The Investment Industry Regulatory Organization of Canada (IIROC) released its annual enforcement report July 6, highlighting several significant cases that the self-regulatory organization says demonstrate its commitment to protecting investors by addressing wrongdoing in a fair, effective and timely manner.

In addition to the case summaries, the report examines the role of enforcement and discusses the new ways enforcement officials are working to address wrongdoing.

“Enforcement plays a key role in IIROC’s pursuit to protect investors and support healthy capital markets across Canada,” IIROC states in the report. “Enforcement works with IIROC’s other departments, including complaints and inquiries, the various compliance groups, trading review and analysis and registration, to ensure timely identification, investigation and prosecution of regulatory misconduct, as well as the detection and pre-emptive disruption of potential misconduct.”

The report also discusses IIROC’s recent adoption of a staff policy statement on early resolution offers intended to promote the timely resolution of cases and encourage firms to implement timely compensation and remedial measures. Those who choose the early resolution offer route reduce by 30 per cent, the sanctions IIROC would otherwise seek in a settlement agreement. The report also states that IIROC plans to integrate remote interviews and hearings into its investigation and proceedings, even after the pandemic is over and restrictions are eased.

Higher number of complaints

All told, IIROC received 1,396 complaints during the year, up from 1,283 complaints reported in its previous enforcement report. Complaints generally involved unsuitable investment recommendations, unauthorized and discretionary trading, misrepresentation and supervisory shortcomings. In total, the SRO imposed $1.2-million in fines against firms, down from nearly $6-million in sanctions imposed in the 2019-2020 year. Against individuals it levied $976,851 in penalties, down from almost $1.1-million in the previous year.

IIROC also publishes collection rates for penalties assessed: In the 2020-2021 year it collected 100 per cent of the penalties imposed against firms, but only 31 per cent of those sanctions it levied against individuals.