CSA's 2016 Enforcement Report: Insights Into Securities Regulatory Activity

Author:Canadian Securities Regulation Monitor, Shane C. D'Souza, Rene R. Sorell and Cristian O. Blidariu
Profession:McCarthy Tétrault LLP

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 Results1

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 Fraud Illegal Distributions Fraud Illegal Distributions Fraud Concluded Cases (by final decision or a settlement) 109 145 105 Individual Respondents 168 253 149 Company Respondents 94 117 106 Most prevalent violations Illegal Distributions Fraud Illegal Distributions Fraud Illegal Distributions Fraud Preventative Measures (Asset Freeze Orders) 45 52 35 Reciprocal Orders 63 96 58 Increase in cases concluded by SROs

Despite the decrease is cases concluded by CSA members, the three key self-regulatory organizations (Investment Industry Regulatory Organization of Canada, the Chambre de la sécurité financière and the Mutual Fund Dealers Association of Canada) concluded more cases in 2016 than in previous years (2016: 159; 2015: 139; 2014: 112).

Collaborative measures

The CSA report highlighted measures that had been implemented in the last year to increase collaboration between its members and boost their inter-jurisdictional reach, including:

CSA members were making increased efforts to collaborate closely with Canadian law enforcement agencies. The Alberta Securities Commission (ASC) and RCMP announced a Joint Serious offences Team, following similar initiatives in Ontario and Quebec. Amendments to the securities legislation in Quebec, Nova Scotia and New Brunswick now provide for automatic effect in those provinces of new orders and settlement agreements made by other CSA members. In 2015, Alberta made...

To continue reading