If you’re looking for career advice, don’t ask Ermanno Pascutto. Despite recently completing the latest chapter of his legal career (he prefers the term “sabbatical” over “retirement”), he is reluctant to give advice.
“My career was really, more than anything, a confluence of change and unique circumstances as opposed to deliberate planning on my part. Looking back you wonder if you made the best career choices. So I hesitate to give advice to young lawyers.”
Instead, he’d like to refer everyone to the song “Everybody’s Free (to Wear Sunscreen)” by Baz Luhrmann, which, aptly, includes this line:
Don’t feel guilty if you don’t know what you want to do with your life. The most interesting people I know didn’t know at 22 what they wanted to do with their lives. Some of the most interesting 40-year-olds I know still don’t.
It’s fitting because there wasn’t a time in Ermanno’s career when he knew what his next step would be. Virtually every position on his extensive resume literally came out of the blue—he simply had the courage to accept each opportunity and run with it.
Starting on the right foot
Ermanno first considered becoming a lawyer when he was quite young. After immigrating to Canada from Italy, and watching his parents struggle to run a household on low wage jobs, the profession was appealing. He almost gave up the dream, however, when he realized how much schooling it would require.
“The cost of law school after completing my commerce and finance degree at the University of Toronto was too great,” he recalls. “But then, one day in second year, some of my friends decided to pick up applications at the law school and I joined them. I ended up applying to one school—U of T—and was accepted after second year, which made law more feasible.”
He articled at Osler in 1977 and was hired back as an associate, eventually practicing at the firm for about two years.
“It was such a fabulous time articling and practicing at Osler. The articling students were treated incredibly well—we were all taken to a dinner every month. Coming from my background, eating in upscale restaurants was a new experience.”
He remembers being impressed by the abilities and stamina of partners he worked with including his supervisor, Brian Levitt.
“One time, Brian asked me to work on a complex financing involving debt and preferred shares. I spent about two weeks preparing over 150 pages of documents. I dropped them on his desk at midnight, and came back at 8:30 the next morning. The documents were back on my desk marked up with detailed comments,” he says. “Brian spent several hours between midnight and 8 am going through 150 pages of documents, while working 18 hours a day on another deal.”
The first detour
He hadn’t been working at Osler very long when Purdy Crawford, a senior partner who was “regarded with great awe” but who Ermanno had barely met, walked into his office.
“The Toronto Stock Exchange was talking to the major law firms about a secondment arrangement similar to the OSC and Purdy thought I’d be a good candidate for nomination to represent Osler,” Ermanno recalls. “TSE VP Ed Waitzer ended up picking me and I became the first, and perhaps only, secondee at the TSE.”
Immediately after Ermanno started his 12-month secondment, a series of major hostile takeover bids through the facilities of the TSE began. It was 1981 and, to that point, similar transactions had never occurred through the TSE. The rules had been in place for several years but no knew how they worked.
“These transactions were incredibly intense and involved heated arguments. Decisions were appealed to the Ontario Securities Commission leading to public hearings held on the run,” Ermanno explains. “Three months into my secondment, the two VPs that I worked for abruptly left the TSE in a governance dispute with the CEO. I was the only person left at the TSE who had experience dealing with exchange takeovers. I was a second-year lawyer with three months of experience but, because there was no one else, I was put in charge of takeover bids and issuer bid and regulatory policy.”
Although he was in over his head, Ermanno excelled at his assigned role—so much so that, when his secondment was finished, instead of hiring a senior lawyer to run the TSE’s new Market Policy division (as Ermanno suggested), the TSE asked him to take it over.
“They handed me a chance to set up a new division where I would deal directly with the top securities lawyers and regulators in Canada. It was an incredible opportunity that third-year lawyers don’t often get.”
Ermanno accepted the opportunity, assuming he would take a year or two to set up the new division and eventually return to Osler (Purdy was willing to treat it as an extended secondment and kept in contact). But then the OSC came calling in the form of his former mentor at Osler.
Another fork in the road
Peter Dey, was the newly-appointed chair of the OSC—and he wanted Ermanno to come on board as his legal and policy advisor. Ermanno accepted the short-term contract, joining the commission as the right-hand man of the chairman. One year later, the commission offered Ermanno the position of executive director.
“They asked me to be head of staff for the entire securities commission,” he says. “I’d liken that to learning to swim by jumping into the deep end. I had only been called to the bar five years earlier. I had no experience in the operational areas of the OSC—corporate finance, capital markets, enforcement—and no management experience either. Suddenly, I was in charge of all these divisions with over 100 people reporting to me. It was quite a unique opportunity.”
Ermanno is the first to say that it wasn’t his qualifications that landed him a job he had not applied for. At the time, the OSC didn’t pay very well—so the experienced practitioners who were qualified didn’t want to take the significant pay cut. Those who were willing to take the pay didn’t have the confidence of the commission.
“It would be virtually impossible in this day and age for someone with five years of experience to be appointed head of staff of the OSC.”
The road to China
After five years, the OSC’s low pay rate started to take its toll, and Ermanno began brushing up his resume with the intention of returning to private practice. Before he could send it out, however, he was contacted by a head hunter in New York.
“Hong Kong’s financial markets had imploded during the crash of ’87. The government decided it needed a new securities commission and his firm was responsible for searching the globe for senior regulators from leading financial markets,” Ermanno says. “He asked if I would be interested in the job and initially I said no. But then he explained that they’d pay all expenses for me and my wife to fly business class to Hong Kong, stay for a week in a five star hotel and have the use of a car and driver. All I had to do was go to a few interviews. It was hard to refuse.”
Despite reservations about whether it would be possible to re-establish a career in Canada after being away for five more years, Ermanno ended up accepting the job. He moved to Hong Kong in May 1989, the same day the commission was legally established. When he arrived, Hong Kong and China’s financial markets and political systems were both in crisis. The events that led to the Tiananmen Square massacre in June were reaching a peak and the territory was under incredible stress. Britain was in the process of returning Hong Kong to China under the “one country, two systems. In the two months after Tiananmen several of my staff left Hong Kong”, Ermanno says.
“I was responsible for regulating listed companies and the stock exchange and I did not know any of the players and was lacking key staff,” he says. “The regulatory system and culture were different, the markets were in crisis, and I had to lead a complete overhaul of all aspects of the regulation of public companies in 2-3 years. So this was like learning to swim by jumping into the ocean in the middle of a typhoon.”
The beauty of Hong Kong
That said, Ermanno loved his time in Hong Kong and stayed there until 1999.
“Hong Kong was an extraordinary place to live and work. We lived on Lantau Island with neighbours who were from around the world,” he recalls.
“The senior management of the SFC were all from the top financial markets. We basically transformed all aspects of financial regulation of the securities market in the span of two to three years. Then we invented a framework to list Chinese state enterprises leading to some of the largest IPOs in history. It was a time of extraordinary change.”
Despite their love of Hong Kong, Ermanno and his wife eventually decided they would like to raise their daughters in Canada. So in 1994 he took a job with Goodman Phillips & Vineberg and, in 1997, Ermanno’s family moved back to Canada. While Ermanno stayed behind in Hong Kong, he made a point to fly to Canada and visit his family once a month. In 1999 he moved back to Canada permanently and started practising Hong Kong law as a senior advisor for Stikeman Elliot LLP in 2000, commuting to Hong Kong once a month, for a week to 10 days at a time.
“Commuting 13,000 km and 12 time zones a couple of times a month (with the occasional round-the-world trip to stop in Dubai) is not as glamorous as it may seem,” he says. “The arrangement was only feasible with the rise of the web. In 1998-1999 all aspects of securities regulation went online. I could access all the rules and the latest announcements online from Toronto, which wouldn’t have been possible a year or two earlier.”
A different world
In 2008 Ermanno’s career took yet another unexpected turn when he became the executive director of a not-for-profit organization called FAIR Canada (the Canadian Foundation for Advancement of Investor Rights). The opportunity first arose when he was the independent director of Market Regulation Services, which is now known as the Investment Industry Regulatory Organization of Canada (IIROC).
“We were at a board strategic planning meeting and the board was trying to decide on the best use of money collected from fines. I’d heard the complaint many times that regulators didn’t have consumer/investor input, so I suggested that they use some fine money to fund a consumer/investor organization to provide the input they were looking for,” he says.
To his surprise the board liked and the Chair conscripted Ermanno to develop the concept. He agreed to work on the project on a pro bono basis on the condition that he would not run the organization after it was created and financed. He spent two years bringing the idea to fruition and obtaining funding.
“Literally just as the cheques were being handed over to start it up, the new incoming chair of IIROC decided to withdraw funding unless I personally took charge,” Ermanno says. “So I changed my career yet again, stopped practising Hong Kong law and, with help from friends from his OSC and TSE days (including former OSC chairs Stanley Beck and Ed Waitzer), started a non-profit organization. Osler helped us obtain charitable status thanks to Purdy.”
And that’s what he did until a year ago, when—after three rounds of recruiting—he finally found someone to take his place. While he’s still on the board, he’s hoping that passing the torch will free up enough of his time to take the sabbatical he always dreamed of taking in his 40s.
“When I was young, I liked the idea of working until my 40s and then taking five to ten years of sabbatical with the idea of returning to work after that. I never had any plans to permanently retire,” he says. “I thought that it made sense to take time off when you’re young and better able to enjoy travel and adventure. So I’m hoping 60 is the new 40. My wife and I are spending some of the winter at our place in Costa Rica and travelling the world.”
“To celebrate turning 60, I had to choose between swimming with whale sharks in Belize and seeing Bruce Springsteen in Rome. I chose the scuba diving, but I’m still hoping to see Springsteen in Italy.”