Enforcement activity by Canadian securities regulators ticked up last year, according to the 2017/18 Enforcement Report released Tuesday from the Canadian Securities Administrators (CSA).
The CSA’s fiscal year ends March 31.
Provincial and territorial securities regulators launched 66 enforcement proceedings against a total of 160 respondents in 2017, up from 56 cases involving 144 respondents in 2016.
Regulators also concluded a total of 111 cases, which in more of less unchanged from 2016 when 109 cases were concluded.
In total, the regulators handed down $69.4 million in fines and administrative penalties in 2017, up slightly from $62.2 million in 2016. Total disgorgement that dropped to $68.6 million last year from $349.7 million in 2016.
The drop off was largely due to regulators securing almost $300 million in restitution in 2016 stemming from four large no-contest settlements with the Ontario Securities Commission (OSC). The OSC’s no-contest settlements in 2017 only secured $37.3 million in restitution.
Market manipulation was the largest source of fines in 2017, accounting for almost $20-million worth, followed by illegal distributions at $13.7 million; no-contest settlements remained the biggest source of restitution.
During 2017, 17 offenders were sentenced to a total of 33 years in jail for various securities offences in quasi-criminal cases. Those jail terms ranged from 30 days to five years (less a day).
Eight offenders received 14 years of total jail time for Criminal Code offences. Sentences for these violations ranged from six months to almost four years.
In 2016, 23 years in total jail time was handed down against 15 offenders in quasi-criminal cases, and another 16 years were imposed in Criminal Code cases.
Other protective actions taken by the CSA in 2017 include 49 interim and asset-freeze orders, including $88 million frozen by regulators.
Additionally, the report shines a spotlight on recidivists, those who repeatedly violate the low. The rate of repeat from January 2017 to March 2018 was 4.5%.
“Of the nine individuals who were recidivists in 2017/18, eight were prosecuted in court and six were sentenced to prison terms,” the report states.
“To effectively detect and disrupt securities misconduct in an age of digital transformation, we have focused on embracing novel enforcement tools, implementing new technology and sharing learnings across the CSA and with regulatory peers and law enforcement partners,” says Louis Morisset, chairman of the CSA and president and CEO of the Autorité des marchés financiers, in a statement.
“This year’s CSA enforcement report clearly shows that by working together across provincial and international borders, CSA members are continually enhancing efforts, increasing efficiency and addressing securities violations,” he adds.