Canada historically had a fairly-earned reputation for being a fraudster’s playground. This reputation resulted from, among other things, arguably inadequate and underutilised regulatory and criminal fraud enforcement regimes. Perceived shortcomings of the Integrated Market Enforcement Team of the Royal Canadian Mounted Police (RCMP), which charged only nine individuals between 2004 and 2008 despite a $30m annual budget, and at least the appearance of injustice resulting from investigation blunders in major securities fraud matters such as Sino-Forest and Bre-X, raised serious questions about the ultimate effectiveness of Canada’s fraud prevention and enforcement regime.

Recent developments in Canada’s compliance and regulatory regimes are changing the landscape. A ‘Cooperative Capital Markets Regulatory System’ initiative is seeking to coordinate and strengthen securities enforcement nationally, new provincial regulatory tools are emerging, including a proposed whistleblower programme and non-contest settlements being proposed by the lead securities regulatory, the Ontario Securities Commission (OSC), and cross-discipline teams specialising in fraud detection and prevention are being created to tackle the most sophisticated of financial crime. These measures suggest that prevention and enforcement efforts are stepping up in an effort to better to identify, interrupt and punish fraud taking place within Canada’s borders.

Apr-Jun 2016 Issue

Bennett Jones LLP