This week the Ontario Securities Commission (OSC) announced an increase in enforcement activity by the regulator in 2015. In 2015 the OSC commenced proceedings in 31 cases (18 before the Tribunal and 13 before the courts), compared to 22 in 2014. The 13 proceedings before the courts include 10 prosecutions pursuant to the Securities Act and 3 prosecutions pursuant to the Criminal Code. Further, in 2015, eight individuals were sentenced in criminal or quasi-criminal matters including conditional and probationary sentences, as well as a three-month custodial sentence for breach of a Commission order.
The OSC has introduced new initiatives to assist with its role as regulator of the financial markets including no-contest settlements, and a mediation pilot program. These initiatives are aimed at encouraging self-reporting and early resolution of enforcement issues.
These resolution initiatives are in addition to the proposed whistleblower program the OSC hopes to roll out this year. The proposed whistleblower program, which has already gone through one round of public comment, would be the first of its kind to be used by securities regulators in Canada. The whistleblower program would provide a financial incentive of up to $5 million for "high quality, original information" that leads to an enforcement outcome with sanctions. The hope is that this program will assist the investigation and prosecution of complex securities law matters including insider trading and market manipulation which have been historically difficult to detect and effectively prosecute. It would also provide further incentives for self-reporting of misconduct.
In addition to these initiatives, the OSC has increased its investigatory role through the Joint Serious Offences Team (JSOT). JSOT is a partnership between the OSC and the RCMP Financial Crime program and the OPP's Anti-Rackets Branch designed to assist with the investigation financial crime. In 2015 JSOT executed 49 search warrants and laid charges against 20 accused. This partnership was further buttressed by the relocation of the RCMP financial crime unit to the OSC's Toronto office last year.
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