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OSC announces results of 2013 enforcement efforts

TORONTO, March 21, 2014 /CNW/ - The Ontario Securities Commission (OSC) announced today the results of its enforcement efforts for the 2013 calendar year.  Today's announcement demonstrates the OSC's continued commitment to deliver strong and effective enforcement for Ontarians with more criminal charges, concluded proceedings and sanctions secured in 2013 than in the previous year.

In 2013, proceedings were concluded against a total of 170 individuals and companies, up from 100 individuals and companies in 2012. Of these respondents, 71 were concluded by way of contested hearings before the Commission (60 in 2012), 95 by way of settlement agreements (36 in 2012) and four by way of court proceedings under securities legislation.

"We have a responsibility to protect investors and our capital markets," said Howard Wetston, Q.C., Chair and CEO of the OSC. "That's why the OSC is dedicated to delivering a vigorous and active enforcement program, one that will help us achieve our goal of confidence and integrity in our markets."

The number of sanctions imposed by the OSC increased during the year and included 159 cease trade orders (80 in 2012), 67 director and officer bans, (49 in 2012), 118 exemption removals (72 in 2012) and 81 registration restrictions (58 in 2012). In addition, the OSC secured a total of 63 months in jail sentences against four defendants, up from a total of 21 months against two defendants in 2012.

New to the OSC's enforcement arsenal in 2013 is the Joint Serious Offenses Team (JSOT), an enforcement partnership between the OSC, the Ontario Provincial Police Anti Rackets Branch and the Royal Canadian Mounted Police Financial Crime program. JSOT investigates serious violations of the law using provisions of the Ontario Securities Act or the Criminal Code of Canada.

The team includes former police officers, former Crown attorneys and forensic accountants who work closely with police agencies and the Ministry of the Attorney General to bring more cases to the courts.

The OSC also continued to work closely with its international and domestic partners on various enforcement files to achieve its enforcement goals in 2013. Last year, the OSC received an increased number of requests for assistance - a total of 68, up from 59 in 2012.  Progress was also made in 2013 on a number of new policy initiatives intended to strengthen the OSC's enforcement presence and effectiveness. In June of last year, the OSC hosted a policy hearing (link to transcript) to consider proposed new enforcement tools, which were announced on March 11, 2014 in Staff Notice 15-702: Revised Credit for Cooperation Program.

2013 Enforcement Data:

Total Proceedings Commenced:

Category

Number of cases 2013*

Number of Cases 2012

Illegal Distributions

6

6

Misconduct by Registrants

2

2

Disclosure Violations

-

-

Insider Trading

2

2

Market Manipulation

1

-

Fraud

9

15

Miscellaneous

7

5

Total

27

30

 

Proceedings Commenced - Respondents:

Category

Individuals2013

Companies 2013

Individuals 2012

Companies 2012

Illegal Distributions

9

40

16

9

Misconduct by Registrants

3

3

4

4

Disclosure Violations

-

-

-

-

Insider Trading

2

-

12

1

Market Manipulation

1

-

-

-

Fraud

18

9

35

21

Miscellaneous

6

5

4

1

Total

39

57

71

36

* note:  includes 6 proceedings  commenced before the Courts, 4 pursuant to s. 122 and 2 pursuant to the Criminal Code.

Interim Orders: Interim orders protect investors by prohibiting or inhibiting potentially illegal activity while an investigation is underway.


Cases

2013

Individuals

2013

Companies

2013

Cases

2012

Individuals

2012

Companies

2012

Total

4

4

9

8

7

13

 

Concluded Proceedings: A proceeding is concluded when the Commission or the courts make a decision and any sanctions are ordered.

Category

Individuals

2013

Companies

2013

Individuals

2012

Companies

2012

Illegal Distribution

30

59

20

6

Misconduct by Registrants

3

5

8

7

Disclosure Violations

1

-

1

-

Insider Trading

2

-

2

-

Market Manipulation

1

-

-

-

Fraud

35

26

25

23

Miscellaneous

5

3

7

1

Total

77

93

63

37

 

How matters were concluded (by number of respondents):

Category

2013

2012

Hearing before the Tribunal

71

60

Settlement Agreement

95

36

Court Proceedings

4

4

Total

170

100

 

Protective Sanctions: The Commission can impose bans on future activity, such as trading in securities (cease trade orders), acting as a director or officer of a public company, and acting as or becoming a registrant. The Commission can also remove prospectus and registration exemptions available under the Act.

Category

2013

2012

Cease Trade Orders

159

80

Director and Officer Bans

67

49

Exemption Removals

118

72

Registration Restrictions

81

58

 

Monetary Sanctions: The Commission can impose monetary sanctions and bans on individuals and companies for violations of securities law or conduct that is contrary to the public interest. Adjudicative tribunals can also order a respondent to pay the costs of an investigation and/or hearing. The courts have the authority to impose fines, jail terms, and restitution.

Monetary sanctions include penalties, settlements and disgorgement. Disgorgement requires the respondent to pay the OSC the amount the respondent obtained as a result of the illegal activity.

OSC

Total Dollar Amount

2013

Total Dollar Amount

2012

Administrative Penalties/Settlements

$14,741,854

$13,648,572

Disgorgement

$40,242,705

$61,503,163

Costs

$3,176,936

$2,980,121

OSC Total

$58,161,495

$78,131,856




Courts



Restitution

$155,000

-

Court Total

$155,000

-

 

Cases ongoing before the courts, including criminal, as at December 31:

2013

2012

9

7

 

International Efforts:

Jurisdiction

Requests for assistance received by  the OSC 2013

Requests for assistance made by the OSC 2013

Assistance files open as at December 31, 2013

International

17

19

25

United States

37

20

47

Domestic

14

7

23

Total

68

46

95

Jurisdiction

Requests for assistance received by  the OSC 2012

Requests for assistance made by the OSC 2012

Assistance files open as at December 31, 2012

International

19

35

15

United States

30

14

25

Domestic

10

8

19

Total

59

57

59

SOURCE Ontario Securities Commission

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