The Canada Securities Regulatos, CSA, is the council which consists of the 10 provincial and three territorial securities regulators in Canada. The chief aims of the council is ensure the provision of protection to investors from unfair, improper or fraudulent practices, as well as the promotion of fair, efficient and transparent capital markets, through the development of harmonized securities regulation, policy and practice throughout their jurisdiction.
The CSA publicized its Annual Report the year 2015, a year in which the regulators feel that they have made impressive progress in their operation and fulfilling their mandate. The CSA, Louis Morriset, highlighted in the report that he is proud of the great strides in enforcement made by CSA members in 2015, while also pointing out that they “must continue to be diligent in improving the enforcement process and deterring misconduct. The current economic downturn and low interest rates are placing financial pressure on many Canadians, and there is a possibility of an increase in fraudulent activity and wrongdoing in the capital markets. Our members are well-equipped to respond, and I am confident that we will have even more success stories to share in 2016.”
Louis Morisset, who is also the President and CEO of the Autorité des Marchés Financiers, also commented that in 2015 the enforcement actions of all the CSA members “resulted in more than $138 million ordered in fines and administrative penalties, more than $111 million ordered in restitution, compensation and disgorgement and a total of ten years in jail sentences imposed on securities law offenders. To safeguard investors from illegal activity and to protect the integrity of Canada’s capital markets, the CSA constantly improves its enforcement processes with legal and technological innovations as well as with increased collaboration.”
This enforcement report in effect summarizes and presents in a unified manner the results of actions taken by CSA’s Members across Canada in order to deter and sanction financial wrongdoing.
A glance at the report’s contents reveals that 2015 has been a busy year for Canadian regulators since, during this period, they concluded 145 cases against 233 individuals and 117 companies, while they also imposed fines and administrative penalties of more than C$138 million. Moreover, they ordered the payment of over C$111 million in restitution, compensation and disgorgement.
It is also important to point out that in 2015, and as a result of the CSA members’ actions, courts in Ontario, Alberta, Québec, British Columbia and Manitoba ordered jail terms under the Securities Acts for 15 individuals, w ranging from 30 days to two years.
The most common category of law violations is reported to be Illegal Distributions, which accounted for 50% of all the concluded cases in 2015. This category of wrongdoing also accounts for 46% of the proceedings that have commenced in 2015.
The issuing of investor alerts intended to warn the public about individuals and companies that may be involved in harmful activity, be unregistered or suspected fraudsters is a core activity of CSA members and according to the report 84 such investor alerts were issued in 2015.