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Ontario Securities Commission chair Howard Wetston said wiretaps would be a ‘highly useful tool’ for the investigation of insider trading or tipping.Frank Gunn/The Canadian Press

Howard Wetston's past and present are colliding in new ways.

The chair of the Ontario Securities Commission has inked a new deal to co-operate on investigations with his former employer, the federal Competition Bureau, which he headed in the early 1990s.

While the two regulatory bodies have far different mandates, they say there are enough areas of mutual interest to work on fraud investigations, exchange "information and intelligence," and undertake joint education initiatives.

"It allows us to share information and expertise and provides the opportunity to partner on joint fraud prevention initiatives," Mr. Wetston said in a statement.

The federal Competition Bureau is responsible for investigating anti-competitive behaviour, including false or misleading advertising or sales claims, multi-level marketing pyramid schemes, and deceptive telemarketing campaigns. It also reviews takeover deals to ensure industries remain competitive and there is not undue concentration in too few hands.

All are areas that can intersect with the mandate of the OSC, which oversees trading and sales of securities in Ontario.

The memorandum of understanding announced Tuesday formalizes an already existing co-operation between the agencies. The OSC and Competition Bureau both receive public complaints and tips about telemarketing fraud and price fixing that fall under the other organization's jurisdiction, and they have a practice of exchanging information and working together when needed.

Indeed, the OSC and Competition Bureau worked together last year on an investigation of alleged collusion into the setting of Yen Libor rates and their use in pricing interest rate derivative products. The Competition Bureau announced in January it was discontinuing the investigation after an "exhaustive review" because there wasn't sufficient evidence to justify a prosecution under the criminal conspiracy provisions of the Competition Act.

Securities lawyer Kelley McKinnon, former chief litigation counsel at the OSC who recently served as senior deputy commissioner at the Competition Bureau, says there have not been many areas of securities fraud where the two organizations have needed to work jointly on investigations.

"In the vast majority of cases they have distinct mandates and the distinctions are clear, and it's pretty evident when a matter falls in the mandate of one or the other," she said. "But where there's a prospect for overlap, agencies co-operate with one another."

She said there are occasions when both organizations may be interested in a situation for different reasons, and it makes sense to at least communicate or share information about parallel investigations. One potential area of overlap lies in price fixing cases that affect the investors, such as the Libor investigation, she said.

Both organizations were also involved in reviewing the takeover of TMX Group Inc., owner of the Toronto Stock Exchange, by a consortium of buyers known as Maple Group Acquisition Corp.

The OSC co-operation agreement is far from the first for the Competition Bureau, which has signed numerous similar deals under the term of current Competition Commissioner John Pecman.

The bureau signed a memorandum last October to co-operate with the Canadian Radio-television and Telecommunications Commission and the Privacy Commissioner of Canada on anti-spam investigations. In March, the bureau signed a memorandum of understanding with the Market Surveillance Administrator of Alberta, which oversees the competitive operation of Alberta's electricity and natural gas markets.

Also this year, the bureau announced it had drafted "best practices" guidelines to co-operate on merger investigations with the U.S. Federal Trade Commission and the U.S. Department of Justice antitrust division.