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Anyone who believes crime doesn't pay probably hasn't looked at Canada's woeful record of punishing people who peddle investments in fake companies and other financial frauds.

Life is far too comfortable for white-collar criminals in this country. Even when caught by securities regulators, they rarely pay fines or go to jail. Authorities seldom even try to recover money stolen from investors because it's deemed to be too difficult. And if things get a little hot in one province, offenders can easily move down the TransCanada Highway to exploit gaps in the country's patchwork of provincial and territorial securities regulation.

It's apparently so easy and lucrative that one in nine people found guilty of financial crimes by Canadian securities regulators return to do it again, according to a year-long investigation by The Globe and Mail's Grant Robertson and Tom Cardoso. Based on conservative estimates, these repeat offenders have stolen hundreds of millions of dollars from unwitting investors.

The story's sobering conclusion: "At the heart of Canada's financial crime is the near inability to punish offenders."

Authorities often come down harder on car thieves, burglars and small-time drug dealers.

Regulators owe it to Canadians to do better. Among the multitude of problems, highlighted by The Globe's investigation: weak securities laws, inadequate penalties, the absence of a national securities regulator and a lack of resources devoted to criminal prosecutions. Some blame also goes to the Supreme Court of Canada, which in a 2001 decision limited the power of securities regulators by ruling that their job is not to punish perpetrators, but to dissuade repeat behaviour.

Perhaps the most significant problem is the bias of regulators for seeking redress through administrative sanctions rather than full criminal proceedings. The reasons are complicated, but the bottom line is that criminal cases are costlier to prosecute and less likely to succeed because the burden of proof is higher. As a result, regulators often opt for the easier route to a legal win, even if the eventual penalties are weak.

From the victims' perspective, it must be crushing to watch offenders keep what they stole, duck fines and then victimize others in some new scam. What securities regulators see as a legal "win" would probably seem like a betrayal to someone who has lost their life's savings in an investment scam.

It isn't just that the punishment doesn't match the scale of the offence. If so many fraudsters are reoffending, the sanctions are a poor deterrent. In a typical securities fraud case, offenders may be fined and barred from acting as officers or directors of companies. But after a quick name change, they can be back in business.

Offenders are getting the message: the rewards of financial fraud in Canada far outweigh the consequences of getting caught.

To counter that impression, regulators need to pursue more criminal cases – even if it means fewer wins. Putting a small number of high-profile offenders behind bars for a long time would send a potent message.

The threat of longer sentences for these types of crimes would also give prosecutors more tools to do deals with offenders. For example, those found guilty could be offered a reduction in jail time in exchange for compensating victims.

Regulators could also do a much better job of educating the public about how to identify financial fraud.

Finally, securities regulators need to do a better job of prosecuting the highest-profile cases of alleged fraud, such as Bre-X Minerals and Sino-Forest. The Bre-X case ended in the acquittal of the only man charged, geologist John Felderhof. In the Sino-Forest case, the OSC is poised to impose sanctions after ruling that four former top executives defrauded investors. Given that all of them are now in China, they are unlikely to feel the sting of the maximum penalty – $1-million fines and permanent banishment from Canadian capital markets.

Investors lost billions of dollars in Bre-X's faked Indonesian gold find and Sino-Forest's phantom timber riches. And no one is going to jail.

The moral of the story is that duping investors pays really well, especially in Canada.