The Investment Industry Regulatory Organization of Canada (IIROC) has published its 2016 enforcement report, revealing an increase in complaints, investigations completed, proceedings commenced and sanctions for individuals.
Total sanctions imposed on individuals increased to $3.12 million, up from $2.95 million in 2015 or an increase of 6%. While fines and costs for individuals were higher, disgorgement was lower.
Total sanctions against firms dropped more than 73%, down to $425,000 from $1.6 million in 2015. Fines were significantly lower for firms, as were costs.
While IIROC collected 100% of fines imposed against firms in 2016, it collected only 8% against individuals — a drop of almost 50% from the previous year.
In an effort to improve collections, IIROC obtained court authority to collect sanctions in P.E.I. earlier this year. And, on March 31, the Ontario government announced its intention to introduce legislative amendments to do likewise. IROC already has court authority to collect fines in Alberta and Quebec, where collection rates are higher than the national average.
Here are other highlights:
- 1,459 total complaints received, an increase from 1,341 in 2015
- 138 investigations completed, a 10% increase from 2015
- 55 proceedings commenced, a 25% increase from 2015
- 21 contested hearings conducted, a 61.5% increase from 2015, when there were 13 such hearings
- 40 individuals and six firms prosecuted, compared to 40 and 12, respectively, in 2015
- 20 individuals suspended and two firms terminated, compared to 26 and zero, respectively, in 2015, when there were three firms permanently suspended
- Six individuals permanently banned, compared to five in 2015
Unsuitable investments continues to be the top complaint received and prosecuted, representing 37% of complaints and more than 40% of regulatory prosecutions.
The report also highlights IIROC’s collaboration with other regulators. IIROC signed cooperative agreements with the Financial Services Commission of Ontario and the Insurance Council of British Columbia in 2016, and with the Alberta Insurance Council in January 2017. The agreements allow the regulators to share information, including disciplinary records and documents, and to conduct joint investigations.
Investors can search IIROC’s unpaid fines report for a recent list of those who haven’t paid the full amount of fines and costs imposed.
Information about disciplinary proceedings of current and former member firms is available in the enforcement section of IIROC’s website.
Read the full enforcement report, with highlighted cases and a list of disciplined individuals and firms, here.