The federal government’s Budget [PDF] 2024, released on April 16, 2024, contains a number of initiatives and legislative reforms aimed at combatting financial crime in Canada, including terrorist financing, corruption, sanctions evasion, tax evasion, money laundering, and fraud. The Budget promises changes to Canada’s anti-money laundering and anti-terrorist-financing (AML/ATF), criminal, and tax regimes to create additional powers, efficiencies and incentives relating to compliance and enforcement, as well as the creation of new specialized units specifically tasked with complex financial cr ..read more

On April 5, 2024, the U.S. Securities and Exchange Commission (SEC) succeeded in its much-watched civil action against Matthew Panuwat, a former business development executive at Medivation Inc., a midcap biopharmaceutical company. The SEC’s complaint [PDF] raised a novel theory of insider trading known as “shadow trading”. Shadow trading involves the use of material non-public information (MNPI) about a reporting issuer to profit from trading the shares of a different, but “economically linked,” company. This case was unique in that the defendant was found liable for using information obtain ..read more

For years, Canada’s business and legal communities have sought more meaningful public guidance from Global Affairs Canada (GAC) on its interpretation of Canada’s sanctions. Demands for this guidance have grown since the major expansion of Canada’s Russia-related sanctions in response to Russia’s 2022 invasion of Ukraine, as we have noted in several prior posts (e.g., our posts illustrating the expansion of scope to the restricted lists of goods and technologies, as well as designated persons). This past month, GAC, which administers Canada’s economic sanctions quietly updated its “Frequently ..read more

Since the integration of Canada’s two capital markets self-regulatory organizations (SROs) — the Mutual Fund Dealers Association (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) — in January 2023, market observers, investors and SRO members have been waiting for the Canadian Investment Regulatory Organization (CIRO) to release its proposal as to how SRO rules would be consolidated. Earlier this year, CIRO published a consultation paper regarding policy options for leveling the advisor compensation playing field. The consultation paper proposes potential amendments ..read more

On February 21, 2024, LexisNexis Risk Solutions published its True Cost of Financial Crime Compliance Study, reporting on the results of a global online survey to evaluate the cost, current state, and challenges presented by financial crime compliance operations amongst financial institutions. From May to June 2023, the survey sought input from 1,181 senior decision-makers at financial institutions, with 160 participants from the U.S. and Canada. The study revealed that financial crime compliance costs have increased 99% for both Canadian and U.S. financial institutions, with industry costs s ..read more

On January 26, 2024, Ontario’s Capital Markets Tribunal (the Tribunal) approved a settlement [PDF] in the matter of Nicholas Agar and Paul Ungerman (the respondents), representing the first time the Ontario Securities Commission (OSC) has settled allegations relating to the promotion and sale of cryptocurrency tokens. Although the Tribunal was clear that it was not adjudicating whether a cryptocurrency token constitutes a security, this matter highlights the OSC’s commitment to enforcing the Securities Act (the Act) in respect of cryptocurrency assets, notwithstanding that the status of such ..read more

The ability to seek scrutiny of a regulators’ investigation and discretionary decisions, while the investigation remains ongoing, has always been limited under various provincial securities statutes in Canada. Determining the appropriate procedural offramp for a sober ‘second thought’ on these decisions is often an illusive and unfulfilling exercise and, in such cases, individuals who are not party to an investigation can often be caught in its crosshairs with little means to challenge these decisions. The 2023 case of Brar v. British Columbia (Securities Commission), 2023 BCCA 432, has deter ..read more

On September 22, 2023, the majority of the amendments to the Québec privacy legislation introduced in the Act to modernize legislative provisions as regards the protection of personal information (Law 25, previously Bill 64) came into force. These include several new enforcement powers given to the Québec Commission d’accès à l’information (the Commission). This blog outlines the Commission’s new powers of investigation, as well as the potential fines and penalties for violations of the Act respecting the protection of personal information in the private sector&n ..read more

On November 22, 2023, the final regulations to the Retail Payment Activities Act (RPAA) were released. Changes from the draft regulations released earlier this year are minimal, and payment service providers (PSPs) should begin to prepare for the significant compliance requirements once the regime comes fully into force. The window for PSPs to submit applications to the Bank of Canada opens on November 1, 2024. PSPs applying for registration after the window closes on November 16, 2024, will be unable to perform their retail payment activities for at least two months during the pendency of th ..read more

On November 9, 2023, Transparency International Canada (TI) released a white paper [PDF] titled, “Bringing a “Failure to Prevent” Offence to Canada”. The paper highlights Canada’s poor record for enforcement and key shortcomings of the current anti-bribery and corruption regime. In its conclusion, the paper recommends Canada adopt a “failure to prevent” corruption offence as part of its efforts to counter corruption. The TI report follows similar comments in the Organization for Economic Co-operation and Development’s (OECD) Phase 4 report [PDF] released October 19, 2023, regarding Canada’s p ..read more