Monetary penalties imposed by Canadian securities regulators surged to a total of $138 million in 2015 from less than $60 million in 2014, according to an enforcement report from the Canadian Securities Administrators (CSA) published on Tuesday.
Provincial and territorial regulators brought a total of 108 new enforcement actions in 2015, up slightly from 105 cases in 2014, the CSA report says.
However, the number of cases that the regulators concluded during the year jumped to 145 in 2015 from 105 in 2014.
In addition, the regulators collectively ordered more than $111 million in disgorgement and investor compensation, the CSA report says, which was almost double the $65 million ordered in 2014.
Almost 40% of the total compensation ordered in 2015 (just over $42 million) came in fraud cases, as did half the monetary fines and sanctions ($68.5 million). However, illegal distribution cases remain the biggest issue for regulators, accounting for about half of new cases and half of concluded cases.
Misconduct by registrants ranks well down the list of top offences, after illegal distributions, fraud, illegal insider trading, at just 6% of new cases. Industry misconduct also accounted for less than $2.5 million in monetary sanctions ordered during the year, although it did generate $18.9 million in compensation and disgorgement orders.
Approximately 10 years worth of jail time was handed down in cases regulators brought for securities law violations in 2015, involving 15 individuals, according to the CSA report. Regulators also issued 35 freeze orders issued against 84 individuals and companies during the year, which prevented the loss of more than $13.5 million in assets, the CSA report says.
The three key self-regulatory organizations — the Investment Industry Regulatory Organization of Canada (IIROC), the Mutual Fund Dealers Association of Canada (MFDA) and the Chambre de la sécurité financière (CSF) — concluded 139 enforcement cases in 2015, up from 112 cases in 2014, the CSA report adds.
In addition to the enforcement data, the CSA report also sets out some of the enforcement innovations that are being adopted in Canada, including the development of new surveillance capabilities in several jurisdictions, Alberta’s new policy of automatically reciprocating enforcement orders handed down in other jurisdictions, and the Ontario Securities Commission’s (OSC) plans for a new whistleblower policy that will pay rewards for tips that lead to significant sanctions.
“To safeguard investors from illegal activity and to protect the integrity of Canada’s capital markets, the CSA constantly improves its enforcement processes with legal and technological innovations as well as with increased collaboration,” says Louis Morisset, chairman of the CSA and president and CEO of the Autorité des marchés financiers (AMF).