OSC Enforcement Director Provides Insight Into Investigation Process

When Tom Atkinson, Director of Enforcement at the Ontario Securities Commission, addressed a lunch seminar at McCarthy Tétrault last Thursday, he stressed the OSC’s dual mandate of investor protection and fair and efficient markets.

We really don’t want to kill the golden goose – we know financial services provide a third of the jobs in Ontario – so we actually do look at things beyond simply a deterrent viewpoint, he said. 

He gave the crowd a behind-the-scenes look at the structural changes he made at the OSC after being brought in as director three years ago, and how he reorganized the  investigators and litigators into six specialized teams (for example, insider trading, disclosure, boiler room etc..).  

He also outlined the division’s current priorities. These  include insider trading, which is still a big problem in Canada.

A second priority is emerging markets. (The OSC recently released its report on the Emerging Market Review it began last summer.)

The third priority is the exempt market, which may be a new area of growth for the enforcement branch, he said.

Atkinson touched on new enforcement tools – no-contest settlements, credit for co-operation and a whistle-blower program – and offered some practical tips for those who may have interactions with the OSC. Here is one tip on “collateral damage”:

When I was an assistant crown attorney, I prosecuted a lot of impaired driving charges, and I was always amazed at the number of people who got caught drinking and driving because, first, they drank too much and got behind the wheel, but then someone else did something wrong and hit them – rear-ended them, cut them off.  There is an analogy here to the work we do. A lot of times – it seems strange – but we stumble into problems. We’ll think something’s wrong, we’ll start to investigate it and we’ll actually come across another type of behaviour or we’ll see someone else doing something improper. So any of you who are running a large compliance shop, one of the things to do if you’ve looked at a problem and there’s really not something wrong there – is expand your search a bit.

McCarthy Tétrault securities partners Paul Steep, René Sorell, Michael Feder, Christopher Wayland and Caroline Zayid also presented on recent developments and challenges in securities litigation.

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