Executive Summary: Key Legal and Evidentiary Issues

• Marc Evan Levy sought permission to appeal ASC decisions denying his disclosure application, declining to address constitutional issues, and refusing to adjourn proceedings or refer constitutional matters to the Court of King's Bench.

• The ASC alleged Levy and others engaged in conduct resulting in artificial pricing or false and misleading trading activity in shares of Softlab.

• Disclosure of investigative reports and unredacted investigator notes was refused by ASC staff on the basis of absolute privilege under section 44(2) of the Securities Act and irrelevance.

• A constitutional challenge to section 44(2) of the Securities Act under sections 7 and 11(d) of the Charter was filed without the mandatory 14-day notice required by the Administrative Procedures and Jurisdiction Act.

• Permission to appeal was required under Rule 14.5(1)(c) as the rulings were interlocutory decisions made during an ongoing hearing, and the Court found no rare or exceptional circumstances warranting intervention.

• The Court of Appeal denied permission to appeal and consequently declined to address the stay application.

The allegations against Marc Evan Levy and the ASC proceedings

On April 2, 2024, the Alberta Securities Commission issued a notice of hearing to Marc Evan Levy and several other individuals, alleging that they engaged in conduct resulting in, or contributing to, an artificial price, or causing a false and misleading appearance of trading activity, in the shares of a corporation known as Softlab. The ASC Hearing Panel directed on May 21, 2024, that all prehearing applications were to be heard no later than March 27, 2025. The hearing was subsequently adjourned to commence on February 2, 2026, and proceeded from February 2 to 12, 2026, with the presentation of the case by ASC staff. It was scheduled to resume on May 13, 2026, at which time Levy was expected to begin presenting his defence.

Levy's request for additional disclosure

On January 16, 2025, Levy requested that ASC staff disclose additional materials, including all complaints received in the matter, all memoranda, notes and reports made by staff, all investigative reports, and unredacted copies of investigator notes. On January 27, 2025, ASC staff advised that they had disclosed all relevant notes not subject to privilege and refused to provide the investigator's memoranda and report, citing absolute privilege under section 44(2) of the Securities Act. Staff also characterized the redacted portions as irrelevant and without evidentiary value. ASC staff offered to arrange a meeting with Levy to discuss his disclosure concerns, but he did not respond to this offer.

The last-minute motion and constitutional challenge

Nearly a year later, on January 28, 2026 — just days before the hearing — Levy submitted a notice of motion seeking an order for ASC staff to disclose all investigative reports and notes, a declaration that section 44 of the Securities Act is of no force and effect under section 52 of the Constitution Act, 1982 as it violates sections 7 and 11(d) of the Charter of Rights and Freedoms, a declaration that his Charter rights had been infringed, and costs. On January 30, 2026, Levy provided written notice of his intention to raise a constitutional question to the Attorney General of Canada and the Minister of Justice and Attorney General of Alberta. However, the Minister noted that the notice should have been provided a minimum of 14 days in advance of the hearing pursuant to section 12(1) of the Administrative Procedures and Jurisdiction Act.

The Panel's dismissal of Levy's application

On February 2, 2026, the Panel dismissed the disclosure application for several reasons. The application was filed on the eve of the hearing, ten months after the deadline for prehearing applications, without any prior notice at intervening hearing management sessions. The Panel noted that some of the relief sought — including a declaration under section 52 of the Constitution Act and costs — could not be granted by the ASC. The Panel further found, relying on Re Fauth and Kitmitto (Re), that the type of information regarding investigator notes and their assessment of the evidence was not relevant, and that ASC staff's determination of relevance was not unreasonable. The report provided to the executive director was afforded absolute privilege under section 44(2) of the Securities Act, and the Panel noted the materials might also be captured by litigation privilege or solicitor-client privilege. Finally, the constitutional challenge could not be considered because the required 14-day notice period had not yet expired.

The requirement for permission to appeal

Levy sought to appeal the Panel's decisions to the Court of Appeal of Alberta and argued that permission to appeal was not required. Justice Jo'Anne Strekaf disagreed. Under Rule 14.5(1)(c) of the Alberta Rules of Court, permission to appeal is required for any ruling during trial where the appeal is brought before the trial is concluded. The Court found that the Panel's denial of Levy's motion was addressed as a preliminary matter after the Panel convened the hearing, placing the rulings squarely within the scope of the rule. The preferred procedure for contesting interlocutory rulings of administrative bodies is to raise them as a ground of appeal in relation to the final decision.

The Court's assessment of whether permission should be granted

The Court emphasized that it will only review interlocutory decisions of administrative tribunals in rare and exceptional circumstances. Levy argued that special circumstances existed because the appeal would directly affect the level of procedural fairness afforded to him and that the Panel's decision constituted a manifest injustice. Levy also claimed that the decisions he sought to appeal were final orders that conclusively determine his substantive rights to seek constitutional relief and to obtain the requested disclosure. The Court found this assertion to be without merit, noting that Levy's grounds of appeal would not be extinguished if he were to appeal following the conclusion of the merits hearing and any sanction decision. The Panel's decisions did not constitute manifest injustice given that the application was filed a year after being advised that additional materials would not be disclosed, ten months after the prehearing deadline had expired, and less than a week before the hearing commenced. The Panel's determination that the requested materials were not relevant or were otherwise protected by privilege was based on the enabling statute, previous securities commission decisions, and a review of ASC staff's assessment of relevance, and could not be considered arbitrary.

Ruling and outcome

Regarding the constitutional challenge, the Court noted that neither Levy nor ASC staff had requested the Panel address the constitutionality of section 44(2) since the required notice period had lapsed, making it premature for the Court to consider. Ultimately, Justice Strekaf denied Marc Evan Levy's application for permission to appeal, finding no rare or exceptional circumstances that would justify appellate intervention in the interlocutory decisions of the ASC. As a result, it was not necessary to deal with the application for a stay. The Alberta Securities Commission was the successful party in this application; no monetary amount was ordered, granted, or awarded, as the matter concerned only the denial of permission to appeal interim procedural rulings.