The Canadian Securities Administrators (CSA) recently published their 2016 Enforcement Report that compiles the measures taken across Canada to prevent and sanction misconduct in capital markets.
In 2016, CSA members (10 provincial and three territorial securities regulators) concluded 109 cases, compared to 145 in 2015. The CSA’s report underlines that the results can vary considerably from year to year, due to the fact that cases differ in their complexity and in the number of respondents and victims involved.
CSA members concluded matters involving 168 individuals and 94 companies, or 262 total respondents. In 2015, concluded matters involved 233 individuals and 117 companies for a total of 350 respondents. Matters were concluded against 149 respondents following contested hearings, 54 respondents by settlement agreements and 59 respondents by court decision, says the CSA report.
About $62.1 million was ordered in fines and administrative penalties. In addition to fines and administrative penalties, the regulators or courts will frequently order respondents to pay some or all of the costs of the proceedings. In 2016, CSA members assigned total costs of $2 million to respondents. This compares to $4.4 million in 2015.
CSA member’s efforts to prosecute serious cases in the courts resulted in several significant jail terms in 2016, says the report. These included a four-year sentence in the Wallace and Heward case in Ontario, a three-year sentence in the Morin case in Québec and a 27-month sentence in the Castano case in B.C. Overall, 23 years of jail time was handed down to offenders in 2016 with sentences ranging from 75 days to four years.
A number of proceedings began in 2016 and were still ongoing at year-end. So, decisions have yet to be rendered in these cases. The CSA report explains that one proceeding, targeting an illegal distribution scheme, for example, might involve a number of respondents, including several individuals and one or more companies.
In 2016, CSA members began 56 proceedings involving 72 individuals and 72 companies. This compares to 108 total proceedings commenced in 2015 that involved 165 individuals and 101 companies. In 2016, under the 45 interim orders and asset freeze orders issued, trading and other restrictions were placed on 120 individuals and 82 companies, says the CSA report. In 2015, that number was 52 interim orders and asset freeze orders, and trading restrictions were placed on 64 individuals and 58 companies.