The Ontario Securities Commission has collected less than half of the monetary penalties and costs it has levied in enforcement cases, and less than 1% of the penalties handed down in contested cases.
The OSC Wednesday published data on its collections performance, and pledged to publish this information on an ongoing basis in its annual reports.
The Ontario regulator reported that from 2005 (when it began exercising its authority to levy monetary sanctions) up to December 31, 2011, it has collected 48.3% of the monetary sanctions (including administrative penalties and disgorgement) and costs assessed through its enforcement activities. In total, almost $229 million in sanctions and costs have been levied, and $110.5 million of that has been collected.
The commission has a vastly different collection record in cases that involve settlements versus those that end in contested hearings. The vast majority of its successful collections, $109.8 million worth, came from settlements; representing 70.6% of the $155.5 million assessed in settlements. Whereas, just $690,000 came from cases involving contested hearings. This represents just 0.94% of the $73,357,460 assessed in contested hearings.
For the 2012 fiscal year to date (which ends March 31), the collections rate for settlements is 8.02%, or $904,187, of the $11,279,556 in total assessments, it reports. It has done much better than its historic average with collecting contested hearing penalties so far this year. Over the period, $16,542,435 has been assessed in contested hearings, and $565,000, or 3.42%, of that total has been collected so far.
“The recovery of monetary sanctions in many proceedings is limited because respondents may have no assets or limited assets, may no longer reside in Ontario, or cannot be found. Some respondents may have hidden assets in the names of others,” the commission notes.
Nevertheless, it adds that OSC staff are continuing to consider ways in which to improve its collections procedures. “Staff are examining the collections experience of other organizations in both the public and private sector to see what methods may be effective and could be used by the commission,” it says.
The commission has published a list of people and firms that are considered delinquent in paying monetary sanctions ordered against them by the commission. The list, which dates back to January 1, 2005, will be updated quarterly, it says. The OSC notes that most respondents are also subject to conduct prohibition orders, such as trading bans and bans on acting as a director or officer of a public company. The list does not include amounts owing in proceedings that are subject to ongoing litigation or outstanding appeals, or costs owing to the commission that were imposed by courts.