From November 2006 through August 2007, Hypo Alpe-Adria-Bank (Liechtenstein) AG traded, through its accounts at eleven dealers located in British Columbia, a total volume of around 463 million shares, representing about CAD165mn in value.

Over 90% of this volume was in shares of issuers quoted on the US Over-the-Counter Bulletin Board or the Pink Sheets. Some of the trades were in securities of issuers that were the subject of unsolicited promotional emails, or "spam".

During their investigation of this trading, Commission staff were unable to identify the beneficial owners of the shares traded in the Hypo Bank accounts because the Liechtenstein bank cited secrecy laws in the jurisidction which prevented it from providing Commission staff investigators with that information.

In its decision, the Commission panel stated that: "What is relevant is that Commission staff has been unable to obtain the information required for their investigation on a timely basis…The passage of time is often significantly damaging to an investigation."

The panel referred to an earlier Commission decision holding that the banking secrecy laws of foreign jurisdictions cannot serve as a shield against the legitimate exercise by the Commission of its powers to enforce securities regulation in the province.

Noting that the Commission has the responsibility to protect investors and the integrity of the capital markets, the panel acknowledged that a permanent cease trade order would not help reveal the identities of the beneficial owners.

"However," the panel stated, "we are faced with suspicious trading activity, and Commission staff is unable to complete its investigation until it gets the information about the identities of the beneficial owners."

"We cannot ignore the potential risk to our markets in these circumstances. Although making the order permanent may have limited effect because, as Hypo argues, the wrongdoers (if there are any) may well have moved on, it will at least forestall the use of Hypo as a conduit for any further suspicious trading," the panel added.

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province.