Source: gizmodo.com

The Ontario Securities Commission (OSC) has begun discussions with legislators and law enforcement agencies in an effort to expand its powers to include wiretapping rights with respect to parties under investigation.

As the country’s largest and most influential securities regulator, the OSC’s policies and decisions impact the majority of brokerages, mutual funds, and pension funds in the country.  In recent years the OSC has placed emphasis on the need for more comprehensive anti-fraud and law enforcement strategies.
Continue Reading Provincial securities regulator seeks expanded powers to combat fraud and insider trading

Our team has been monitoring some key developments that could soon impact US and Canadian companies that list shares on US exchanges. One of 2014’s most important legal developments is likely to flow from the US Supreme Court’s ruling on “fraud on the market” theory, to be rendered in Halliburton Co. v. Erica P. John Fund Inc. (“Haliburton”). Oral argument in Halliburton took place on March 5, 2014.

In Halliburton, the US Supreme Court has been asked whether “it should overrule or substantially modify the holding in Basic v. Levinson, 485 U.S. 224 (1988) … to the extent that it recognizes a presumption of class-wide reliance derived from the fraud on the market theory.”  The decision in Halliburton is expected to be of importance given that in Amgen Inc. v. Connecticut Retirement Plans, a case decided in early 2013, members of the Supreme Court expressed concern with respect to the fraud on the market theory. 
Continue Reading “Fraud on the market” and securities class actions

The RCMP’s Greater Toronto Area Financial Crime team has arrested and charged six people in an alleged fraudulent investment scheme. The RCMP has reported that the alleged fraud worked by enticing investors to purchase business tax losses valued far in excess of their investments. The companies used by the accused included: Integrated Business Concepts (IBC), Synergy Group 2000, Cason Global Wealth Association (CGWA) and IBCA 2009.
Continue Reading RCMP arrest six in alleged investment fraud

Source: Thinkstock

As part of Fraud Prevention Month, the RCMP is rolling out tip sheets to help Canadians protect themselves against an ever-growing number of scams and frauds including a list of “Top 10 Cyber Crime Prevention Tips”.  Many of these tip sheets highlight the role of technology in fraudulent schemes and the importance of ensuring that personal information remains secure and confidential.  For example, the RCMP warns against various forms of online shopping fraud, such as where fraudsters sell products at deeply discounted prices so they can steal the personal information and payment card details of unsuspecting buyers. 
Continue Reading Cyber crime is a growing threat

In Voltage Pictures LLC v. John Doe and Jane Doe (2014 FC 161), Voltage, a film company in the United States, demanded that TekSavvy, an Internet provider, disclose the names of approximately 2000 subscribers which Voltage alleged infringed the copyright in its films, including its Oscar nominated film The Hurt Locker, so that it could presumably launch actions against these individuals.
Continue Reading Recent case on copyright enforcement seeks to balance copyright holders rights and privacy rights

How do you uncover a suspected fraud when you cannot obtain any information from the suspected fraudster in the first place? And what do you do if the suspected fraudster has avoided complying with a court order to produce documents? One under-utilized strategy is to seek to appoint a receiver over the books and records of the alleged fraudster.
Continue Reading Strategy for uncovering a suspected fraud

Source: lawinquebec.wordpress.com

Employee surveillance is an excellent and available method by which companies can protect against fraud.  Monitoring of company-supplied hardware, software and access is perfectly legal and arguably compelling in Canada.  Many still act under the mistaken belief that when it comes to personal communications such as e-mail and social media forums such as Facebook and Twitter, anything intended as private and personal is protected.

In truth, such privacy is very limited. The legal rubric underlying such an assumption is “reasonable expectation of privacy”, an expression borrowed for global adaptation from the 4th Amendment to the US Constitution, and protected in the Canadian Charter.  Historically, personal communications and the privacy protections afforded them were sacrosanct. In addition to the medium of ‘snail mail’ being confidential in its own right—the sealed envelope—most jurisdictions honoured the British-based “Royal Mail Rule” premised upon the opening of personal mail as verboten.
Continue Reading Anti-fraud monitoring: The employer’s right of surveillance

As of February 24, 2014, prosecutors in the United Kingdom will have a new tool in their arsenal to combat corporate criminal wrongdoing. After a lengthy consultation process, and with the benefit of observing a longstanding U.S. practice, the British Parliament amended its Crime and Courts Act to allow for Deferred Prosecution Agreements (“DPAs”). Canadian lawmakers should carefully review this new legislation, as well as the U.S. DPA program, as either system would be a step in the right direction for Canada.  

To date, federal officials in Canada have not shown an interest in introducing a DPA system for use by Canadian prosecutors tasked with combatting commercial crime. A DPA system, however, has many advantages for both the regulator and the regulated that Canada should consider. For the regulator, it provides the benefit of internal investigations that are funded by industry and disclosed voluntarily, which saves massive government resources. For the regulated, they avoid a conviction and admission of liability, which minimizes legal and reputational damage. The newly adopted U.K. regime provides a new model for Canada to consider alongside the American regime.
Continue Reading Deferred prosecution agreements arrive in the U.K.; food for thought for Canada

When a Ponzi scheme collapses, as with musical chairs, there will be some investors with a place to sit, while others are bereft of such comfort. Unlike musical chairs, the first time the music stops for most Ponzi schemes, the majority of the participants are on the losing end.  A recent British Columbia decision in the Bankruptcy of Rashida Abdulrasul Samji explored what happens when some of the fortunate few “winners” in an alleged Ponzi scheme negotiate a resolution with a bankruptcy trustee responsible for making decisions in the best interests of all the creditors of the bankrupt entity at the centre of the alleged scheme. 
Continue Reading “Winners” and “losers” in alleged Ponzi schemes: Court approves bankruptcy trustee’s settlement with parties who did not lose money