The BCSC is not limited to taking enforcement action against issuers and registrants. We can take enforcement action against a person or company whenever we suspect that securities-related misconduct has occurred in BC’s capital market, including cases involving:
- Illegal distributions and fraud
- Market misconduct (e.g. market manipulation and insider trading)
- Regulatory compliance, including non-compliance by dealers and issuers
When it comes to enforcement, our objectives are to deter misconduct and mitigate investor losses through early disruption and timely enforcement.
When the BCSC takes formal action against wrongdoers, it decides on the type of proceedings, depending in part on the nature of the misconduct.
One option is an administrative investigation which can lead to a hearing before the BCSC’s tribunal – an administrative panel that hears evidence, decides whether the allegations are proven and, if they are, what sanctions to impose, such as monetary penalties, orders to disgorge ill-gotten gains and exclusion from the marketplace. These sanctions are aimed at deterring future misconduct by the respondents, and by anyone else who might be tempted to violate securities laws.
Read more about the types of administrative sanctions the BCSC can impose.
Any individual or company who has been sanctioned by the commission is listed on the BCSC’s website and on the CSA’s “Disciplined List”.
Most of Canada’s 13 provinces and territories (including British Columbia) have a reciprocal order provision in their securities legislation, under which sanctions (other than monetary sanctions), conditions, restrictions or requirements imposed by one securities regulator are automatically in effect in the other jurisdictions. Provinces and territories without such automatic provisions bring proceedings to apply the orders in their jurisdiction, especially if the offender has or could have a connection to the jurisdiction.
The other option is a criminal investigation. The BCSC’s Criminal Investigations Branch investigates offences under BC’s Securities Act (known as “quasi-criminal offences”) and securities-related offences in Canada’s Criminal Code. We then recommend charges to the BC Prosecution Service, and if they are approved, a Crown Counsel prosecutes them in court. If a person is convicted, the court can impose various penalties including jail, fines, disgorgement and restitution.
Fraud, illegal distributions of securities and unregistered activity are common Securities Act violations that the BCSC deals with. You will see these types of cases in many of our news releases.
Common types of securities market misconduct are misrepresentations, unregistered trading and advising, illegally selling securities (for example, selling securities without a prospectus), insider trading, and market manipulation.
If we determine public action is needed, we take steps such as issuing a halt, cease trade or temporary order or a notice of hearing.
The BCSC decides on a case-by-case basis whether to pursue a case criminally or administratively.
We consider the:
- seriousness of the misconduct, including the number and vulnerability of victims, harm caused, duration, frequency, planning, complexity
- type of misconduct, including degree of dishonesty and deceit, and
- history of misconduct if any, including prior criminal or quasi-criminal convictions and administrative sanctions or settlements
Until a panel determines that misconduct has occurred, the allegations are just that – unproven allegations.
Respondents are allowed to participate in the capital markets, subject to any temporary orders that have been imposed by the panel on particular respondents.
It depends on the specific case. In many cases we are not able to provide any details about the case that are not included in the Notice of Hearing or a settlement. Please email email@example.com or call 604-899-6713.
The Commission publishes Notices of Hearings, Decisions and Settlements on its website. The Commission does not publish hearing transcripts, evidence, and arguments on its website. However, it does make these documents available to members of the news media upon request. The Commission will consider applications having regard to the public interest and privacy interests. Applications must be sent to the secretary to the Commission at firstname.lastname@example.org.
Certain types of misconduct in BC’s Securities Act can be prosecuted in court, with the potential for prison sentences if convicted. These are called “quasi-criminal charges,” because they are not rooted in Canada’s Criminal Code. The maximum sentence for most quasi-criminal convictions is five years in prison and/or a fine of up to $5 million per offence.