Latest enforcement report highlights actions taken in six provinces
Six provinces contributed to a significant increase in the enforcement powers of the Investment Industry Regulatory Organization of Canada (IIROC) in 2017.
In its newly-published Enforcement Report, IIROC says that progress has been made in the past year to bolster the regulator’s ability to protect the interest of Canadian investors.
“These legislative changes make a positive and crucial contribution to IIROC’s ability to protect Canadian investors,” says Elsa Renzella, IIROC’s Senior Vice-President, Registration and Enforcement.
“In jurisdictions where our authority is greater, we see an overall change in behaviour among sanctioned advisors taking their responsibilities more seriously,” she adds. “This sends an important message: our regulatory system has integrity and, although the vast majority of advisors are ethical and fair, IIROC will hold wrongdoers accountable.”
IIROC’s 2017 enforcement highlights
The report notes that suitability of investment products remained IIROC’s core focus, accounting for 45% of all prosecutions.
Seniors were involved in half of matters, represented 40% of all investigations and 30% of all prosecutions.
In 2017, IIROC:
- completed 127 investigations;
- successfully prosecuted 37 individuals and 7 firms;
- permanently suspended 1 firm and suspended 16 individuals;
- permanently barred 5 individuals from working at an IIROC-regulated firm in a registered capacity;
- imposed total sanctions of $3.4 million against individuals and $1 million against IIROC-regulated firms;
- Collected 16.2% of fines against individuals;
Legal powers obtained for IIROC enforcement since January 2017
- April 2018: British Columbia passed amendments to give IIROC the ability to collect disciplinary fines through the courts;
- March 2018: Manitoba introduced legislation to give IIROC the ability to collect disciplinary fines through the courts, protection from malicious lawsuits and the ability to launch appeals to the Manitoba Securities Commission;
- October 2017: Quebec’s Assemblée Nationale is reviewing legislation, which includes providing IIROC with protection from malicious lawsuits and with the authority to better collect evidence during investigations and present evidence in hearings. IIROC currently has the ability to collect fines through the courts in Quebec;
- June 2017: Alberta provided IIROC with protection against lawsuits for acting in good faith and with the authority to collect evidence during the investigations stage resulting in IIROC having a full enforcement toolkit in this province;
- May 2017: Ontario gave IIROC the ability to collect disciplinary fines directly through the courts; and
- January 2017: Prince Edward Island Office of the Superintendent of Securities gave IIROC the authority to directly register disciplinary decisions with the Supreme Court of PEI, as well as the authority to increase cooperation at the disciplinary hearing stage.
