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Joseph Groia is a lawyer and principal at Groia & Company Professional Corporation in Toronto and a former director of enforcement of the Ontario Securities Commission. Brendan Monahan is a litigation associate at Groia & Company in Toronto.

It is often said that "where there's a will, there's a way." When it comes to the enforcement of securities laws in Canada, we believe that it's the "will" that's missing, not the "way."

We read with interest the timely articles by Grant Robertson and Tom Cardoso, and the accompanying editorial published in The Globe and Mail last month.

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The authors quote regulators who claim to have their wings clipped by a Supreme Court ruling. They say the ruling has limited their power to police markets because of ineffective measures such as temporary suspensions and fines that don't go far enough to punish violators.

Regrettably, the regulators are just flat out wrong. That Supreme Court decision, a 2001 judgment written by former justice Frank Iacobucci, applies only to regulatory proceedings brought before a panel of commissioners sitting as an administrative tribunal. Justice Iacobucci found the powers of such tribunals to make orders in the "public interest," are forward-looking and preventative. They are not intended to punish wrongdoers or to compensate investors for financial losses. These are well-accepted principles of administrative law given the nature of those kind of cases.

But provincial securities commissions such as the Ontario Securities Commission (OSC) have other powerful options at their disposal. In Ontario, OSC staff can initiate quasi-criminal proceedings in the Ontario Court of Justice, which has the authority to impose jail terms of up to five years, or fines of up to $5-million, or both, for every charge laid. The OSC also has the power to apply to the Ontario Superior Court of Justice for a variety of civil remedies, such as an order requiring a wrongdoer to pay compensation to harmed investors. There are also a variety of securities offences in the Criminal Code where even more substantial jail sentences are possible.

Whether the securities commissions choose to use these powers is another question. In our experience, all too often, provincial regulators choose to deal with alleged wrongdoers through administrative proceedings. Violations are easier to prove this way, than through the criminal or quasi-criminal prosecutions in the courts, which impose a "beyond a reasonable doubt" burden of proof. Prosecutions in the courts also require commission staff to navigate and act in accordance with the accused's Charter rights. By contrast, courts have found the Charter doesn't apply to administrative proceedings.

In recent years, the administrative sanctions imposed by provincial securities commissions have also ballooned in size and frequency. This past December, British Columbia's highest court upheld an administrative fine totalling more than $43-million against Ponzi-scheme operator Rashida Samji. The Court found the fine did not constitute a "true penal consequence," and therefore did not prohibit a criminal prosecution of Ms. Samji in respect of the same misconduct. In 2016, she was convicted of fraud and sentenced to six years in prison.

While provincial regulators are criticized for the perception that violators get off with a mere slap on the wrist, the problem often has more to do with the means regulators choose to enforce the law, rather than the tools available to them. Criminal and quasi-criminal prosecutions are seen by some regulators as too difficult, or too high risk to justify the time and expense necessary to bring such cases to trial. The OSC, Canada's largest provincial regulator, clearly has the resources to prosecute these cases if it chooses to do so. According to its most recent annual report, the OSC generated more than $119-million in revenue for the year ended March 31, 2017, all of which was self-funded from fees charged to market participants. The Ontario government actually does not spend much of its own money protecting the capital markets.

So what's the solution? For a start, the OSC needs to lay more criminal charges; both provincially and under the Criminal Code when appropriate. Yes, these cases are harder to prosecute, and yes, they are more expensive. But when they are successful, we have seen that Canadian courts are quite willing to hand out lengthy sentences and probation orders when they are justified. In the longer term, we must sidestep the endless debate about a national securities commission and kickstart efforts to create a national securities-enforcement regulator that can operate as a full partner at the international level with other law-enforcement agencies around the world.

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In our view, there is no doubt that provincial securities commissions have all the tools they need (and then some) to police the Canadian markets effectively. It's just the will to take on the hard cases that is sometimes lacking.

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