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Risk Management and Crisis Response

Insights on Avoiding and Addressing Corporate Crisis

Canadian government publishes consultation paper for a review of the legislative and regulatory framework of Canada’s financial sector

Posted in Regulatory Compliance and Enforcement

tradeboard with a penBackground

Officers, Directors of regulated businesses and advisors must keep up with evolving regulatory and other policy priorities as a matter of effective risk management.  Few could deny that this can be challenging in the face of the avalanche of reviews and proposed revisions to the financial and capital markets landscape since the meltdown of the past decade.  Whether it be aimed at ushering in a national / common / cooperative capital markets regime, reforming the provincial financial services regulatory regime, or the regulatory framework for registered market participants, investors, consumers and regulated businesses alike have faced an avalanche of reform initiatives.  Now it is the federal government’s turn as it embarks on a wide ranging review of its financial legislation and regulatory framework. Continue Reading

Government report indicates potential overhaul of Ontario labour and employment landscape

Posted in Regulatory Compliance and Enforcement

Ontario employers may soon face significant changes to workplace laws. That is the main conclusion that can be drawn from the recently released Changing Workplaces Review: Special Advisors’ Interim Report (the Interim Report). While the stated focus of the Review is on issues facing “vulnerable workers in precarious jobs,” many of the potential changes would impact all provincially-regulated employers and employees in Ontario. The Review deals exclusively with the Employment Standards Act, 2000 (the ESA) and the Labour Relations Act, 1995 (the LRA), and does not address other laws concerning health and safety or discrimination.

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DOJ’s Major Insider Trading Victory: a Blueprint for post-Newman Convictions?

Posted in Regulatory Compliance and Enforcement

Improper disclosure of confidential information and insider trading remains very much a focal point for regulators and prosecutors on both sides of the border. As such, policing it within any organization continues to be a priority for compliance officers and directors of all public companies. Uncertainty surrounding what constitutes impermissible insider trading and tipping as a result of various cases in recent years has challenged enforcers, both inside and external to public issuers. Continue Reading

SEC Enters into Two Non-Prosecution Agreements for Alleged FCPA Violations

Posted in Regulatory Compliance and Enforcement

Looking upwards towards the sky reflection in the building's glass windowsIn June 2016 the US Securities and Exchange Commission (SEC) announced that it had entered into two non-prosecution agreements (NPAs) with two unrelated companies whose foreign subsidiaries had each provided improper payments and gifts to Chinese government officials, contrary to the Foreign Corrupt Practices Act (FCPA). To resolve the allegations, Akamai Technologies, Inc. will pay US$652,542 in disgorgement and US$19,433 in interest, and Nortek Inc. will pay US$291,403 in disgorgement and US$30,655 in interest. The NPAs specify that the companies are not charged with violations of the FCPA nor will they pay additional monetary penalties. Continue Reading

SEC Continues to Penalize Companies which Restrict Whistleblowing or Seek Waiver of Payment of Whistleblower Incentive Payments

Posted in Managing Internal Risk, Regulatory Compliance and Enforcement

Metal sport whistle with pen and paper sheetAs whistleblower initiatives build steam in Canada, the United States and throughout the world, executives, and board members face evolving challenges that accompany them. Some of these relate to how firms need to deal with departing employees. In an order dated August 10, 2016 (the “BHI Order”), an administrative judge of the Securities Exchange Commission (“SEC”) imposed a USD $265,000 penalty on BlueLinx Holdings Inc.(“BHI”). BHI had used various versions of severance agreements that had the effect of prohibiting or discouraging its employees from reporting misconduct to the SEC, and in some cases, required its departing employees to waive their rights to receive whistleblower awards. A similar order dated August 16, 2016 (the “Health Net Order”) imposed a USD $340,000 penalty on Health Net, Inc. (“Health Net”) which expressly permitted departing employees to file a charge, provide information, or participate in any investigation or proceeding before any federal or state agency or governmental body, but required the employee to waive any right to individual monetary recovery based on any communication by the employee to the government agency or department. These orders send a strong message to market participants that the SEC is committed to ensuring potential whistleblowers are not in any way discouraged from coming forward with information regarding securities law misconduct. Continue Reading

U.K. Serious Frauds Office Enters into Second Deferred Prosecution Agreement to Resolve Corruption and Bribery Charges

Posted in Managing Internal Risk, Regulatory Compliance and Enforcement

London UKThe U.K. Serious Frauds Office (the SFO) on July 8, 2016 obtained its second deferred prosecution agreement (DPA). The Southwark (London) Crown Court approved the SFO’s application for a DPA relating to a defendant company indicted for conspiracy to corrupt and bribe contrary to section 1 of the Criminal Law Act 1977 and failure to prevent bribery under section 7 of the Bribery Act 2010. Continue Reading

A Review of New Whistleblower Protections Under Ontario’s Securities Act

Posted in Regulatory Compliance and Enforcement

MacBookAir and a man typingIn connection with the establishment of the Ontario Securities Commission’s new Whistleblower Program in July 2016, which includes monetary incentives for whistleblowers in Ontario, the Ontario government has approved amendments to the Securities Act (Ontario) (the “Act”) to provide additional protection to persons who report a potential violation of Ontario securities law or a by-law or other instrument of a self-regulatory organization. The amendments were proclaimed into force on June 28, 2016. Continue Reading

Three Scotia Dealers Reach No-Contest Settlement with OSC

Posted in Regulatory Compliance and Enforcement

photo-1458242629894-cf9a6bda80d6_700x350On July 29, 2016, the Ontario Securities Commission approved a no-contest settlement agreement with three Bank of Nova Scotia dealers in connection with fee overcharges that had gone undetected by the dealers’ internal control systems, and that had affected thousands of clients dating back to 2009. As a part of the settlement, the Scotia dealers agreed to implement a compensation plan to pay back the impacted clients in the amount of nearly $20-million. Also included as a part of the settlement was a “voluntary payment” by the dealers in the amount of $800,000 for use by the OSC for the purpose of educating investors, and a further payment of $50,000 for Staff’s costs of the investigation. This settlement is the fifth of its kind under the OSC’s no-contest regime, and demonstrates the importance of identifying problems internally and cooperating with the regulator to the extent possible in the circumstances. Continue Reading

Initial Board of Directors and New Implementation Timelines Announced for Canada’s Securities Regulatory Regime

Posted in General, Regulatory Compliance and Enforcement

BoardroomIn an important step towards implementing Canada’s Cooperative Capital Markets Regime, the participating jurisdictions have made the long awaited announcement of who will serve as the initial Board of Directors for the proposed Capital Markets Regulatory Authority.

As we have previously posted, the appointment of the Board of Directors is a crucial prerequisite to advance the move to the more streamlined capital markets regulatory framework promised by the initiative, now supported by 6 provinces, one territory and the federal government. The announcement reflects the efforts of the initial Nominating Committee appointed by the council of participating Ministers in April 2015, as discussed in our previous post. Continue Reading

The Long-Awaited OSC Whistleblower Program Is Now In Force

Posted in Regulatory Compliance and Enforcement

Whistle on a blackboardOn July 14, 2016, the Ontario Securities Commission (the “OSC”) broke ground in Canada when it officially launched its widely anticipated Office of the Whistleblower and its Whistleblower Program. As the first “bounty-for-tips” program in Canada, it will provide financial incentives to those who report corporate misconduct to the OSC. As such, the Whistleblower Program is attracting significant attention.

Kelly Gorman, the newly-appointed Chief of the OSC’s Office of the Whistleblower and Deputy Director of the OCS’s Enforcement Branch, said at a seminar hosted by Osler on July 20, 2016, that this program will be a “powerful tool in the Enforcement Branch”. She emphasized that “whistleblower tips will be very valuable information for us because they have information about companies that may often times be hard for us to access”. Continue Reading