IIROC has published its 2015 Enforcement Report. Total sanctions imposed increased year over year, while the fine collection rate fell.
Last year, IIROC levied over $4.5 million against firms and individuals nationally, compared to $3.67 million in 2014. While IIROC collected 84% of the fines assessed against firms (100% in 2014), it only collected 13.2% of the fines against individuals across the country (versus 19.8% in 2014).
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“As a public interest regulator, we need to have the tools necessary to vigorously and effectively protect the public. That’s why we have been seeking legislative changes that would enable us to improve the collection rate of fines and send a strong message that if you breach the rules and abuse the trust of your clients, you must pay the penalty,” said IIROC president and CEO Andrew Kriegler.
Currently, IIROC has the ability to enforce decisions it has sanctioned through the courts in Alberta and Quebec and is pursuing similar amendments to extend this authority in other jurisdictions.
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The report also highlights IIROC’s concerns and the steps it has taken to address the issue of disciplined individuals who avoid regulatory consequences by merely leaving an IIROC-regulated firm to work in another area of financial services. In 2015, IIROC negotiated a Memorandum of Understanding (MOU) with Quebec’s Chambre de lasécurité financière (CSF) that will automatically trigger review of the sanctioned individuals by the other regulatory organization, which may result in an investigation or other appropriate action.
Earlier this week IIROC signed an agreement with FSCO, which will take into account the fitness of those individuals applying for registration with both regulators based on previous disciplinary history. As a result, IIROC has now put in place agreements with over a dozen regulators and other authorities in Canada and abroad and is continuing to pursue others in order to better protect the public.
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According to the report, in 2015 IIROC completed 124 investigations and successfully prosecuted 40 individuals and 12 firms. Other key stats:
- nearly 50% of prosecutions against individuals involved violation of suitability – once again, being the top matter prosecuted
- majority of suitability cases involved elderly and/or vulnerable clients
- suspended and/or terminated 3 firms and suspended 26 individuals
- permanently barred 5 individuals from working at an IIROC-regulated firm in a registered capacity
- imposed total sanctions of $2.95 million against individuals and $1.59 million against IIROC-regulated firms
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