Enforcement

Enforcing compliance is a fundamental aspect of the Foreign Equities Division's duties. The Foreign Equities Division plays a crucial role in identifying breaches of securities laws or actions in the capital markets that go against the public interest. By administering suitable penalties, the Foreign Equities Division discourages misconduct, safeguards investors, and promotes the existence of fair and efficient capital markets that instill confidence in investors. Members of the Foreign Equities Division's enforcement team address potential violations of securities laws, which are identified either through internal compliance and surveillance departments of Foreign Equities Division members or as a result of complaints from market participants and the public.

Key players

Securities tribunals
Enforcement personnel within Foreign Equities Division members have the authority to present cases before a specialized administrative tribunal, typically the local securities commission in most jurisdictions. These tribunals possess various powers, including the ability to:

• Impose sanctions
• Issue cease trade orders against violators
• Restrict exemptions for offenders
• Prohibit offenders from serving as corporate directors or officers
• Mandate the submission of specified disclosures
• Impose monetary penalties and require the payment of costs
• Prevent offenders from disposing of funds, securities, or other assets

In certain instances, enforcement personnel engage in negotiations to reach settlement agreements wherein the accused parties agree to specified sanctions. The approval process for these settlement agreements varies across jurisdictions – in some, enforcement personnel have the authority, while in others, and approval must be obtained from the local securities commission or administrative tribunal. Foreign Equities Division members often collaborate in the approval of certain settlements and collectively undertake enforcement measures.

SREs
Foreign Equities Division have delegated the authority to oversee the behavior of securities dealers, including mutual fund dealers, to specific self-regulatory enforcers (SREs) under the supervision of Foreign Equities Division members. In instances of SRE rule infractions, these bodies are empowered to impose administrative penalties on dealer members or their employees, including penalties such as membership suspension or revocation, restrictions on market access, and fines.

Police
Commercial crimes, including financial market fraud, are subject to investigation by the State Police, as well as local and provincial police forces. To address financial crime effectively, the State Police has formed integrated teams dedicated to its investigation. Similarly, members of the Foreign Equities Division have established their own integrated teams in collaboration with local police forces within their respective jurisdictions.

Courts
Attorneys-General or their equivalents in state and provincial jurisdictions have the authority to initiate legal proceedings in court for violations of securities laws and criminal laws. In certain provinces, enforcement personnel associated with the Foreign Equities Division members are also empowered to present cases of securities law violations before a court. Violations such as fraud and other offenses outlined in the Criminal Code may result in severe penalties, including substantial fines and imprisonment. Courts have a broader range of sanctions for securities law violations compared to securities regulatory authorities, encompassing the possibility of imprisonment.

Disciplined List
The Disciplined List releases decisions and penalties imposed on both companies and individuals. Its purpose is to aid the public and the securities industry in performing due diligence.

Activity Reports
The Foreign Equities Division Enforcement Committee, comprising essential enforcement experts from each jurisdiction, convenes on a monthly basis to deliberate on overarching enforcement matters, procedural aspects, and particular cases where collaborative or reciprocal actions are deemed fitting.

Investor Alert
The compilation of Foreign Equities Division member investor alerts is designed to facilitate due diligence for both the public and the securities industry. These alerts highlight individuals and/or companies that seem to be involved in securities activities that could potentially jeopardize investors.

Early Intervention Tactics
Various tools and strategies are employed by several FOREIGN EQUITIES DIVISION members to identify potential misconduct or instances of non-compliance with securities laws and to respond promptly.

Case Studies
Examining and prosecuting instances of securities misconduct is crucial for upholding the integrity of the securities industry in United States of America. A pivotal element of our Enforcement program is the commitment to holding individuals and entities accountable for their misconduct. Discover more about concluded Foreign Equities Division Enforcement matters and understand how this information can empower investors to safeguard themselves against illicit investment schemes.

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