COURT OF APPEAL FOR BRITISH COLUMBIA
Lines v. British Columbia (Securities Commission),
2012 BCCA 316
Dockets: CA39838 and CA39841
IN THE MATTER OF THE SECURITIES ACT, R.S.B.C. 1996, C. 418
British Columbia Securities Commission and The Executive Director of the British Columbia Securities Commission
- and -
British Columbia Securities Commission and The Executive Director of the British Columbia Securities Commission
The Honourable Madam Justice Newbury
The Honourable Madam Justice Saunders
The Honourable Mr. Justice Frankel
On appeal from the British Columbia Securities Commission
(Reciprocal Order, Brian N. Lines and Scott Lines, April 2, 2012)
Counsel for the Appellant S. Lines:
Counsel for the Appellant B. Lines:
Counsel for the Respondent Executive Director
K. Mactaggart Wright
Place and Date of Hearing:
Vancouver, British Columbia
June 7, 2012
Place and Date of Judgment:
Vancouver, British Columbia
July 20, 2012
Written Reasons by:
The Honourable Madam Justice Newbury
Concurred in by:
The Honourable Madam Justice Saunders
The Honourable Mr. Justice Frankel
Reasons for Judgment of the Honourable Madam Justice Newbury:
 Scott and Brian Lines are brothers who are or were principals of a corporation called Lines Overseas Management Ltd. and/or other “LOM” affiliates. In late 2007, they became the subjects of a complaint filed by the United States Securities and Exchange Commission (“SEC”) for alleged infractions of U.S. securities laws. The complaint was settled when both brothers entered into settlement agreements, or “Consents”, with the SEC in September 2010. The terms of these agreements were then incorporated into “Final Judgments” filed by consent in the United States District Court of the Southern District of New York on October 14, 2010.
 The judgments permanently restrained the Lines from violating certain provisions of the Securities Act of 1933 and the Securities and Exchange Act of 1934; declared that the Lines and five “LOM” corporations were jointly and severally liable to disgorge $1,277,403, “representing profits gained as a result of the conduct alleged in the [SEC’s] Complaint”; and ordered them to pay specified civil penalties. Most importantly, the judgments incorporated undertakings given by the Lines in the settlement agreements not to trade in “penny stocks” (as defined by s. 3(a)(51) of the Securities and Exchange Act of 1934) quoted or displayed on the OTC Bulletin Board or the Pink Sheets, or a platform known as the ArcaEdge electronic limit order file. The prohibition would continue in force for a period of two years (in the case of Scott Lines) and three years (in the case of Brian Lines) from the filing of the orders.
 The settlement agreements and judgments stated explicitly that the Lines were not admitting or denying the SEC complaint. The judgments also confirmed that the trading prohibitions were not to be construed “to apply to trading of foreign securities on foreign exchanges.” At the same time, each of Scott and Brian Lines acknowledged in the agreements that they would not be permitted to “contest the factual allegations of the complaint” and that:
... the Court’s entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations. Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization. This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding. In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that he shall not be permitted to contest the factual allegations of the complaint in this action.
 This appeal involves one of the “collateral consequences” so described. On April 2, 2012, the British Columbia Securities Commission issued a so-called “Reciprocal Order” under ss. 161(1) and (6)(g) of the Securities Act, R.S.B.C. 1996, c. 418, prohibiting Brian Lines from trading any securities in British Columbia until October 14, 2013 and Scott Lines from trading until October 14, 2012. Both brothers appeal the order on various grounds, including that in the absence of evidence (or admissions) of wrongdoing, the Commission did not have an evidentiary basis to found an order substantially more onerous than the orders they “voluntarily” agreed to with the SEC.
 For the reasons that follow, I am of the view that the appeals must be allowed.
The Nature of the SEC Consent Orders
 We were told that it is common practice in the United States for the SEC to accept what is essentially a plea of nolo contendere ‒ a settlement of charges or complaints without an admission of wrongdoing ‒ from persons being investigated for securities infractions. This is not currently the practice in Canada, where the provinces’ securities commissions normally require that any person consenting to an order against him or her, admit to a contravention. B.C. Policy 15-601, for example, states at s. 4.2 that generally, the Executive Director expects a party settling an “enforcement matter” to “agree to a statement of facts, including an admission of wrongdoing.”
 The judgments consented to by Scott and Brian Lines were exceedingly discreet. They do not expressly state the nature of the SEC’s complaint(s) against the Lines, or the reason why “disgorgement” and civil penalties were agreed to, nor explain why the Lines were required to refrain from trading only in “penny stocks” for the stated periods. Mr. Crimmins, a Washington D.C. attorney who represented Scott Lines, deposes that the securities laws which the Lines were enjoined from violating dealt with “alleged negligent conduct” and did not involve “scienter” (i.e., intentional or reckless conduct). He describes the undertaking agreed to by his client as “quite narrow in its scope” and emphasizes that it does not extend to trading on exchanges such as the NYSE and NASDAQ. Mr. Crimmins continues:
Consent-degree settlements such as the Consent Judgement are common as U.S. regulatory settlements that are made without any adjudication or admission of liability. Indeed, the Consent Judgement here expressly states in its preamble that it is entered on consent “without admitting or denying the allegations” made. Such settlements are designed to economically put in place certain supplementary safeguards to assure future compliance without the burden, expense and uncertainty of litigation. The important point is that these consent decrees are not binding adjudications that bind the settling party in other pending or subsequent litigation not involving the SEC as a party. Confirming this important point, Paragraph 13 of the Consent Judgement expressly provides that a settling party is free to take “legal or factual positions in litigation or other legal proceedings in which the Commission is not a party” that directly contradict the SEC’s allegations in the case being settled. [Emphasis added.]
 Finally, he states that since SEC consent orders are not the result of an actual adjudication of the issues raised by the complaint, they are usually treated by U.S. courts as having no precedential force with respect to subsequent or parallel proceedings: see Kramas v. Securities Gas & Oil, Inc., 672 F. 2d 766 at 772 (9th Cir., 1982) and Lipsky v. Commonwealth United Corp., 551 F. 2d 887 at 893 (2d Cir., 1976).
The British Columbia Legislation
 Section 161 of the Securities Act of British Columbia contains the primary “enforcement” provisions in the Act. Section 161(1) provides that if after a hearing, the Commission or the Executive Director considers it to be in the public interest, either of them may make various orders, including orders prohibiting a person from trading, acting as a director or officer of an issuer, engaging in “investor relations activities”, or disseminating information to the public. Notably, s. 161(1)(b) permits the Commission or Executive Director to order that:
(i) all persons,
(ii) the person or persons named in the order, or
(iii) one or more classes of persons
cease trading in, or be prohibited from purchasing, any securities or exchange contracts, a specified security or exchange contract or a specified class of securities or class of exchange contracts ...
As is well known, the word “securities” is very broadly defined in s. 1 of the Act.
 Section 161(6) was originally enacted in 2006 and permitted the Commission or Executive Director to make orders based on findings of contravention made by a court or securities regulatory authority in another jurisdiction. In 2007, however, s. 161(6) was augmented so that it now reads as follows:
The commission or the executive director may, after providing an opportunity to be heard, make an order under subsection (1) in respect of a person if the person
(a) has been convicted in Canada or elsewhere of an offence
(i) arising from a transaction, business or course of conduct related to securities or exchange contracts, or
(ii) under the laws of the jurisdiction respecting trading in securities or exchange contracts,
(b) has been found by a court in Canada or elsewhere to have contravened the laws of the jurisdiction respecting trading in securities or exchange contracts,
(c) is subject to an order made by a securities regulatory authority, a self regulatory body or an exchange, in Canada or elsewhere, imposing sanctions, conditions, restrictions or requirements on the person, or
(d) has agreed with a securities regulatory authority, a self regulatory body or an exchange, in Canada or elsewhere, to be subject to sanctions, conditions, restrictions or requirements. [Emphasis added.]
 Although para. (c) might have been invoked by the Commission in the case at bar, it proceeded under para. (d), which is therefore the focus of this appeal. In general terms, the question is whether, as the Executive Director contends, a settlement agreement in which wrongdoing was not admitted can found a substantially more onerous order than that made by the regulatory authority in the foreign jurisdiction; or whether, as the Lines submit, s. 161(6)(d) contemplates “reciprocal” orders ‒ i.e., orders that mirror as closely as possible the undertakings given by persons who were the subject of complaints by foreign regulatory authorities. (In this context, of course, “foreign” includes any jurisdiction outside the province.)
 Section 161(6) does not use the term “reciprocal” or anything similar, nor does it restrict the nature of the order that may be made by the Commission or Executive Director under para. (d). However, in Re Waxman 2009 BCSECCOM 170, the Commission itself said this in connection with an order it had made under s. 161(6)(c):
Before section 161(6)(c) came into force, the Commission could, and did, make orders after a hearing under section 161(1), relying in part on the findings of another securities regulator, and on that regulator's having made orders. (See, for example, Seto 2006 BCSECCOM 569).
Section 161(6)(c) enables the Commission to make orders against a person under section 161(1) in the public interest without a hearing, based solely on another jurisdiction's orders, so long as the person is given the opportunity to be heard.
Section 161(6)(c) was enacted to address the limited effect of single-jurisdiction enforcement orders. A person whose misconduct leads to orders in one jurisdiction can do in another jurisdiction whatever activity was prohibited in the sanctioning jurisdiction. The effect is that investors and markets outside the sanctioning jurisdiction do not have the protection of the orders. Under section 161(6)(c) the Commission can protect British Columbia investors and markets by making orders for market misconduct that correspond to those made in another jurisdiction. There are similar provisions in the securities legislation of other Canadian jurisdictions.
Because the intent of section 161(6)(c) is to facilitate cross-border enforcement of orders, the Commission, in making orders under that section, relies solely on the fact that the other jurisdiction has made orders. It does not make any independent findings of fact or law, nor does it exercise any independent judgment as to the appropriateness of the orders made by the other jurisdiction. It reviews the orders made by the sanctioning jurisdiction and imposes corresponding orders.
This is consistent with the structure of securities regulation in Canada, under which securities regulators, exchanges, and self-regulatory organizations cooperate and rely on each other to regulate trading in securities in the public interest (see Pezim v British Columbia (Superintendent of Brokers)  2 SCR 557). Orders made under section 161(6)(c) ensure that investors and markets in British Columbia enjoy the preventative and protective effect of the orders made in the sanctioning jurisdiction. [At paras. 9-13; emphasis added.]
 In a more recent case, this court referred to ‘reciprocal enforcement’ in the present context. McLean v. British Columbia (Securities Commission) 2011 BCCA 455 (lve to app. granted  S.C.C.A. No. 9) concerned an order made under s. 161(6)(d) some two years after Ms. McLean had entered into a settlement agreement with the Ontario Securities Commission in which she consented to an order that she cease trading in any securities for a period of five years, subject to certain exceptions. In 2010, she received notice that the Executive Director under the British Columbia Securities Act was applying for an order against her under s.161(6)(d). She provided written submissions, but in May 2010 the Commission prohibited her from trading in securities and exchange contracts until September 8, 2013, subject to the same exceptions stated in the OSC’s order.
 Ms. McLean appealed on two grounds, one of which was that the Commission was required to give reasons for making its order and had not done so. The Court acceded to this argument, reasoning as follows:
The Commission’s authority to make an order requires that it “considers it to be in the public interest” to do so. Although the Commission’s order recites that the Commission considers it to be in the public interest to make the order, there is no explanation why this is so, but, in fairness to the Commission, the appellant did not assert in her submission that the public interest did not require the order and in the Ontario Agreement, she agreed to a form of order that included a recital stating that the order made against her was in the public interest.
The British Columbia order essentially replicates the substance of the Ontario order. Absent an explanation for the sanctions it imposes, there is a risk that the Commission merely reciprocally enforced the Ontario order, which would not be consistent with its mandate under s. 161 and which might amount to a fettering of discretion.
In the circumstances of this case, the complete absence of reasons makes appellate review of the public interest aspect of the decision and the sanctions imposed impossible. This Court cannot discern the “why” of the decision. I respect the right of the Commission to control its own procedure and would not impose on it the task of providing detailed reasons. [At paras. 28-30; emphasis added.]
In the result, the matter was remitted to the Commission to proceed in accordance with the Court’s reasons.
The Commission’s Order
 On June 29, 2011, the Executive Director notified each of Scott and Brian Lines that he intended to seek orders against them under ss. 161(1) and 161(6)(d) of the Securities Act. After briefly summarizing the terms of the judgments filed in the New York District Court, the Director stated in the notice that “Given the terms of the Final Judgment to which you consented”, he felt it appropriate for the Commission to prohibit the Lines from purchasing securities and exchange contracts – in Scott Lines’ case until October 14, 2012, and in Brian Lines’ case until October 14, 2013. The Director said he was relying on the settlement agreements, the judgments, the statutory provisions referred to therein, and on s. 161 of the Securities Act. The Lines were given until August 15, 2011 to respond in writing.
 Scott Lines responded through his counsel, Mr. Campbell, in a letter dated August 8, 2011 to the Commission. Mr. Campbell noted that Scott Lines is the president and founder of Lines Overseas Management Ltd. (“LOM”) and that Scott Lines, LOM and affiliates thereof participate in Canada in a “substantial number of private placements and secondary market transactions every year”. The letter acknowledged that in the past, LOM had participated in offerings and investments via “over the counter” markets in the U.S., but stated that the company had voluntarily discontinued such investments for business reasons around 2005.
 Mr. Campbell argued in his letter that:
.... section 161(6)(d) must be interpreted plainly. In particular, section 161(6)(d) must be read as permitting the Commission to impose only orders within the scope of the “agreement” being relied upon in the application before it. Orders exceeding the scope of the “agreement” being relied upon are not contemplated by section 161(6)(d).
He referred to Re Waxman, supra, and to an earlier decision of the Commission, Re Howling 2009 BCSECCOM 477. He suggested that to the extent the Commission might make an order that was not “entirely derivative” of the terms of Mr. Lines’ agreement with the SEC, his client would suffer a denial of his right to know the case against him, raising concerns about procedural fairness. He also submitted that such an order would be contrary to the public interest because:
In its request for an order pursuant to section 161(6)(d) that does not correspond to the “agreement” relied upon, Staff is seeking to simultaneously leverage Scott Lines’ agreement while selectively disregarding its most essential substance. Were the Commission to impose the order sought, it would therefore be signalling that a person [who] “agrees” with a securities regulatory authority will be exposing themselves to an uncertain range of discretionary sanctions in British Columbia. Such an outcome would sow uncertainty domestically and internationally, and would discourage constructive engagement with securities authorities amongst capital markets participants.
The letter ended with a request for the opportunity to make oral submissions to the panel.
 Brian Lines also responded to the Commission by letter dated August 9, 2011, through his counsel, Mr. Snarch. This letter made similar points to those raised by Mr. Campbell but also stated that Brian Lines is a resident of Bermuda who has no “residential or business connection” to British Columbia and had not held any position with LOM or any of its affiliates since 2005. Like Mr. Campbell, Mr. Snarch requested that his client be given an oral hearing.
 Counsel received no response to their submissions. Eventually they were informed by e-mail that the procedure specified by the Commission’s Hearing Policy 15-601 provides for written submissions rather than an oral hearing. Faced with considerable delay, counsel continued to request that the Commission “advance this matter to a resolution” in light of interim injunctions to which the Lines had apparently been made subject. Finally, Mr. Campbell sought an order of the Commission directing the TSX Venture Exchange to permit the “ordinary business activities” of Scott Lines and LOM to take place through TSXV facilities pending resolution of the outstanding application of the Director. The Commission scheduled this motion to be heard on April 11, 2012 and required all submissions to be filed by April 10.
 On April 2, however, the Commission issued its order under s. 161(6)(d). Headed “Reciprocal Order”, it recited the most important terms of the consent judgments and continued:
The Lines have a connection to British Columbia. In May 2004, the executive director issued a notice of hearing naming LOM (Holdings), LOM Securities (Bahamas), LOM Securities (Bermuda), LOM Securities (Cayman), Lines Overseas management, Brian Lines, Scott Lines, and others, and alleging that Lines Overseas Management traded shares of a British Columbia reporting issuer through accounts at investment dealers in British Columbia. Brian Lines and Scott Lines were directors of Lines Overseas Management and, respectively, its President and Managing Director. (In January 2005, the Commission dismissed the notice of hearing.)
We have given the Lines an opportunity to be heard. We have considered staff’s application, the Lines’ connection to our jurisdiction, the Lines’ submissions, and the seriousness of the SEC sanctions to which the Lines have consented.
Considering it to be in the public interest, we order:
Brian N. Lines
1. under section 161(6)(d) of the Act, that Brian N. Lines cease trading in, and is prohibited from purchasing, securities and exchange contracts until October 14, 2013; and
2. under section 161(6)(d) of the Act, that Scott Lines cease trading in, and is prohibited from purchasing, securities and exchange contracts until October 14, 2012. [Emphasis added.]
Presumably, the motion that had been scheduled to be heard on April 11 became academic.
 Brian and Scott Lines obtained leave to appeal to this court on May 17, 2012. In reasons indexed as 2012 BCCA 263, the justice in chambers also granted a stay of the Commission’s order pending disposition of the appeal.
 In this court, both Lines brothers submit that the Commission erred as follows:
... in concluding that the Commission had jurisdiction pursuant to s. 161(6)(d) of the Securities Act to make an order imposing sanctions, conditions, restrictions or requirements which differ from, and are substantially more onerous than, those voluntarily agreed to under the agreement relied upon by the Commission in circumstances where there were no admissions of liability or wrong-doing.
In the alternative, they contend that if the Commission had jurisdiction, it erred in concluding that the jurisdiction was properly exercised in the public interest. Brian Lines argued in particular that the Commission erred in:
(i) Making the Order either without considering or, alternatively, by fettering its discretion as to whether the “public interest” prerequisite to the Order, or any section 161(6)(d) order against the Appellant, had been met;
(ii) Alternatively, finding that the “public interest” prerequisite was met when there was no evidence capable of supporting such a conclusion; and/or
(iii) In the further alternative, breaching the Appellant’s right to be heard under section 161(6)(d) and the rules of procedural fairness by, inter alia, failing to provide the Appellant with adequate notice of the case against him and an opportunity to respond, and basing the Order on irrelevant and improper considerations and/or evidence which was not before the Commission.
 The first ground of appeal was framed as a jurisdictional one, and counsel contended that it involves a question of law determinable on a standard of correctness. This court, and the Supreme Court of Canada, have discussed the standard(s) of review applicable to decisions of the Commission on many occasions: see Pezim v. British Columbia (Superintendent of Brokers)  2 S.C.R. 557; Re Cartaway Corp. 2004 SCC 26; British Columbia (Securities Commission) v. Pacific international Securities Inc. 2002 BCCA 86. Since Dunsmuir v. New Brunswick 2008 SCC 9, the issue of standard of review has also been addressed in Dass v. Investment Dealers Association of Canada and Executive Director of the British Columbia Securities Commission 2008 BCCA 413 at paras. 16-35, and McLean, supra, at paras. 12-17.
 I do not intend to rehearse the analyses provided in these cases. It is sufficient in my view to note that Dunsmuir mandates a narrow view of “jurisdiction”. As Bastarache and LeBel JJ. stated for the Court at para. 59:
... “Jurisdiction” is intended in the narrow sense of whether or not the tribunal had the authority to make the inquiry. In other words, true jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter. The tribunal must interpret the grant of authority correctly or its action will be found to be ultra vires or to constitute a wrongful decline of jurisdiction. [Emphasis added.]
The Court went on to note that where jurisprudence has not already determined the appropriate degree of deference to be accorded a particular case, various contextual factors must be considered, including:
(1) the presence or absence of a privative clause; (2) the purpose of the tribunal as determined by interpretation of enabling legislation; (3) the nature of the question at issue, and; (4) the expertise of the tribunal ... [At para. 64.]
 In Pezim, the Court had provided a more expansive list of factors which led it to conclude that the appropriate standard of review of the Commission’s decision in that case was at the deferential end of the spectrum that was then central to the “pragmatic and functional approach”. As Mr. Justice K. Smith stated in Dass:
Briefly, [the Supreme Court of Canada in Pezim] observed that the following factors point to a deferential standard of review: the regulatory nature of the Act; the fact that the regulation of the securities industry in Canada is carried out through a number of governmental agencies, like the Commission, and by several self-regulatory agencies; the fact that the complex and highly specialized regulatory scheme for the securities industry requires specific knowledge and expertise; the Act gives the Commission a very broad mandate to protect the public interest; the provisions of the Act must not be read in isolation but in their factual and regulatory context, an exercise that requires expertise; several previous court decisions have been based on deference towards the decisions of securities commissions; and the fact that the Commission plays a role in policy development (at 589-596). Thus, the Court concluded, decisions falling squarely within the expertise of the Commission generally warrant judicial deference. [At para. 31 of Dass.]
 In my view, the question of whether the Commission had the authority to undertake an inquiry under s. 161(6) in this case is not in issue; nor is the issue one of “general law of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise.” (Dunsmuir, para. 60.) Rather, the first ground appears to me to engage the construction of s. 161 of the Act, and the Commission’s relationships with other regulatory authorities and self-regulatory bodies. Accordingly, I propose to approach this appeal on a standard of reasonableness. This standard was described thus in an oft-quoted passage from Dunsmuir:
Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. [At para. 47.]
 Counsel for the Lines submits that the Commission’s order was both incorrect and unreasonable. They emphasize first that the order restraining the Lines from trading in and purchasing securities and exchange contracts ‒ an extremely wide sweep ‒ is founded solely on the judgments and the “seriousness of the SEC sanctions” contained therein. As we have seen, the judgments purported to restrain the Lines from violating various provisions of the Securities Act of 1933 and the Securities and Exchange Act of 1934 ‒ in other words, it enjoined them from violating the law. The order also contemplated the disgorgement of $1,277,403 and the payment of civil penalties, but as also noted above, neither the consent agreement not the judgment reveals how or why this came to be payable. We know only that the sections under which the original complaints did not involve scienter. The restriction against trading in penny stocks in the informal over-the-counter markets in the U.S. left the Lines free to continue trading on the main American exchanges. Most importantly, the settlement agreements and judgments contained no finding or admission of wrongdoing on the Lines’ part: as stated in the preamble to the judgments, each of the Lines consented to the filing thereof “without admitting or denying the allegations of the Complaint (except as to jurisdiction)”. Nor did the previous complaint made in 2004 to the British Columbia Securities Commission about the Lines and LOM result in any adverse finding: as the Commission’s Reciprocal Order acknowledged, that complaint was dismissed.
 Counsel submit that s. 161(6)(d) must be construed purposively, in accordance with its object, which they say is the reciprocal enforcement of regulatory orders; and strictly, given the potential of the provision to undermine one’s rights of due process and procedural fairness. As has been seen, the Commission itself has acknowledged, in a slightly different context, that s. 161(6)(c) permits the Commission to ensure that “investors and markets in British Columbia enjoy the preventive and protective effect of the orders made in the sanctioning jurisdiction.” (Waxman, supra, at para. 13.) A similar purpose would appear to underlie s. 161(6)(d), although the reference to an agreement (as opposed to an order based on a determination on the merits) would presumably call for greater caution. As counsel for the Executive Director conceded, there could be many reasons why a person who has not engaged in wrongdoing might elect to enter into a settlement of kind agreed to by the Lines. It is possible, for example, that they did so simply to save themselves the expense of litigating with the SEC and, given that they no longer trade in the over-the-counter market, they were not affected financially by the ‘penny stock’ prohibition.
 Yet based solely on the settlement agreements and the judgments, the Commission determined that it was in the public interest to make a far broader order than the SEC had. (As the Commission acknowledged in its decision in Re Walker, 2012 BCSECCON 48, an order of the kind made here prohibits the Lines from buying or selling securities in British Columbia’s public markets, in its private placement markets, and in “any other market, or with any person, worldwide, if the trade originates or terminates in British Columbia.” (Para. 29.)) The Lines submit that in making its order, the Commission ignored the ‘reciprocal’ purpose of s. 161(6)(d) and engaged in ‘flawed’ legal logic. How, counsel ask, can it be necessary to prohibit the Lines from trading in all securities when there is no evidence or admission of wrongdoing either in this jurisdiction or the foreign jurisdiction? How can the Commission’s order be regarded as “reciprocal” when it goes so much farther than the agreements entered into with the SEC?
 The Director responded to these arguments by emphasizing the broad sweep of orders that may be made under s. 161(1) and suggested that in McLean, supra, this court had warned against the Commission’s fettering its discretion by “merely reciprocating” an original order. (See Infra, at para. 13, quoting para. 29 of McLean.) For this reason, the Executive Director submits, the reference to “reciprocal” orders should be eschewed in favour of the “plainer reference to s. 161(6) orders.” Finally, the Director argues in his factum that:
A person subject to an order in one place in respect of one kind of trading may subsequently engage in different securities-related activity in British Columbia. The Final Judgment [consented to by the Lines] therefore engaged the Commission’s clear authority to assess the public interest and to issue such orders that, in its expert judgment, the Commission deemed necessary. The Final Judgment itself contains extensive injunctive relief against future US securities law violations and imposes record production requirements to ensure compliance with these additional terms. These elements of the Final Judgment address the risk to the market from any trading by the Appellants that is not transparent to the regulator.
 With respect, I believe the Director may have misinterpreted this court’s comments in McLean. I read Mr. Justice Chiasson’s reasons as a warning that contrary to its suggestion in Re Waxman, the Commission must make its own determination of the public interest under s. 161, rather than make an order automatically, based on the order of the foreign jurisdiction.
 As for the Director’s final submission quoted above, it is of course true that a person who contravenes securities laws in one jurisdiction might do so in another. But the Director’s argument ignores the fact that in this case, there was no determination by any court or regulatory authority that the Lines had in fact broken any such laws. Nor did the Lines admit to doing so. Essentially, then, the Commission made the leap in logic from the fact that the Lines had consented to certain sanctions without admitting wrongdoing, to the conclusion that the public interest required that they be prohibited from trading in all securities in British Columbia. Bearing in mind that the standard of reasonableness is concerned with “the existence of justification, transparency and intelligibility within the decision making process (Dunsmuir, para. 47), I am constrained to the conclusion that the Commission’s order was unreasonable. Essentially, it imposes a severe sanction on each of the Lines for entering into a settlement agreement in which no wrongdoing was admitted. The evidence relied on did not, and could not, justify the more onerous order. The implications of such a “magnifying” effect are considerable given the frequency of nolo contendere orders in the United States and the likely introduction of such orders in Canada.
 I do not say that the Commission may never impose a sanction under s. 161(6)(d) that is materially more onerous than the terms of the agreement on which it is based: that question is for another day. It seems to me, however, that justice as well as transparency and intelligibility require that the Commission have evidence or an admission of a defendant’s wrongdoing ‒ and of course that the defendant be in a position to challenge such evidence at a hearing ‒ before such an order could reasonably be made under s. 161(6)(d).
 Being of the view that the Commission’s decision was unreasonable, I need not deal with the other more specific grounds of appeal asserted by counsel for the Lines. Nothing in these reasons should be taken as suggesting that the Commission may not invoke s. 161(6)(d) to make an order against the Lines prohibiting them from trades in “penny stocks” on over-the-counter markets that fall within the Commission’s jurisdiction, provided the Commission finds it is in the public interest to do so.
 Although the Lines both sought special costs in the event of their success in the appeal, I do not agree that the Commission’s conduct in this case was “worthy of rebuke”. I would allow the appeals with costs on the usual scale.
“The Honourable Madam Justice Newbury”
“The Honourable Madam Justice Saunders”
“The Honourable Mr. Justice Frankel”