The recently released 2010 Canadian Securities Administrators (CSA) Enforcement Report outlines how Canadian securities regulators, including the ASC, are working to detect and disrupt misconduct in Canada’s capital markets. Here are three reasons why you, as an investor, may be interested in this report:
1) More proceedings were concluded before provincial courts
Did you know that under securities legislation we can seek jail terms for breaches of securities laws in provincial court? In 2010, the number of cases CSA members took before the courts increased by 83 per cent. In these cases, the courts ordered jail terms for 15 individuals, ranging from approximately three months to three years. Where appropriate, we will take serious breaches of securities laws before the courts and seek the more severe sanctions that the public demands.
2) Investor education can help you avoid the most common type of securities offence
Did you know that illegal distributions are the most common securities offence? Sixty-six per cent of the total cases that CSA members detected, investigated and prosecuted in 2010 involved illegal distributions. An illegal distribution is a sale of securities to investors that does not comply with securities law registration, trading and disclosure requirements. These cases can involve Ponzi schemes, affinity fraud and boiler rooms operations and use both online and traditional methods to lure potential investors. While CSA members use new technologies to stop these schemes, we are also providing investors with updated tools and information so they educate themselves on how to identify and avoid these fraudulent investments.
3) Securities regulators are busy
CSA members concluded 174 enforcement cases in 2010 compared to 141 in 2009 and commenced 178 cases as compared to 124 in 2009. CSA members were also proactive in protecting investors and the capital markets by issuing 41 interim orders. These orders stop individuals and companies from trading while we investigate allegations of market misconduct. CSA members also kept an eye on what was occurring in other jurisdictions that might impact our investors and capital markets. In 2010, 74 orders were reciprocated and extended court and securities regulator sanctions from one jurisdiction to other jurisdictions.
The report also profiles some of the more interesting and noteworthy cases CSA members tackled in 2010. So check it out, and find out more about what we’re doing to protect you and your investments in Canada’s capital markets.
Once you’ve read the report, we’d love to know what you think. The following survey should take you approximately 2 minutes and will help us improve the 2011 report. Take the survey*.
*Please ignore the survey close date of April 8. It has been extended for the purposes of this blog.