Two days later, on November 24, 2004, Miller e-mailed
one of his clients, D.W., with what Miller referred to as a “tip”
about Masonite shares. The e-mail exchange was as follows:
Miller: Call me I have a tip[.]
DW: i’ll take your tip. you’ve steered me right in the past. Just let me know
what you are buying/selling/shorting so I can clear it hear [sic] first.
Miller: Stock trades on TSX at around $34 — cash takeover of $40[.] Timing
should be before xmas but you never know with lawyers[.] I’m long[.]
DW: what’s the name of the issuer?
Miller: Masonite — MHM[.]
 Miller admitted that the source of the e-mail information
was L.K. and, specifically, that knowledge of the timing of
the takeover came from L.K. Miller also admitted passing the
information on to Cheng — a subject that I will come to below.
 The critical issue as it relates to Miller is the proper
interpretation of s. 76(5)(e) of the Act. That subsection, which
was added to the Act in 1986, brings certain individuals into the
ambit of the section’s prohibition on insider trading and tipping.
The subsection reads:
76(5)(e) a person or company that learns of a material fact or material
change with respect to the issuer from any other person or company
described in this subsection, including a person or company described in this
clause, and knows or ought reasonably to have known that the other person
or company is a person or company in such a relationship.
 The Panel concluded that Miller ought to have known
that L.K. was in the type of special relationship that s. 76(5)(e)
contemplates. Miller submits that the Panel erred in so concluding. Indeed, Miller goes further and submits that the Panel
failed to make an express finding that L.K. was in that special
 As will be seen from the plain wording of s. 76(5)(e),
there are two routes that can be followed to arrive at the conclusion that a person is caught by the subsection. There is the subjective route, that is, where the person knows that s/he is receiving
material non-public information from a person who is in a special relationship; and there is the objective route, that is, where
the person reasonably ought to know that that is the case.
 In this case, of course, it is the objective route that is at
issue. In Miller’s submission, that objective route can only be
taken if the respondent can show that the individual in question
ought to have known:
( i) that the information originated from an inside source, pursuant to clauses
76(5)(a)-(d) ( i.e., the first person in the chain); and ( ii) something about the