CSA’s 2019 Enforcement Report reflects lower level of activity than 2018

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The Canadian Securities Administrators (CSA) recently released its annual report on the enforcement activities of its members. The CSA is the pan-Canadian organization for the country’s ten provincial and three territorial securities regulators. The 2019 report does not specifically comment on the decline in activity levels but does note that “the raw numbers do not capture the entire picture”.

Summary of 2019 Results[1]

 

2019

2018

Commenced Cases (by notice of hearing or statement of allegations, sworn information before the courts or, in Québec, served statement of offence)

38

63

Concluded Matters (final decision issued or settlement reached)

75

94

Fines, Administrative Penalties & Other (included penalties, disgorgement, voluntary payments)

$45.5 million

$77.5 million

Restitution, Compensation and Disgorgement Orders

$13.5 million

$109.6 million

Preventative Measures

 

 

Interim cease-trade orders

95

100

asset-freeze orders

84

89

Investor warnings and alerts

66

46

Market bans[2]

 

 

·         Individuals

65

63

·         Companies

33

18

Whistleblower program tips

291

156

 

Quasi- Criminal and Criminal Cases

In prosecutions under their respective securities acts, British Columbia, Alberta and Ontario collectively obtained custodial sentences in seven cases. Eight individual respondents received aggregate sentences of 10.8 years with individual sentences ranging from 90 days to 1.5 years.

CSA members, either independently or in collaboration with law enforcement agencies, also investigated breaches of the Criminal Code.

Seven cases were commenced with seven individuals being found guilty. Four individuals received aggregate sentences of 18 years and 11 months with jail terms ranging from eight months to nine years.

Collaborative Measures

The CSA has undertaken a number of collaborative activities, which reflects the provincial and national reach of securities and derivatives trading. Highlights of the CSA’s activities include the following:

  • CSA members referred 91 cases to each other and assisted in 63 cases
  • The CSA will launch the Market Analysis Platform, a data repository and analytics system that will help members identify and analyze market misconduct
  • The Enforcement Technology and Analytics working group assessed and acted upon current and emerging technology-enabled threats
  • The Investment Fraud Task Force (emerging issues) focused on, amongst other issues, misbehavior utilizing forex and crypto assets
  • CSA members explored new cooperation opportunities with federal agencies to strengthen detection, prosecution and deterrence of white-collar crime and securities laws violations.

 

[1] The numbers in this table and in this article have been taken from the CSA’s 2019 Enforcement Report, which can be found at http://www.csasanctions.ca/assets/pdf/CSA-Enforcement-Report-English.pdf and the CSA’s 2018 Enforcement report available at https://www.securities-administrators.ca/uploadedFiles/General/pdfs/CSA-Enforcement-Report_FINAL201819.pdf

[2] 58% of individuals and 73% of companies received permanent bans.

CSA Enforcement Report 2019 CSA

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