The Canadian Foundation for Advancement of Investor Rights (a.k.a. FAIR Canada) has seen its share of challenges in recent years — but Jean-Paul Bureaud says he’s ready to face those challenges head-on.
In August, Bureaud was appointed executive director of FAIR Canada, taking the reins from Ermanno Pascutto, who founded the investor advocacy group in 2008 and returned as interim executive director in March 2019.
Last October, FAIR Canada found itself in the unenviable position of having to return $2.4 million to the Jarislowsky Foundation, which had endowed FAIR Canada with $2 million in 2012. That donation was conditional on FAIR Canada raising $4 million in additional donations — a goal it was unable to achieve after years of trying.
The future seemed bleak. Although the Ontario Securities Commission (OSC) gave $2 million to FAIR Canada’s endowment fund, a release issued by FAIR Canada last October noted that “most regulatory or governmental organizations offered no support at all.”
Stephen Jarislowsky, who resigned from FAIR Canada’s board when the donation was returned, wrote a parting shot: “It is my view that the governments, regulators and the financial industry do not want FAIR Canada to fulfill its mission as a positive force to make the financial consumer better protected and informed.”
Bureaud isn’t fazed by FAIR Canada’s challenges and, after reaching out to friends and mentors, he feels even better about the opportunity. “They all, without fail, encouraged me to take the job,” he says. “They all thought that my background, my experience, my skills and my outlook would be a really good fit.”
Bureaud says he’s always had an interest in public policy. He graduated from the University of Alberta with a degree in political science and worked in government before going to Dalhousie University in 1992 to pursue a law degree.
As a lawyer with Borden Ladner Gervais LLP (BLG), Bureaud initially envisioned himself becoming a litigator but found that he was drawn to corporate securities law. However, his passion for public service took over before long. After a few years at BLG, Bureaud joined the OSC, where he worked for almost two decades in a variety of roles.
“I spent a few years in the enforcement branch [of the OSC],” Bureaud says. “I was actually one of the co-lead investigative counsels into Bre-X [Minerals Ltd.], which I think is still the largest gold-mining fraud case in Canadian history.”
Bureaud also worked in the OSC’s corporate finance branch when the Enron Corp. accounting scandal broke and when U.S. Congress passed the Sarbanes-Oxley Act — also known as the Public Company Accounting Reform and Investor Protection Act — which, he recalls, unleashed “very large” policy reform.
Bureaud went on to serve as director of the OSC’s office of domestic and international affairs before accepting a job at the World Bank as a financial sector expert, his most recent role before landing at FAIR Canada.
Bureaud believes his breadth of experience in the financial sector — particularly his experience at the OSC, which has an investor-protection mandate — will serve him well at FAIR Canada.
“I know how public policy is made here in Canada. I was often directly involved in making public policy proposals and rules,” Bureaud says. “I also know the majority of FAIR’s stakeholders, including the securities commissions and the senior leadership across the country.”
Bureaud is quick to enumerate FAIR Canada’s achievements on behalf of retail investors. He notes that FAIR Canada was involved in creating the Investor Protection Clinic — the first legal-aid clinic for investors in Canada — at York University’s Osgoode Hall Law School. There now are a handful of similar clinics across the country, he adds.
Bureaud also points to “groundbreaking research” FAIR Canada has commissioned on issues affecting senior investors and notes that the Canadian Securities Administrators (CSA) and the investment industry’s self-regulatory organizations (SROs) now are taking steps to protect elderly investors.
Bureaud adds that before FAIR Canada’s efforts, the OSC didn’t have an investor office or an investor advisory panel — and neither did any of the other securities commissions.
“That kind of legacy and that kind of track record is something I find very appealing,” Bureaud says of FAIR Canada’s accomplishments. “I’m really hoping I can build on that.”
Bureaud joins FAIR Canada at a time when several initiatives aimed at protecting investors are underway. The CSA announced in September that bans on mutual funds with deferred sales charges and trailer commissions paid to discount brokers will take effect in June 2022.
There’s also the work of the Ontario Capital Markets Modernization Taskforce, which recommended giving the Ombudsman for Banking Services and Investments (OBSI) binding authority to compel investment firms to compensate harmed clients.
FAIR Canada, Bureaud notes, has “long advocated for” giving OBSI binding authority, but adds that investors typically face a complicated process when they try to get compensation. First, they must file complaints with their firm. If those complaints aren’t resolved at the firm level, investors can seek relief through OBSI, but receiving compensation can be a lengthy ordeal — and firms often settle with clients for less than the amounts recommended by OBSI.
“If you’re a small investor here in Canada and you have lost a big part — if not all — of your small nest egg, the longer you have to wait to get any kind of compensation is a real problem,” Bureaud says. “It still takes quite a bit of time for these complaints to work their way through the system.”
Bureaud says he hopes initiatives such as Ontario’s effort to reduce the regulatory burden for the investment industry don’t overlook the burdens faced by investors. “In the complaint-handling scenario, there’s a lot of burden put on the investor to figure out how to navigate a confusing, complicated, lengthy process,” he says. “What can we do to reduce that burden and not put it all on the shoulders of a retail investor who lost a significant amount of money?”
While Bureaud won’t say where funding for FAIR Canada might come from, he says the organization is currently “in discussions” about funding and notes that FAIR Canada has received financial support from regulators and SROs in the past.
He adds that he has taken a “leap of faith” in joining FAIR Canada — and hopes that potential donors will take that same leap in deciding to the fund the organization.
“It’s still very important to have an independent national organization that can do its own research and tap into the experience of investors from across this country to help inform policy-making choices and improve the regulatory system in Canada for everyone, including the retail investors,” Bureaud says.
Correction notice: An earlier version of this story stated that FAIR Canada was responsible for the creation of the Osgoode Investor Protection Clinic. FAIR Canada assisted with the setup of the IPC, but does not play an ongoing role in the IPC.