As we discussed in October 2011, the Ontario Securities Commission is currently considering a number of enforcement initiatives, including a "no-contest" settlement program. In response to public comments received, the OSC yesterday provided a clarification on the limited circumstances under which a such a settlement agreement would be considered.
Specifically, the OSC stated that no-contest settlements would not be available to those that had engaged in egregious, fraudulent or criminal conduct, or where the misconduct resulted in unaddressed investor harm. Further, in proposing a no-contest settlement, OSC would have to assess a number of factors in determining a respondent's eligibility, including the extent of the respondent's cooperation with staff's investigation, the degree and timeliness of self-reporting, the remedial steps taken by the respondent and whether disgorgement had occurred. Finally, the OSC is now proposing that no-contest settlement eligibility not be prohibited by the fact that a respondent may have previously been the subject of enforcement activity.
The OSC also released a research paper commissioned to consider recent U.S. developments on the topic and the implications for the OSC. The OSC will be providing submissions in support of the no-contest settlement initiative, as well as the other three enforcement initiatives proposed in 2011, at the roundtable scheduled for June 17.
For more information, see OSC Staff Notice 15-706.
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