Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Securities newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (June 22, 2021, 4:42 PM EDT ) Canada's securities regulators saw sharp upticks in fraud, insider trading and other malfeasance during the coronavirus pandemic, according to a report filed Tuesday.
In its enforcement report for the 2020-2021 financial year, the Canadian Securities Administrators, which serves as an umbrella organization for Canada's provincial regulatory agencies, reported the collection of more than $60 million in sanctions and restitution and the expulsion of more than 60 corporate and personal securities rulebreakers from capital markets.
"There is no doubt that the past year has been unprecedented and extraordinary," CSA Chair Louis Morisset said in a statement. "We saw an unfortunate rise in wrongdoers who attempted to capitalize on the uncertainty related to the pandemic and the economy."
According to the report, the CSA commenced 52 enforcement actions against accused fraudsters in the financial year — a nearly 37% increase from last year. The CSA also noted a 58% increase in the number of whistleblower tips it received, and said the number of potential fraud alerts it issued more than doubled.
Among those alerts was one on Mercury Crypto Invest, which the CSA said scams investors by promising a guaranteed return on investments in binary options and cryptocurrencies.
The report claims that Canadian regulators identified and disrupted 64 of the roughly 150 coronavirus-related fraud schemes combatted by the international North American Securities Administrators Association. The CSA also claimed responsibility for the successful criminal prosecution and imprisonment of seven individuals on securities fraud charges in the past year.
"The pandemic-driven crisis has revealed the strength and resilience of the CSA, and confirmed that no matter the circumstances, we will always remain steadfast in our commitment to enforcing securities laws and protecting investors in Canada," Morisset said.
Canada's rise in securities fraud actions echoes that of its southern neighbor. In February, the U.S. Securities and Exchange Commission announced that it had issued a record-shattering $188 million in whistleblower awards in 2020, and the U.S. Commodities Futures Trading Commission in June requested and received Senate approval for additional funding for whistleblower awards.
--Editing by Alanna Weissman.
For a reprint of this article, please contact reprints@law360.com.
