If a panel of the British Columbia Securities Commission decides that an individual or company committed securities misconduct, it can impose financial sanctions and prohibitions from participating in the market. These sanctions are aimed at deterring future misconduct by the respondents, and by anyone else who might be tempted to violate securities laws.
Any individual who has been sanctioned by the commission is listed on the BCSC’s website.
Administrative monetary penalties
Under Section 162 of the Securities Act, the commission can order an administrative penalty of up to $1 million for most violations. The amount of the penalty is determined by the seriousness of the violation and the harm done to investors and to the integrity of the investment markets.
Money received for payment of administrative penalties is allocated to investor education, payments to third parties harmed by the misconduct, and collections activities.
Under Section 161(1)(g) of the Securities Act, the commission can order a respondent to pay the amount that they obtained (or avoided losing) through the misconduct – in other words, their “ill-gotten gains.”
If the commission receives money under a disgorgement order, it can return this money to investors who suffered financial harm in that case.
Prohibition against market participation: Under Section 161(1)(a to f), the commission can suspend or permanently ban an individual or company from participating in the market. The activity that can be banned includes:
- Trading in or purchasing securities or exchange contracts
- Relying on exemptions in the Securities Act, regulations, or a decision
- Becoming or acting as a director or officer of an issuer or registrant
- Becoming or acting as a registrant or promoter
- Acting in a management or consultative capacity in connection with activities in the securities market
- Engaging in investor relations activities
Violating a prohibition against market activity is a quasi-criminal offence under the Securities Act, and if convicted, the person could be sentenced to prison.