Two Toronto police sergeants face disciplinary hearings after a watchdog agency found they illegally arrested two alternative media journalists during the 2010 G20 summit and that one officer hurled homophobic slurs.

The Office of the Independent Police Review Director report on the incident, obtained by CBC News, found that Sgt. Michael Ferry and Sgt. Douglas Rose had "no reasonable grounds" to arrest colleagues Ryan Mitchell and Lisa Walter.

However, a further allegation that one of the officers threatened to sexually assault one of the journalists with his baton had "insufficient evidence" to bear it out, the Office of the Independent Police Review Director found.

In the case of Mitchell, the review found that the officers used excessive force in his arrest. But it couldn't substantiate Mitchell's allegation that during his arrest, an officer said: "I'm going to love shoving this baton up your ass."

In the case of Walter, while the review said there was not enough evidence to substantiate that excessive force was used against her, it did conclude that Rose was involved in "discreditable conduct" for using "profane, abusive or insulting language."

Walter had alleged that Rose called her a 'f--king dyke" and a "douchebag." Walter also had alleged that after she was arrested, Rose said: "We were assuming you are a lady because of your credentials, but how do we know you are a woman? You look like a guy. I will start calling you Mr."

Mitchell and Walter were arrested on Sunday, June 27, 2010, after police ordered alternative press journalists to clear off Toronto's Bloor Street. It was midway through the G20 weekend, and a Toronto deputy police chief had just issued instructions to "take back the streets" following a Saturday that saw violent rampages, vandalism and a police cruiser set on fire.

Mitchell, who was arrested first, alleged that officers ran at him, wrestled him to the ground and twisted his right arm and back. He said one officer had his knee in his back while the other held him in a chokehold.

"He said he was going to love shoving this baton up my ass .... I heard him say it and I'm on the ground and I'm being choked and someone is saying this behind me," Mitchell told CBC News.

Ferry, however, told the watchdog agency's investigators that Mitchell was aggressive with police and was trying to rile up the crowd and accused Mitchell of saying "If we take Yorkville, it will be expensive."

Ferry said he decided to arrest Mitchell for breach of the peace but that Mitchell was "struggling quite violently" with police and tried to pull away when they attempted to handcuff him.

"I'm not resisting. You can see by my legs, I'm not thrashing about. I'm not fighting," Mitchell told CBC News while watching a video of the incident that was shot by a bystander across the street.

Rose, who was alleged to have made the comment about the baton, told investigators he could not recall making the remark.

Walter was arrested as she videotaped Mitchell's takedown.

One of the officers, identified in the review as Rose, is seen on the bystander's video, yelling at other officers to "Grab that woman, she's under arrest, she's causing a disturbance."

The video shows a number of officers taking her to the ground.

As someone across the street starts criticizing police, telling them to "be gentle," one officer turns around to him and says, "We'll get you next."

Ferry denied ever speaking to either Mitchell or Walter in a derogatory or abusive manner, according to the report.

The Office of the Independent Police Review Director is ordering disciplinary charges against the two sergeants. CBC News could not reach them for comment.

Misconduct charges are not criminal counts and are laid under Ontario's Police Services Act. If an officer is found guilty, it can result in punishment ranging from loss of a day's pay to dismissal from the force.

Toronto police Chief Bill Blair announced last week that all disciplinary proceedings arising from the G20 will be presided over by a retired judge and prosecuted by a former Crown attorney.