in Autorité des marchés financiers c. Forte [2], the FMT answered these three questions in dismissing all the preliminary applications brought by the respondent, Jonathan Forte.
Background
The Autorité des marchés financiers (AMF) filed an Originating Application against Mr. Forte, alleging that he had made securities distributions without a prospectus, acted as a dealer without being registered, and contravened a prior FMT decision rendered in the Laboratoire Blockchain inc. matter. The AMF seeks administrative penalties totalling $415,000, as well as prohibitions on trading in securities and on acting as a director or officer. In support of its allegations, the AMF disclosed 59 exhibits, some of which were redacted. The respondent brought three preliminary applications before the TMF in respect of the Originating Application.
The AMF’s use of testimony obtained under compulsion
The respondent sought a stay of proceedings, or alternatively the exclusion of the evidence, arguing that the AMF’s use of testimony he had been compelled to give during the investigation infringed his fundamental rights. He relied in particular on section 241 of the QSA [3], viewing it as a protection tantamount to an extension of the guarantees under the Canadian Charter of Rights and Freedoms. [4]
The FMT rejected this argument, noting that the use of investigative powers involving an obligation to testify under compulsion is permitted in an administrative context such as this one, aimed at protecting the public. It specified that:
“[…] the effectiveness of a regulatory regime presupposes not only the existence of numerous rules, but also the ability to inquire into compliance with them and to act on the basis of the information gathered.
In this perspective, the guarantees afforded by the charters and the requirements of procedural fairness are to be interpreted contextually and reconciled with the administrative nature of the regime and its objective of protecting the public. Absent this, information gathered under compulsion would lose a significant part of its usefulness, which would compromise the effectiveness of the regulatory regime and neutralize it.” [5]
As the respondent did not identify any specific right that was violated, nor demonstrate a serious breach of procedural fairness, the application for a stay of proceedings was dismissed.
The FMT’s jurisdiction over section 195(1) of the QSA
The respondent next argued that section 195(1) of the QSA, which characterizes as an “offence” the act of contravening a decision of the FMT, fell within the exclusive jurisdiction of the Court of Québec in penal matters.
The FMT dismissed this argument and affirmed its jurisdiction. It noted that section 93 of the Act respecting the regulation of the financial sector [6] confers on it exclusive jurisdiction over matters brought under the QSA, unless otherwise provided, and that the mere use of the term “offence” in section 195(1) of the QSA does not oust that jurisdiction. Relying on the Supreme Court of Canada’s decision in Poonian [7], it noted that the term can also refer to a contravention of a regulatory nature. Since the AMF is seeking an administrative penalty under section 273.1 of the QSA rather than a penal sanction, the FMT concluded that it has the jurisdiction necessary to sanction the alleged breach.
Disclosure of evidence and unredaction
Finally, the respondent sought Stinchcombe-type disclosure as well as the unredaction of the disclosed exhibits, invoking a high degree of procedural fairness. His application targeted, among other things, the investigation reports, the investigators’ notes and the transcripts of examinations.
The FMT reiterated that the standard set out in Stinchcombe [8], which is specific to criminal law, does not apply to an administrative proceeding, in keeping with the Supreme Court of Canada’s decision in May [9]. Procedural fairness instead requires that the respondent know the facts alleged against him and obtain the relevant documents on which they are based. However, the respondent did not precisely identify the documents sought, nor demonstrate their relevance to the allegations in the originating application. As a result, his request was viewed as a fishing expedition. As for the redactions, the AMF justified its reasons on the basis of privacy protection, the safety of individuals and the confidentiality of the investigation. In addition, the respondent failed to demonstrate how the redactions would prejudice the fairness of the proceeding.
Conclusion
This decision is a reminder that certain principles governing the conduct of an administrative proceeding are distinct from those of criminal law, for the benefit of the effectiveness of the investigations and enforcement measures carried out by the AMF.
[1] CQLR, c. V-1.1.
[2] 2026 QCTMF 48 (the Decision).
[3] Section 241 of the QSA provides as follows: “No person called upon to testify in the course of an investigation or being examined under oath may refuse to answer or to produce any document on the ground that he might thereby be incriminated or exposed to a penalty or civil proceedings, subject to the Canada Evidence Act (Revised Statutes of Canada, 1985, chapter C-5).”
[4] Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11.
[5] Decision, paras. 37-38, translation from the original French.
[6] RLRQ, c. E-6.1.
[7] Poonian v. British Columbia (Securities Commission), 2024 SCC 28.
[8] R. v. Stinchcombe, [1991] 3 S.C.R. 326.
[9] May v. Ferndale Institution, 2005 SCC 82.
