Could Canada’s corporate criminals soon be facing the dreaded “perp walk”, being paraded in handcuffs after a high-profile arrest?

“That’s the objective,” said federal solicitor general Wayne Easter, as he helped launched the first two Integrated Market Enforcement Teams (IMETs) in Canada.

The two Greater Toronto Area IMETs are designed to respond swiftly to major capital markets fraud and market-related crimes. They were unveiled at a ceremony hosted by Market Regulation Services Inc. in Toronto today.

The teams are made up of Royal Canadian Mounted Police investigators, lawyers and other investigative experts working together to detect, investigate and deter serious capital markets fraud. They will be charged with going after market offenses such as illegal insider trading and the sort of corporate malfeasance that has come to light in both Canada and the U.S. in the past couple of years.

They will work closely with securities regulators, federal and provincial authorities, and police of local jurisdiction.

Today’s ceremony included speeches from top officials of the key players in the initiative, including Easter, Ontario minister of community safety and correctional services Monte Kwinter, Ontario Securities Commission’s executive director Charlie Macfarlane, and several representatives of the RCMP.

Peter German, RCMP director general of financial crime, said the team concept is not a new one; it is used for complex organized crime investigations, and in other areas, in which it has worked well. The advantage of these specialized teams will be to develop the market expertise that allows them to select appropriate cases for investigation and then to move them quickly to trial. In the past, these complex investigations have tended to drag on, and few cases have gone to trial. German said the teams will not be expected to take on every possible case, but to tackle the “cases that matter”. He cited Bre-X Minerals as an example of the sort of case that would probably come its way.

Macfarlane conceded that there hasn’t been enough criminal enforcement of market frauds in Canada. However, he indicated that there are a number of cases under investigation at the OSC right now relating to fraud and market manipulation, many of them involving illegal insider trading. Numerous cases also have been referred to the RCMP. However, he allowed that in the past there hasn’t been enough cooperation between the police and regulators, and that this new initiative should help improve that situation.

Once at trial, prosecutors have had a hard time winning these cases, and some say that a lack of judicial understanding is one reason for this. Macfarlane said that as more of these cases make it to court, the judiciary’s understanding should improve and that it should be easier to make these cases.

Easter added that one of the goals of the initiative is to build the expertise into the RCMP and to ensure that the penalties that are available are brought down on offenders.

An overriding goal of the initiative is to shore up investor confidence and assure both domestic and foreign investors that the markets are being closely policed and that Canada remains a good, safe place to invest. Easter called the IMET effort a good start, and suggested that further funding could be available in the future, if the teams work well.

German also noted that he hoped the new groups would also be a contact point for corporate whistleblowers, so that crimes can be uncovered and stopped before they get out of hand. They are also expected to be involved in corporate outreach.

Toronto will eventually have three IMETs operating. Others will open soon in Vancouver, Montreal and Calgary to cover Canada’s major financial centres. The goal is to have nine IMETs operating in Canada by April 1, 2006.

The IMETs help fulfill a commitment made in the 2003 federal budget to spend up to $120 million over the next five years to boost investor confidence in Canadian financial markets.