IIROC reaches settlement with three former All Group reps

Prince Edward Island’s Superintendent of Securities issued an order on Tuesday giving the Investment Industry Regulatory Organization of Canada (IIROC) the authority to collect monetary sanctions from securities violators through the Supreme Court of P.E.I., along with enhanced evidence-gathering powers.

The self-regulatory organization (SRO) already has similar authority in Alberta and Quebec and is seeking the same power in other provinces in an effort to improve its collection rates for monetary sanctions against individuals.

Securities regulators are generally quite successful at collecting fines from firms that aim to stay in the industry. However, they have much less success with fines against individuals, who can just leave the business to avoid paying a hefty financial penalty.

For example, IIROC reports that it has collected less than 20% of the fines levied against individuals last year and says that approximately $30 million in fines against individuals remains unpaid since 2008.

IIROC received approval to file an enforcement decision with the court in P.E.I. last year. Now, the SRO will be able to pursue collections in court without seeking approval in each case.

In addition IIROC says that it will now also be able to “improve the co-operation of witnesses and evidence-gathering for its disciplinary hearings, which will enable IIROC to obtain the best evidence to prosecute wrongdoers” in P.E.I.

“We commend the provincial government and the P.E.I. Superintendent of Securities for demonstrating leadership by providing IIROC with important tools that strengthen our enforcement abilities and sending a strong deterrent message to potential wrongdoers,” says Andrew Kriegler, IIROC’s president and CEO. “Our collaboration means that IIROC can be a more effective public interest regulator that holds wrongdoers accountable when they harm investors.”

“P.E.I. is pleased to collaborate with IIROC to enhance investor protection to help to foster confidence in our capital markets and economy,” adds Steve Dowling, PEI’s Superintendent of Securities. “We will continue to work to ensure those operating in financial services meet the highest established standards.”

IIROC is calling on other provinces to follow suit, Kriegler says: “IIROC continues to encourage provincial and territorial governments across the country to make legislative changes that will strengthen our ability to protect investors — Canadian investors and our capital markets deserve nothing less.”

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