In a February 19th Globe and Mail it was reported that the Ontario Securities Commission released a report on insider trading. The OSC report looked at the filings by 1,500 insiders at 100 companies of various sizes whose principal regulator is in Ontario. The Globe and Mail’s Janet McFarland revealed some interesting findings from the report including:
1) Some insiders had never filed any insider reports
2) 200 insiders at 70 of the companies had made material errors in their insider reports
3) At 30% of the companies, at least one insider had not even created an insider profile on SEDI and had never filed any insider-trading reports
If we look back to another Globe and Mail article by Jeff Gray published on January 18th we find a rather interesting scenario. Upon review of the OSC report Jeff Gray concluded that since 2005 the OSC has demanded nearly $230 million in sanctions and costs. He says that to date close to half of that total amount has been collected. The really interesting part of the article says that for securities violators prosecuted in contested hearings, the OSC has won $73.36 million in fines but only collected a paltry $690,000 or 0.94 percent of that amount.
Jeff Gray goes on to quote Tom Atkinson, the OSC’s director of enforcement as saying;
“If we have some sort of name-and-shame list, people may know some of these people, may know where they have assets, and may point them [out] to us…. I think we should be doing everything we can to collect this money, and this is one more step.”
If this is the kind of thinking that is spinning inside the OSC they will continue to collect only 0.94 percent of such fines. As for the list idea, it is one of the most preposterous suggestions this year. Surely the OSC has more wisdom than that on board.
Listen up Tom, why are you playing around making fools of yourselves? If you want to solve your collection issue, stop making excuses and simply create a new policy that will take care of the issue. We know the OSC excels at creating new policies.
Tom, your new policy will read that until one’s outstanding fines and levies must be paid within 15 of days of being issued or the recipient can no longer be involved with any public entity in any capacity what-so-ever, until they are. The same will hold true for any future recipient of fines and levies. From the day each and every new fine or levy is handed down the recipient of the fine or levy is barred from participating in any way or form in the business dealings of any public entity until the fine or levy is paid in full.
The same will hold true Tom for Insider Reports. Every single person in your survey, and in the future, who has not set up their profile on SEDI and maintained a current and accurate file is provided 5 days’ notice that they no longer qualify for a Board or Management role until their Insider Filings are brought up to date and all late filing fees paid in full. After the 5 days any public entity they are associated with will be cease traded until their employee, consultant or insider has fulfilled their responsibilities. The clean insider filing confirmation will have to be certified as up to date by a lawyer and the Board of any company they are associate with and submitted to the OSC for that individuals name to be cleared to presume business as usual.
Yes Tom, once the millions of dollars begin to role in we will be looking for an appropriate consulting fee.
Pleased to be of assistance.