Regulatory Issues

• Author: Jonathan Shime/Ian Smith/Grace Hession David
• Pages: 205-224

205

Regulatory

Issues

10

I. Reporting to a Regulatory Authority .......................... 206

A. The Law Society of Ontario ............................ 206

B. The Investment Industry Regulatory Organization

of Canada (IIROC) .................................. 207

C. The Real Estate Council of Ontario (RECO) .............. 207

II. Compelled Statements ..................................... 208

A. Introduction ........................................ 208

B. The Use to Be Made of an “Agreed Statement of Facts” ..... 210

C. Compelled Depositions and Quasi-Criminal Proceedings ... 210

D. Compelled Evidence and Derivative Use ................. 212

E. Compelled Evidence and the Penalty Phase .............. 213

F. Compelled Statements and Medical Regulatory

Proceedings ........................................ 214

G. Conclusion ......................................... 215

III. Can Regulatory Proceedings Result in True Penal Consequences? ... 215

A. Introduction ........................................ 215

B. Quantum of the Administrative Monetary Penalty ......... 217

C. Nature of the Statutory Jurisdiction ..................... 220

© [2021] Emond Montgomery Publications. All Rights Reserved.

206 Prosecuting and Defending Fraud Cases

I. Reporting to a Regulatory Authority

In cases where an accused is charged with fraud (or any other oence for that matter),

it may very well be that he or she must report the fact of the charges to a professional

regulator. It is not unusual for people charged with fraud to have to notify regulatory

oversight bodies of the criminal charges. If the accused fails to report the oence as

required, the accused could be subject to professional discipline, up to and including

revocation of his or her licence. Should that occur, counsel for the accused could also

end up subject to professional discipline on the basis that counsel failed to properly

advise his or her client of the regulatory requirement to report. Thus, it is imperative

for counsel to be aware of any obligation to report to a regulator and to ensure that the

accused is in compliance.

A. The Law Society of Ontario

A lawyer charged with fraud (or any other oence) in Ontario is mandated to report

the charge to the Law Society of Ontario. Specifically, section 2(1) of By-Law81 of the

Law Society of Ontario states:

2(1) Every licensee shall inform the Society in writing of,

(a) a charge that the licensee committed,

(i) an indictable oence under the Criminal Code (Canada),

(ii) an oence under the Controlled Drugs and Substances Act (Canada),

(iii) an oence under the Income Tax Act (Canada) or under an Act of the

legislature of a province or territory of Canada in respect of the income tax law of

the province or territory, where the charge alleges, explicitly or implicitly, dishon-

esty on the part of the licensee or relates in any way to the professional business

of the licensee,

(iv) an oence under an Act of the legislature of a province or territory of

Canada in respect of the securities law of the province or territory, where the

charge alleges, explicitly or implicitly, dishonesty on the part of the licensee or

relates in any way to the professional business of the licensee, or

(v) an oence under another Act of Parliament, or under another Act of the

legislature of a province or territory of Canada, where the charge alleges, ex-

plicitly or implicitly, dishonesty on the part of the licensee or relates in any way to

the professional business of the licensee; and

(b) the disposition of a charge mentioned in clause (a).

It should be noted that the term “indictable oence,” as set out in section 2(1)(a)

of the by-law, refers to “an oence for which an oender may be prosecuted only by

indictment” and “an oence for which an oender may be prosecuted by indictment

1 Law Society of Ontario, By-Law 8 (amendments current to 28 April 2016), online: <https://

lso.ca/about-lso/legislation-rules/by-laws>.

© [2021] Emond Montgomery Publications. All Rights Reserved.