Eugene Melnyk, owner of the Ottawa Senators and former chairman of pharmaceutical giant Biovail Corp., was banned for five years from senior roles at public companies by a panel of the Ontario Securities Commission.

He will also pay more than $500,000 towards the cost of a regulatory probe into his conduct.

The sanctions handed down Thursday were negotiated by Mr. Melnyk and staff of the OSC and jointly recommended to the panel.

After a formal reprimand by panel chair James Turrner, Mr. Melnyk spoke briefly.

“I’d like to thank the panel for their time and consideration,” Mr. Melnyk said, adding after the hearing adjourned that he was “looking forward to a nice weekend.”

His lawyer Ken Thomson said they had agreed not to discuss details of the case but are “delighted that this matter has finally come to an end after seven long years.”

Mr. Turner, the OSC panel chair, said the sanctions were within the parameters of those handed down in similar matters, and proportionate with other sanctions in the case.

Mr. Thomson said monetary penalties in addition to costs would not have been appropriate because there was no violation of the law.

Nonetheless, the regulator concluded that his actions were “contrary to the public interest.”

Mr. Thomson promptly appealed the OSC’s finding last year, arguing that the regulator had never before used its “public interest” mandate to demand sanctions in a case that did not involve “abuse” of capital markets.

As part of the sanctions negotiation, Mr. Melnyk agreed to drop his appeal if the panel approved the sanctions.

“That would bring finality to the process and of course staff supports that,” said Johanna Superina, speaking for OSC staff.

Mr. Melnyk will also be formally reprimanded by the OSC and will pay $565,000 towards the cost of the investigation.

Mr. Thomson said Mr. Melnyk was motivated to undertake the “hard bargaining” required to reach a joint sanction recommendation with OSC staff because the case has been hanging over his head for seven years.

Mr. Melnyk’s lawyer, Mr. Thomson, said monetary penalties in addition to costs would not have been appropriate because there was no violation of the law.

Last October, after a lengthy hearing in 2009, Canada’s largest capital markets regulator found that Mr. Melnyk didn’t violate any of the province’s securities laws in the way he handled an earnings warning at Biovail in 2003.

The sanctions will not prohibit Mr. Melnyk’s plans to be the majority shareholder in a new company called Trimel Biopharma, he said.

Mr. Melnyk was about 20 minutes late for the sanctions hearing in Toronto on Thursday because, his lawyer said, he was caught in the shutdown of U.S. airspace over New York to accommodate President Barack Obama’s visit to the site of the 2001 terrorist attacks.

The OSC had initially alleged Mr. Melnyk and other executives at Biovail misled investors by using a trucking accident that destroyed a shipment of drugs to cover up revenue shortfalls.

During the 2009 hearing, Mr. Melnyk testified that he did nothing wrong and was focused primarily on “big picture” issues with the company, not the finer details of quarterly financial reports.

Three other former Biovail executives settled the OSC’s claims against them before the case reached the hearing phase. They agreed to pay about $5-million in fines and a further $1.5-million in costs, and to face some restrictions on participation in market-related activities.

They also settled with the U.S. Securities and Exchange Commission.

Mr. Melnyk himself settled with the SEC this year, agreeing to pay a civil penalty of US$150,000 and to be barred from serving as an officer or director of a public company for five years.

He had earlier paid US$1-million to settle unrelated claims with the SEC that he had not properly disclosed ownership of more than 5% of Biovail’s shares.

Mr. Melnyk sold the bulk of his stake in Biovail last year.