Header graphic for print
Canadian Securities Regulatory Monitor News and Insight

Tag Archives: enforcement

IIROC Proposes Two New Forms of Disciplinary Action Against Dealer Firms and Approved Individuals

Posted in Enforcement, IIROC, Industry News, Proposals

Recently, the Investment Industry Regulatory Organization of Canada (IIROC) proposed two new disciplinary programs (the Programs) that will be of interest to IIROC Dealer Members and Approved Persons:

  1. A “Minor Contravention Program” (MCP) that would impose fines on dealer firms ($5,000 per contravention) and their approved individuals ($2,500 per contravention) for minor offenses that might not have triggered any substantive legal action by IIROC Staff in the past.
  2. An Early Resolution Offer (ERO) process that would permit IIROC Staff to make formal offers of settlement earlier in the enforcement process, at
Continue Reading

CSA’s 2016 Enforcement Report: insights into securities regulatory activity

Posted in AMF, CSA, Enforcement, Litigation, OSC

The Canadian Securities Administrators (CSA) recently released its annual report on the enforcement activities of its members. The CSA is an umbrella group of Canada’s securities regulators.

Summary of 2016 Results[1]

Generally, enforcement and pre-enforcement activity, and monetary sanctions imposed by regulators decreased compared to 2015 but were higher than they were in 2014.

2016 2015 2014
Monetary Sanctions $62,148,866 $138,298,796 $58,239,156
Restitution, Compensation and Disgorgement $349,654,379 $111,651,429 $65,717,760
Commenced Cases (by notice of hearing, statement of allegations, or sworn Information) 56 108 105
Individual Respondents 72 165 189
Company Respondents 72 101 92
Most prevalent violations Illegal Distributions
Continue Reading

One Try Only: Insider Trading Appeal Reminder of Court’s Deference to Commission

Posted in Securities Litigation

The Divisional Court’s recent decision in Fiorillo,[1] upholding the findings of the Ontario Securities Commission (the “Commission”) that three traders violated the insider trading provisions of the Ontario Securities Act[2], sustained rulings by the Commission on important evidentiary and procedural issues,  and serves as a reminder that the Divisional Court generally defers to the Commission in securities enforcement cases.… Continue Reading

CSA Sets Out Priorities for 2016-2019

Posted in Advisors, Broker-Dealers, Compliance and Supervision, Continuous and Timely Disclosure, CSA, Enforcement, Exempt Market Dealers, Investment Funds, Mutual Funds, Registrants

The Canadian Securities Administrators (CSA) published on July 7, 2016 their priorities for the three-year period 2016 to 2019 under four categories: “Enhanced Investor Protection”, “Fair and Efficient Markets and Reduction of Risks to Market Integrity”, “Enhancement of Enforcement Effectiveness” and “Enhancement of Information Technology”.

The CSA states its strategic objectives without once mentioning the possible impact on it of the proposed national Cooperative Capital Markets Regulatory Authority (CCMRA) some of its members support. On July 22, it was announced that the CCMRA is expected to be operational in 2018.

Enhanced Investor Protection

The CSA proposes to … Continue Reading

CSA 2015 Enforcement Report Reveals Increased Regulatory Activity and Significantly Higher Monetary Sanctions

Posted in CSA, Enforcement, IIROC, MFDA, OSC

On February 23, 2016, the Canadian Securities Administrators (CSA) released its annual report on the enforcement activities of its members. Enforcement and pre-enforcement activity has increased significantly in 2015. Monetary sanctions imposed by regulators more than doubled year-over-year and regulators concluded 38% more cases in 2015 even as the number of new proceedings increased slightly.

The 2015 Results

Monetary sanctions doubled: The regulators collectively imposed the highest amount of monetary sanctions on market participants since 2009, the year their investigation into the crash of the asset-backed commercial paper market was settled. In 2015, regulators imposed $138.3 … Continue Reading

OSC again uses public interest power to impose penalty where insider trading law technically does not apply – Follow up

Posted in Enforcement, Industry News, OSC

Canadian Lawyer Magazine interviewed us last week on our recent post “OSC again uses public interest power to impose penalty where insider trading law technically does not apply”.

The Canadian Lawyer Magazine article is available online here: “OSC plays public interest card where insider trading didn’t apply”.… Continue Reading

OSC again uses public interest power to impose penalty where insider trading law technically does not apply

Posted in Enforcement, OSC

Yesterday, the OSC approved a settlement agreement between OSC Staff and Anand Hariharan in a case involving allegations of tipping, insider trading and conduct contrary to the public interest. Hariharan agreed to a reprimand and significant restrictions on trading for 10 years. The settlement also envisages a disgorgement of profits but, surprisingly, only a portion of them.

Hariharan learned from a friend that a subsidiary of Loral Space & Communications Inc. (“Loral”) was going to be acquired by another company (“MDA”). Hariharan’s friend was an MDA employee and the acquisition was a material fact to both Loral and to MDA. … Continue Reading

OSC Policing Non-Resident Trading and Advising Activities

Posted in Advisors, Autorités canadiennes en valeurs mobilières, Enforcement, Industry News, OSC, Registration

Recently, a foreign bank settled a threatened enforcement action with the Ontario Securities Commission (OSC) based on allegations that the bank’s Toronto foreign bank representative office (FBRO) had engaged in trading and advising activities on behalf of Ontario residents without being registered or being able to rely on an exemption.  The FBRO admitted that its conduct was contrary to Ontario securities laws as well as the public interest, and agreed to make a $500,000 settlement payment to the OSC.

The OSC became aware of irregularities following a 2011 Compliance Review (the results of which are summarized … Continue Reading

The Challenge With Determining When The Writing Is On The Wall: insider trading case considers materiality of confidentiality agreement and expired unsolicited offer

Posted in Enforcement

The British Columbia Securities Commission (BCSC) recently considered whether a consultant for a law firm had committed insider trading and breached the public interest when she traded a client’s shares with knowledge of undisclosed facts.

In Weiqing Jane Jin, 2014 BCSECCOM 194, there was no question that the consultant was in a special relationship with the issuer client and had traded while in possession of facts that had not been disclosed.  The materiality of these facts was contested.

Confidentiality Agreement Was Not a Material Fact

The BCSC determined that it was not a material fact that the client … Continue Reading

Canadian Public Company Disclosure Deficiency Rate Nearly Doubled in 2014

Posted in Continuous and Timely Disclosure, CSA, Enforcement, Industry News

The Canadian Securities Administrators (CSA) recently released CSA Staff Notice 51-341 setting out the results of their Continuous Disclosure Review Program for fiscal 2014.

The Program is used to evaluate compliance of reporting issuers (RIs) with continuous disclosure obligations and how regulators reacted in the year to deficiencies including referrals of RIs to enforcement, commencement of cease-trading proceedings, placing RIs on the default list, forcing refilings, and requiring changes in future RI filings.

The CSA conducted fewer reviews in fiscal 2014 (a 26% year-over-year decrease), but these reviews led to more serious consequences for issuers.

Almost … Continue Reading

June Citigroup Appeal Decision Reinforces OSC’s New “No Contest” Settlement Approach

Posted in Continuous and Timely Disclosure, Enforcement, OSC, SEC

Ever since raising the possibility of “no contest” settlements back in 2011, the Ontario Securities Commission (OSC) has had to contend with indications that such settlements were falling into disfavour with U.S. judges asked to approve them.

No-contest settlements became controversial in the U.S. because of a highly publicized ruling by Manhattan Federal District Court Judge Jed Rakoff who, in a landmark 2011 decision, refused to approve a no-contest settlement between the SEC and Citigroup. The Rakoff decision called into question the longstanding SEC practice of entering into cooperation settlements and generated much controversy among U.S. regulators … Continue Reading

Can the OSC’s Public Interest Power Be Used to Expand Insider Trading Liability?

Posted in Enforcement, OSC

In recent years, the Ontario Securities Commission (OSC) has been relying on its discretionary public interest power to make enforcement orders in circumstances where no actual breach of securities laws has been proven and no egregious violation of recognized conduct standards is necessarily involved. This trend is becoming evident in enforcement proceedings involving insider trading allegations. In this post, we discuss some recent OSC decisions (Donald[1], Moore[2] and Suman[3]).

The Shifting Scope of the Public Interest Power

The public interest power authorizes the OSC to make discretionary orders imposing a broad range … Continue Reading