Canada: JSOT-Led Investigation Leads To Guilty Pleas And Sentences For Hospital Privacy Breach

In a matter that sees the intersection of securities regulation and the protection of personal information, the OSC last week announced that four individuals entered guilty pleas to charges laid following investigations led by its relatively recently-created Joint Serious Offences Team ("JSOT") The pleas reflect the successful conclusion of securities enforcement activities involving JSOT, an enforcement partnership between the OSC, the RCMP Financial Crime program and the Ontario Provincial Police Anti-Rackets Branch. The charges relate to three overlapping "referral arrangements" between employees of the Rouge Valley Health System and the Scarborough Hospital and between Registered Education Savings Plans ("RESP") salespersons. As a part of this scheme, former hospital employees misappropriated the names and other confidential information of new parents of children born in those medical facilities and sold that information to RESP salespersons to be used as potential sale leads.

Collaboration among Regulators and Law Enforcement

JSOT's chief objective is to assist the OSC in the protection of investors and the enhancement of confidence in Canadian capital markets, through effective enforcement activities and collaborative investigations of securities law wrongdoing. This matter's successful conclusion showcases regulatory and enforcement authorities cooperating effectively to investigate and prosecute violations of securities laws and related wrongdoing under the Criminal Code.

JSOT was established as a partnership in 2013. The concept of collaborative investigative units specializing in financial crimes is not new to the Canadian securities enforcement landscape. In 2003, the RCMP created its Integrated Market Enforcement Team (IMET), a partnership it leads with the Justice Department, provincial police forces, and provincial securities regulators, to deter capital markets-related crimes. However, IMET has been criticized as having disappointing enforcement results during its initial years, as noted by former Superintendent of Financial Institutions Nick Le Pan. Between 2003 and 2012, IMET had only charged 47 individuals, albeit with some recent modest increases to these figures, with seven charges charged laid in 2013 and 11 in 2014.

In an effort to bolster IMET's effectiveness in fighting white collar crime and improve collaboration between the OSC and RCMP, the Toronto division of IMET was relocated in March 2015 to the OSC's Toronto headquarters, as we have previously discussed on this blog. IMET's Montreal division is already housed in the same office as Quebec's securities regulator, and the RCMP is seeking to do the same with IMET divisions in Alberta and British Columbia.

Partnerships intended to coordinate investigations between the RCMP and OSC, such as the JSOT and IMET initiatives, can also help enforcement authorities navigate unique information-sharing issues and effectively provide regulatory bodies with access to investigatory tools that are not available in most regulatory investigations governed by provincial legislation. For example, the OSC cannot generally use evidence gathered under its statutory investigation powers as evidence in criminal trials, and must cease using any statutory investigatory tools available to it (such as compelled document requests and interviews) once it has "crossed the Rubicon" by deciding to pursue the matter in the quasi-criminal sphere. Similarly, securities regulators currently lack most police investigative powers, such as the ability to obtain search warrants and wiretaps. In some ways, the collaborative undertakings such as JSOT (and the closer integration of the IMET and provincial regulators) allow regulators and law enforcement to leverage their expertise in cooperation with one another, and to more effectively pursue white collar crime impacting the capital markets.

The Guilty Pleas

The OSC announced the names of the four individuals who pleaded guilty in relation to the hospital privacy breaches, and who faced a number of charges under the Criminal Code and as a result of breaches of the Securities Act. One of the schemes stemmed from Esther Cruz, a former registered nurse in the maternity department at the Rouge Valley Hospital System and the Scarborough Hospital. She was accused of accepting so-called "secret commissions" (effectively kickbacks) in exchange for providing one of the other accuseds, Nellie Acar, with confidential patient information contrary to s. 426(1)(a) of the Criminal Code. Acar was formerly a sales representative at Global RESP Corporation.

The two other individuals, Polina Edry and Subramanian Sulur, were registered dealers under the Securities Act who  admitted to using confidential patient information to target the new parents with RESP-related sales efforts. In court, Edry acknowledged that she had coordinated with Shaida Bandai, a former hospital clerk, to obtain the information. Both Edry and Sulur pleaded guilty to one count each of participating in an improper referral arrangement (contrary to NI 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and s. 122(1) of the Securities Act).

The Ontario Court of Justice gave Cruz and Acar each six month conditional sentences, with the first three months of their sentences to be served under house arrest. The court also gave both of them two years of probation with significant community service requirements. Sulur is scheduled to appear for sentencing on June 22, 2016, while Edry's appearance is scheduled for August 23.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions