Lawyer defends OSC's record on crime
It's unfair – and incorrect – to say that U.S. regulators are better than their Canadian counterparts at rooting out and punishing stock-market crime, according to a panel discussion put on by the Ontario Securities Commission yesterday.
It's essential to recognize and respect the differences between the two systems, securities lawyer Jeffrey Leon said. "Too many people look at Canada and compare it to the United States and say, `What enforcement?'" Leon said.
"It doesn't mean more is better. It doesn't mean bigger is better. We shouldn't judge our success by headlines. The Canadian system is predicated on balance."
Michael Watson, head of enforcement for the Ontario Securities Commission, said that jail sentences of 10 years or more for white-collar criminals are "just not going to happen here. It's not part of the Canadian justice system" and it's not what the general public wants.
There's no evidence that a longer jail sentence deters white-collar crime, he added. "Other than vindictiveness, I'm not sure why people are saying jail sentences are not long enough."
Our justice system is a reflection of Canadian culture, Watson told reporters later. "The attitude in Canada is that there is a lot more room for compassion, and understanding and rehabilitation."
Investor activist Ken Kivenko called these views "frightening."
"Double-check your perception," he said, adding that even the governor of the Bank of Canada has said there is a problem with securities regulation and fighting white-collar crime in Canada. David Dodge has made headlines with comments that Canadian markets are viewed as a "wild west" by global investors.
David Wilson, chair and chief executive of the OSC, said that Canadians who want longer jail times should look to legislators and politicians, not regulators. "It's not my job as a Canadian regulator to talk about criminal sentences," he said, when asked to comment by reporters after the panel discussion.
Critics say the OSC is slow to move on cases where U.S. regulators also tread, such as Nortel Networks Corp. and disgraced media mogul Conrad Black and Hollinger Inc.
Black now faces jail time after being found guilty by a U.S. jury of obstruction of justice and pocketing improper non-compete payments. The OSC issued allegations in March 2005, but the case was put on hold pending the U.S. proceedings.
In May 2007, Nortel agreed to pay $1 million to the OSC to settle allegations of misleading accounting. In October, the company agreed to pay $35 million in a deal reached with the U.S. Securities and Exchange Commission.
Strong investor protection and effective enforcement are among the OSC's top priorities for the next five years, Wilson said in his opening address, which kicked off the commission's day-long conference.
The Securities Fraud Enforcement Working Group has delivered recommendations to provincial justice ministers, such as better sharing of resources and more legal tools for investigators, he noted.
In June, the commission appointed a new executive director, Peggy Dowdall-Logie. The agency is in the process of hiring a special independent adviser on enforcement and ethics matters.
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