Canadian securities regulators need to improve on investigation and prosecution of improper activities to better tackle economic crime, David Wilson, chairman of the Ontario Securities Commission, said on Wednesday.

Speaking at the 2009 McMaster University World Congress, Wilson said economic crimes are often not treated seriously enough.

“Economic crime has significant effects, damaging individuals, corporations and whole economies,” he said.

He noted that the issue of economic crime is becoming increasingly significant as the Canadian investor population grows, and as globalization has made it a cross-border phenomenon.

“We know that attracting more people to the capital markets is a good thing, but it also makes more of us more vulnerable to economic crime,” Wilson said, adding that virtually every Canadian adult is invested in the capital markets.

Wilson said that although there have been successful examples of enforcement in Canada, the regulators have room for improvement.

He calls for improvements in the co-operation and communications across Canadian jurisdictions and agencies as one way of improving regulatory enforcement.

He also suggests the use of investigative summons to compel evidence from witnesses to economic crime, which would be similar to the witness-compulsion powers of the U.S. grand jury system that has contributed to successful prosecutions in the U.S.

But enforcement is only part of the fight against economic crime, Wilson said. He emphasized the importance of preventative actions.

“Preventing economic crime is necessary to protect investors, and is essential to fostering fair and efficient capital markets,” he said.

Given the interconnectedness of capital markets, actions to prevent crime must include cooperation between regulators, self-regulatory bodies, and law enforcement agencies, both locally and internationally, Wilson said.

“It’s a global problem calling for a focused global solution.”

He added that Canada’s fragmented system of securities regulation lacks sufficient cooperation. He said the Ontario Securities Commission supports the report released by the Expert Panel on Securities Regulation this week, which calls for a national securities regulator.

“We need a common Canadian securities regulator,” Wilson said, adding that this move would “reduce the fragmentation of our own securities enforcement mosaic.”

Fostering confidence in capital markets is particularly important in the market environment of recent months, Wilson said.

“Many people appear to have had their confidence shaken in achieving an honest return on their investment,” he said. “Providing comfort to investors that they’re protected from being cheated, is a valuable contribution to the capital markets.”

IE