CSA report does not disclose amount of fines collected

By Andrew Rickard | February 25 2016 01:46PM

The Canadian Securities Administrators (CSA) have released a report highlighting what the regulators did to deter and sanction financial wrongdoing during 2015. It remains unclear, however, how many fines the regulators have actually collected.

According to the CSA's eighth annual enforcement report, illegal distributions remain the most common category of wrongdoing prosecuted by Canadian securities regulators, representing 50% of concluded cases and 46% of the proceedings commenced, followed by fraud which accounted for 19% of concluded cases and 24% of the proceedings commenced.

Jail sentences

Overall, Canada's securities regulators concluded 145 cases against 233 individuals and 117 companies. As a result, 15 individuals received jail sentences of approximately 10 years, while 35 freeze orders issued against a total of 84 individuals and companies prevented the loss of more than $13.5 million in assets while CSA members completed investigations.

Difficult to collect

The CSA also notes that over the course of 2015 its members ordered $138 million in fines and administrative penalties, and also ordered more than $111 million in restitution, compensation and disgorgement. "While penalties, costs and other monetary sanctions / orders can be difficult to collect, every effort is made by regulators to do so, including using the services of collection agencies," reads the regulators' report.

So how many of the aforementioned penalties have been paid? The CSA’s enforcement report is silent on the matter. As we have reported previously, other regulatory organisations such as the Mutual Fund Dealers Association (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) have been largely unable to collect the fines they hand out. Is the same true for members of the CSA?

Unable to provide information

When The Insurance and Investment Journal contacted the CSA and asked them to disclose the amount of fines that had actually been collected, they said they were unable to provide this information.  “Unfortunately, I don't have these numbers,” replied Sylvain Théberge, director of media relations for the Autorité des marchés financiers.

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