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Ontario securities agency targets crime

Wednesday 23 February 2011 - by Andrew Hickley


The new chairman of the Ontario Securities Commission has pledged to introduce a raft of measures to deter criminal activities and build investor confidence in the Canadian state's securities sector.

Howard Wetston announced on Wednesday that the CSA is considering regulatory proposals for the distribution of all securitised products in order to enhance transparency for the market and investors.

While praising recent anti-fraud and anti-misrepresentation additions to the Securities Act as "flexible tools" to aid the detection, disruption and prosecution of illegal distributions of securities, he vowed to go even further.

"While th[e] results are encouraging, we intend to bring more proceedings before the Ontario Court of Justice ─ especially those that involve repeat offenders," he told the Economic Club of Canada in Toronto.

"We aim to maximise the deterrent effect of court-imposed sanctions, including jail terms, where appropriate."


Wetston added that he has asked the regulator's enforcement branch to examine the possibility of a whistleblower programme, alongside a policy of immunity agreements, in order to catch offenders.

He said that settlement agreements and a clarification of the current "credit for cooperation" programme, where sentences can be lowered following collaboration with authorities, are also necessary to dissuade criminal behaviour in the securities markets.

"Our goal is to bring forward meaningful cases that have a strong deterrent impact in order to protect investors and the markets," he added.

Wetston also said the OSC is currently refining proposals to create a formal oversight regime for credit ratings organisations.

He ended the speech by reaffirming the OSC's support for the creation of a single national securities regulator for Canada, arguing that the model proposed by the Canadian Securities Transition Office takes into account the need to be "innovative, flexible, and reflective of local concerns and expertise".

"While the CSA has done a good job to harmonise and develop policies across Canada, the range of issues confronting regulators today suggests an accountability framework that can only be effectively accomplished by a Canadian Securities Commission."

The Canadian Supreme Court is due to hear from regulators and national officials between 13 and 14 April on plans to unify the securities system.

Some regulators have argued that the government has no constitutional right to change its unique structure, which sees securities governed by a total of 13 separate provincial and territorial regulators.



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