In AMF v. Roy, the Autorité des marchés
financiers (the AMF) accused Mrs. Renée Roy (Roy) of
having traded in the securities of a reporting issuer while she was
in possession of privileged information. On July 2, 2014, the
Bureau de décision et de révision agreed with the AMF
and reserved its decision on the administrative penalty to be
imposed in the circumstances.
On March 27, 2015 the Bureau condemned Roy to a $60,000
administrative penalty. The Bureau also reviewed in detail the
criteria enabling the determination of the appropriate penalty in
the circumstances. The penalty claimed by the AMF was three times
the profits made by Roy, while the latter pleaded that the penalty
should be limited to the actual profits (i.e., $30,570).
Following a detailed study of the various decisions rendered by
the securities regulators of other Canadian provinces as well as
decisions by the Bureau itself, the Bureau reiterated the
objectives sought through the exercise of its jurisdiction over the
financial sector, namely the preservation of market integrity,
crackdown on insider trading and general dissuasion.
The Bureau underlined in particular that, in an effort to
preserve the public's confidence in the financial markets, when
faced with an offence of this nature, it is important for the
financial authorities to deal severely with offenders.
In that sense, the AMF recalled the numerous criteria developed
in case law which may be relevant1 to
the determination of the amount of the administrative penalty. The
AMF reviewed the following criteria for this file:
The seriousness of the breach – Insider
trading constitutes serious misconduct justifying "serious
Position of the offender within or
vis-à-vis the issuer (i.e.,) was the person an insider of
this reporting issuer or rather a "tippee"
Offender's past record and general
Intentionality of the actions taken –
Numerous hints can reveal the offender's intentions, including
the action of borrowing in order to invest further in the stock
while in possession of privileged information
The extent of offender's repentance
– In this file, the Bureau noted that during the hearing on
responsibility, Roy had mostly attempted to drag a red herring over
her tracks. While it was open to her to present a defence, this
position led the Bureau to conclude that Roy did not actually feel
any regret, despite the representations she made during the hearing
Profits made – Once again, the fact that
Roy borrowed in order to maximize her monetary profits, combined
with the spectacular returns one can expect from a transaction made
while in possession of privileged information, certainly had an
impact on the Bureau's determination of the sanction to be
Mitigating factors, including the following
examples, most of which may be applied to Roy:
collaboration with the AMF's investigation
general inexperience with financial markets
was not one of the reporting issuer's insiders
particular factual background
absence of risk of re-offending
Damages caused to the market's integrity
– Even in the absence of specific evidence as to the damage
suffered by specific investors, the Bureau stated that investors
had been generally swindled and suffered harm. In the end, the main
victim of insider trading is the public who loses trust in the
functioning and integrity of the financial markets.
Sanctions imposed in similar situations
– In its decision, the Bureau noted certain
precedents2 in which the penalty
imposed amounted to double the profits made.
Above all, orders rendered by the Bureau must serve to regulate
the financial markets with a mind to prevent offences and enforce
the law. Their purpose is not to punish. Nevertheless, in the eyes
of the Bureau, the need to deter players of the financial markets
from adopting a similar behaviour to Roy's justifies an
administrative penalty in the amount of $60,000, which represents
twice the profit made by Roy.
1. Autorité des marchés financiers
v. Demers, 2006 QCBDRVM 17.
2. Autorité des marchés financiers
v. Lefebvre, 2011 QCBDR 121; Autorité des
marchés financiers v. Claude Cajolet, 2010
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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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