Tag archives: IIROC

IIROC’s 2018 Enforcement Report: Strengthening Enforcement Authority Across Canada

Overview

On May 16, 2019, the Investment Industry Regulatory Organization of Canada (IIROC) published its 2018 Enforcement Report (the Report).  The Report summarizes IIROC’s enforcement activities in 2018 and provides an update on the progress of IIROC’s enforcement priorities, chief among which has been the strengthening of IIROC’s legal authority and enforcement powers across Canada.

Enforcement Activities

IIROC conducted 127 investigations in 2018, 40% of which resulted in prosecutions.  The number of prosecutions increased from 44 in 2017, to 52 in 2018. Of those 52 prosecutions, 42 were against individuals and 10 were against firms.  Ontario had … Continue Reading

Harrington v IIROC: No Equitable Duty Owed by Public Sector Regulators to Disclose Information to Victims of Wrongdoing

On December 31, 2018, the Ontario Superior Court of Justice dismissed an application by Harrington Global Opportunities Fund (Harrington) for a Norwich order against the Investment Industry Regulatory Organization of Canada (IIROC). Harrington sought the order to compel IIROC to provide information that would identify parties which had allegedly been involved in manipulating the market price of shares of a reporting issuer, to permit it to determine the viability of a civil action against them.

Justice Perell’s decision highlights the fact that the issuance of a Norwich order is “a rarely exercised extraordinary discretion”.  “[T]he protection … Continue Reading

Nova Scotia Bill 67 – IIROC expands its enforcement authority

On October 12, 2018, Bill 67 was proclaimed into force in Nova Scotia. Bill 67 expands the enforcement powers of the Investment Industry Regulatory Organization of Canada (IIROC) in Nova Scotia in the interest of strengthening investor protection, with a focus on safeguarding the financial interests of seniors and vulnerable retail investors.

Bill 67 amends the Nova Scotia Securities Act to give IIROC broad investigatory and enforcement powers, including the ability to collect fines through the courts in Nova Scotia against wrongdoers found guilty of misconduct, the authority to collect and present evidence during investigations and at disciplinary … Continue Reading

IIROC Seeks Public Comment on Proposed New Disciplinary Options

On February 22, 2018, the Investment Industry Regulatory Organization of Canada (IIROC) announced that it was launching a public consultation on two new disciplinary approaches for dealing with minor violations of IIROC rules and the resolution of disciplinary cases.

IIROC’s Enforcement Department is specifically responsible for enforcing IIROC’s Dealer Member Rules relating to the sales, business and financial conduct of its Dealer Members and their registered employees, as well as the Universal Market Integrity Rules (UMIR) relating to the trading activity on all Canadian debt and equity marketplaces. Under the current regime, a respondent faced with … Continue Reading

Ontario provides protection to “whistleblowers” against reprisals

In December 2017, Ontario instituted a civil cause of action for employees who experience reprisals from their employers for providing information or assisting in certain other ways in regulatory or criminal investigations or proceedings involving contraventions of securities or commodity futures laws (whistleblowing).

The identical amendments to s. 121.5 of Ontario’s Securities Act and s. 54.1 of the Commodity Futures Act are wide in scope and protect “whistleblowers” as follows:

  • The new civil cause of action may entitle the employee to reinstatement or to payment of two times the amount of any remuneration they were denied as part
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Reasonable diligence and good faith, no excuse for CFOs under IIROC regulatory regime

In Sutton (Re), the Investment Industry Regulatory Organization of Canada’s (IIROC) found that individuals with regulatory functions in securities industry may not enjoy immunity for errors where they acted in good faith and with reasonable diligence.

Sutton was a specialist in the field of securities industry regulation. From March 2003 until July 2012, he acted as the CFO for First Leaside Securities Inc., which was a part of the First Leaside Group of Companies. As part of his role, Sutton was required to monitor First Leaside Securities Inc.’s policies and procedures to ensure that it complied with … Continue Reading

IIROC To Step Up Compliance Efforts in Response to Regulator Scrutiny

Last month, the Canadian Securities Administrators released its annual Oversight Review Report of the Investment Industry Regulatory Organization of Canada (IIROC), which evaluates the effectiveness of IIROC’s key processes and the organization’s compliance with its mandate during the period between April 2015 and July 2016.  IIROC oversees investment dealers (known as “Dealer Members”) and trading activities in Canada, and is subject to the oversight of the ten provincial security regulators that have recognized it as a self-regulating organization.

For the second year in a row, the CSA report criticized IIROC’s implementation of its business conduct compliance examination program, finding that … Continue Reading

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