Ontario Securities Commission (OSC) has begun discussions with
legislators and law enforcement agencies in an effort to expand its
powers to include wiretapping rights with respect to parties under
As the country's largest and most influential securities
regulator, the OSC's policies and decisions impact
the majority of brokerages, mutual funds, and pension funds in the
country. In recent years the OSC has placed
emphasis on the need for more comprehensive anti-fraud and law
In a prepared speech to the Toronto Region Board of
Trade on March 27, 2014, the OSC's chair, Howard
Weston, commented that while the regulator "continues to take
an aggressive approach to insider illegal trading", he argued
the OSC is "missing a key tool that would assist in more
effectively enforcing prohibitions against insider
Mr. Weston commented that wiretapping powers would allow the OSC
to obtain direct evidence of the intention to engage in illegal
tipping and insider trading. He said the OSC is currently in
consultation with the Royal Canadian Mounted Police, the Ontario
Provincial Police, and Ontario's Attorney General regarding the
necessary legislative and procedural amendments to have these
offences included among those where wiretapping is permissible.
These new powers, however, would not be wielded directly by the
OSC's administration. Instead, they would be used by the
recently created Joint Serious Offences Team (JSOT). Formed
in May, 2013, the JSOT is comprised of OSC staff members, former
Crown prosecutors, and police officers. The specialized unit
is presently tasked with using search warrants and undercover
surveillance to investigate criminal activities in the securities
markets that could then proceed to court as criminal offences.
At its inception, the JSOT engaged 20 staff members, eight of
whom were given special constable status by the Ontario Provincial
Police. The JSOT unit operates within the OSC, but on a
different floor and uses a computer network cut off from the
regulator's main server to preserve proper chains of evidence
and the confidentiality of sources. It has also been tasked
to work closely with the OPP's Anti-Rackets Branch, the
RCMP's Financial Crime Program, and the Attorney General to
bring more criminal cases before the Ontario Provincial
Courts. The JSOT's mandate arises out of provisions in
both the Ontario Securities Act and the federal
To date, the JSOT's efforts have resulted in 20 search
warrants having been executed, with charges laid in seven
cases. The OSC maintains that the power to wiretap suspects
engaged in white collar crime will facilitate the prosecution of
criminal charges, given the need for proof that suspects engaged in
illicit trades based on information not available to the
public. The same argument is raised with respect to
combatting the crime of "tipping", as proof of
conversations between suspected parties – and the passing of
illegal tips – may lead to a greater success rate at
In other securities enforcement news, this past year
saw more jail time for those convicted under the
OSC's criminal investigations. The OSC's annual enforcement report, released
March 21, 2014, shows the regulator was successful in four separate
provincial court convictions in 2013, with sentences totalling 63
months of imprisonment. This rate is up from 2012 where the
OSC secured convictions against two defendants totalling 21 months
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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