Securities regulators concluded 75 enforcement matters in the past year, leading to almost $60 million in sanctions, according to the Canadian Securities Administrators’ (CSA) latest enforcement report.
The report, which details enforcement efforts for the fiscal year ended March 31, 2020, stated that securities scofflaws were ordered to pay $45.6 million in fines and administrative penalties, and $13.8 million in restitution, compensation and disgorgement.
Those totals were down significantly from the previous year, when regulators issued $77.5 million in fines and administrative penalties, and ordered $109.9 million in restitution and disgorgement.
The number of enforcement cases concluded was down from 94 the previous year, and the total of new proceedings declined to 38 from 63.
One of the highlights of the year was the cross-collaboration between CSA members. There was a total of 91 enforcement referrals between CSA members, and 63 instances of CSA members assisting one another in enforcement cases, both up from the previous year.
“As you can imagine, we often see misconduct in one province that has an effect on investors who are market participants in other provinces,” Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers, said in an interview. “We need to work together — and we do it well.”
The number of bans also increased: 65 individuals and 33 companies were banned from participating in capital markets last year, compared to 63 individuals and 18 companies in 2018-19.
Of the market bans issued last year, more than half of the individual bans and almost three-quarters of the company bans were permanent.
Regulators also issued more investor alerts: 66 last year, compared to 46 the previous year.
Quasi-criminal cases in British Columbia, Ontario and Quebec led to eight individuals being sentenced to a total of 10.8 years in jail, with sentences ranging from 90 days to 1.5 years, the CSA reported.
There were seven criminal cases commenced, seven criminal convictions and four individuals sentenced to a total of 18 years and 11 months in jail. Sentences ranged from eight months to nine years.
The CSA also said its Market Analysis Platform (MAP) — a long-awaited tool aimed at helping securities regulators monitor market misconduct — is nearing completion.
MAP, which will replace the CSA’s existing system for investigating market misconduct, is described by the CSA as a “data repository and analytics system” designed to offer enhanced insight into market manipulation and insider trading cases.
“It’s a platform that will improve our ability to analyze misconduct,” Morisset said, adding that the CSA is currently in the “final stages of testing” MAP. The new platform is expected to be available to CSA members by the end of the current fiscal year, which ends March 31, 2021.