The Investment Industry Regulatory Organization of Canada ("IIROC") recently published its annual Enforcement Report for 2019 (the "Report"), highlighting its enforcement and discipline activities over the course of 2019. The Report summarises IIROC's enforcement process, activities, priorities, statistics and also provides illustrative case highlights.
Summary of IIROC Enforcement Related Activities
|
2019 |
2018 |
2017 |
|
|
Investigations completed |
104 |
127 |
128 |
|
Enforcement against individuals |
|||
|
Individuals prosecuted |
28 |
42 |
37 |
|
Individuals suspended |
14 |
21 |
16 |
|
Individuals permanently barred |
3 |
5 |
6 |
|
Sanctions imposed on individuals |
$1.9MM |
$3.2MM |
$3.4MM |
|
Sanctions collected from individuals |
29% |
28% |
16.2 |
|
Enforcement against firms |
|||
|
Firms prosecuted |
8 |
10 |
7 |
|
Firms whose registration was terminated |
1 |
2 |
1 |
|
Sanctions imposed on firms |
1.8MM |
$1MM |
$1MM |
|
Sanctions collected from firms |
97% |
100% |
91.2% |
Activities that Attracted Enforcement Action
IIROC continues to have a "core focus" on suitability issues which represented a third of all prosecutions, but is pursuing a variety of cases, including novel trading and gatekeeping cases.
Among the subject matters resulting in enforcement sanctions either by way of settlement or panel decisions were proceedings involving improper handling of:
- confidential client information;
- discretionary trading;
- trading in new issues;
- order entry e.g., "Spoofing";
- gatekeeping obligations of advisors;
- personal financial dealings and outside business activities;
- suitability with respect to investments for elderly or vulnerable investors; and
- duties related to senior officers and investment advisors.
Future Focus
IIROC's priorities include:
- Strengthening IIROC's legal authority throughout Canadian jurisdictions to collect fines;
- Strengthening IIROC's authority to collect and present evidence at enforcement proceedings;
- Statutory immunity for IIROC staff when acting in good faith performance of their regulatory functions in the public interest; and
- Developing alternative forms of disciplinary action that provide greater flexibility and result in a more responsive Enforcement Department. (See our previous article on the topic here)
Originally published 19 mai 2020
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