CSA 2021-2022 Enforcement Report highlights: Regulators’ Actions to Hold Securities Law Violators Accountable

CSA | Release | Jun 29, 2022

Wide-ranging actions included disrupting ongoing and illegal activity and enhancing technology and analytics capabilities to tackle evolving threats and emerging trends 

Montreal – The Canadian Securities Administrators (CSA) today released its fiscal year 2021-2022 Enforcement Report, which outlines the specific actions that CSA members undertook in the past year to detect, disrupt and deter wrongdoing and hold securities law violators accountable.

Highlights from the fiscal year 2021-2022 Enforcement Report include: 

• 236 Investor Alerts warned the public about potential harmful or illegal activity;
• 61 interim cease-trade and asset-freeze orders issued;
• 59 matters commenced involving 139 respondents;

• 14 crypto-related matters where the CSA took action in pursuit of clarifying and enhancing regulation;
• 44 individuals and 13 companies banned from participating in the capital markets; and,
• 7 individuals received a combined total of 15.4 years of jail terms for criminal and quasi-criminal cases.

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Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers:

This year’s Enforcement Report highlights how CSA members collaborated with each other and with regulators around the world to take action against securities misconduct, protect investors, and strengthen the integrity of our capital markets.  We pursued activities to disrupt ongoing and potential illegal activity and enhance our market analytics capacity to support our investigations and tackle sophisticated and evolving threats. I’d like to thank the hard-working and determined staff from CSA member jurisdictions who work tirelessly to identify wrongdoing and hold securities law violators accountable.

Select highlights of the report mentioning Crypto:

• CSA members were part of a 20-country investigation that resulted in the United States Securities and Exchange Commission charging defendants for participating in multi-year fraudulent penny stock schemes that generated more than USD$194 million in illicit proceeds.
• CSA members engaged in a number of NASAA initiatives, including virtual investigative training to help support cross- jurisdictional enforcement efforts and NASAA Connect, an online community that provides a place for members to share information, collaborate and ask and respond to questions.

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• Improved our market analytics capacity and our technological capabilities to support our investigations and tackle sophisticated and evolving threats including refining our techniques to research and analyze crypto asset trading to better understand the full ecosystem and identify opportunities to disrupt misconduct at every stage, from investor solicitation to advertising to investing.
• We collaborated with third parties, such as law enforcement, the Canadian Anti-Fraud Centre, website domain registrars and crypto exchanges to root out misconduct and target fraudsters who lure investors into scams.
• Unfortunately, investors reported instances of high-pressure sales tactics being used to lure Canadians into fraudulent investment offerings, particularly related to crypto assets. The ease of using social media and the internet to disseminate false information, as well as the escalating market interest in crypto assets, were likely factors.
• The Enforcement Technology and Analytics Working Group, comprised of CSA members across the country, developed a reference framework on the establishment of digital forensic laboratories in a cloud-based environment.
  • We developed and conducted training around novel technology and analytics issues and trends to ensure all jurisdictions have the latest insights to improve their enforcement capabilities, such as data mining the web, application programming interfaces for crypto asset trading platforms, and the use of decentralized finance technologies.

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Download the 14 page PDF 2021/22enforcement report –> here

 

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