The Ontario government has received praise from the Investment Industry Regulatory Organization of Canada (IIROC), CARP and Prosper Canada, for proposing legislative amendments aimed at protecting investors in Ontario from abuse.
The government is proposing legislative changes that would allow self-regulatory organizations (SROs) to collect fines levied against individuals, said the Ontario finance minister Charles Sousa in a keynote address March 31 at a financial services conference in Toronto. IIROC, CARP and Prosper Canada have been advocating for the government to amend the Ontario Securities Act in such a way as to give the IIROC more disciplinary authority.
A message of deterrence to potential wrongdoers
In a joint announcement released March 31, executives from all three organizations praised the Ontario government for its intention to bring forward the amendments that they feel will help the IIROC hold wrongdoers accountable.
"We applaud the Ontario Government and the Minister of Finance for their leadership in sending this important message: if you harm investors in this province you will be held accountable for your actions and pay the penalty," says IIROC President and CEO Andrew Kriegler. "As a public interest regulator, this new enforcement tool will enable us to provide stronger protection to the investing public and collect fines from wrongdoers who have previously evaded paying the penalty for their misconduct."
A critical first step
"I have had heartbreaking conversations with members who have lost their life savings. There is more to be done, but (this) announcement is a critical first step,” says Wanda Morris, VP advocacy and COO, CARP (formerly known as the Canadian Association of Retired Persons). “CARP applauds the Minister's announcement…as enabling IIROC and others to collect fines will deter rule breakers and better protect investors."
"Effective protection against financial fraud and wrongdoing is critical to Canadians' capacity to build their financial health and security and includes both well-crafted laws and the ability to enforce them," says Prosper Canada's CEO Elizabeth Mulholland. Prosper Canada is a national charity aimed at expanding economic opportunity for Canadians living in poverty. "We are pleased to see the Government of Ontario continue to champion consumer protection by giving IIROC an important tool to protect Ontario investors and ensure a fair and healthy financial marketplace for us all," Mulholland added.
$20 million in unpaid fines owing to IIROC
There is nearly $20 million in unpaid fines owing to IIROC in Ontario dating back to 2008 and a total of almost $32 million outstanding across the country, says IIROC. In 2016, the regulator collected approximately eight per cent nationally of the fines owing by individuals who have breached the regulator's rules by, for example, is appropriating funds from clients, falsely endorsing client signatures and/or making unsuitable recommendations to investors, many of them seniors who have suffered significant financial losses.