Montréal - The Autorité des marchés financiers (the AMF) today reported on its enforcement of the laws governing the Québec financial industry in 2011. A total of 1,201 individuals were sanctioned for various offences of the laws administered by the AMF in 2011, and slightly more than $5.6 million in fines, penalties and sanctions was imposed further to AMF intervention.
Illegal distributions were the most common type of offence prosecuted in 2011 in Québec, with 29 suits brought against 76 individuals and companies, 21 concluded cases involving 37 individuals and companies, and 12 freeze and cease trade orders issued against 70 individuals and companies carrying out suspicious distribution activities.
"Illegal distributions and practices are key areas of focus for the AMF and account for much of our investigations and litigations, and our consumer education and assistance programs," explained Nathalie Drouin, Executive Director, AMF Enforcement and Legal Affairs. "It is important that we continue to suppress fraud by seeking harsh dissuasive sanctions, and further our efforts to educate consumers so they can better protect themselves against fraud."
AMF investigation and litigation teams were also assigned cases of market manipulation, in particular in the matters of Wanderport Corp. and Neuro-Biotech inc., and illegal insider trading, such as cases related to Consolidated Thompson and MEGA Brands. They also faced a growing number of contested hearings: In 2011, the AMF was involved in 35 appeals brought before various Québec courts.
The AMF obtained a total of 15 orders against 89 individuals and companies to cease securities activities and to freeze assets. "This essential power, which enables the AMF to protect investors against potential losses during an investigation, was broadened in December 2011 with the passage into law of An Act to amend various legislative provisions mainly concerning the financial sector This link will open in a new window. The AMF will now be able to request suspension and cancellation of registration, cease trade orders and any other remedial measure for violations under An Act respecting the distribution of financial products and services. This is a significant consumer protection measure," concluded Me Drouin.
2011 Enforcement Highlights
Here are some AMF enforcement figures for 2011:
Charges laid by the AMF in 2011
A total of 1,999 charges:
- 1,990 charges for violations under the Securities Act;
- 8 charges for violations under An Act respecting the distribution of financial products and services ("Distribution Act");
- One charge for violation under An Act respecting insurance This link will open in a new window.
Individuals and companies sanctioned in 2011
A total of 1,201 individuals and companies:
- 52 individuals and 35 companies sanctioned following decisions by the Québec review board ("Bureau") or a penal court for violations under the Securities Act;
- 167 individuals and companies sanctioned for late filing of insider trading reports or failure to do so;
- 8 individuals and companies sanctioned in penal court for violations under the Distribution Act;
- 29 companies sanctioned for violations under sections 115 and 117 of the Distribution Act;
- 945 individuals and companies sanctioned or named in decisions related to registration and the right to practise under the Distribution Act. Of these decisions, 679 suspended certificates for non-payment of dues to the Chambre de la sécurité financière.
Fines, penalties and sanctions in 2011
A total of $5,628,087:
- $4,482,166 in fines imposed for failures or violations under the Securities Act;
- $190,300 in administrative penalties imposed by the Bureau;
- $242,321 in administrative penalties imposed by the AMF;
- $502,300 in fines imposed for late filing of insider trading reports or failure to do so;
- $133,500 in fines for violations under the Distribution Act;
- $67,500 in administrative penalties imposed on individuals or companies for failures or violations under the Distribution Act;
- $10,000 in fines for violations under the Securities Act.
Again this year, decisions handed down in Québec for violations of securities laws accounted for one-third of all securities-related decisions in Canada. Just over 70% of decisions rendered by judicial tribunals under Canadian securities legislation in 2011 were handed down in Québec.
Proceedings launched in Québec for securities violations also accounted for one-third of all securities-related proceedings launched in Canada.
- 633 charges are brought against seven individuals and fines totalling $10,848,000 sought related to the matter of Gestion 2007 inc. and Gestion International 2007 inc. Rock-Robert Bilodeau alone faces 434 charges, fines of $8,335,000 and a prison term.
- The AMF intervenes to halt a possible Ponzi scheme related to the activities of Alain Péloquin.
- The parties in the various Norbourg class actions announce that they have reached a final agreement confirming the settlement and payment of $55 million to defrauded investors.
- Normand Bouchard, who solicited his victims through classified ads, is fined $310,000 for illegal distributions.
- The AMF announces that 28 investors defrauded in the matter of Carole Morinville will receive compensation estimated at $1,600,000.
- The AMF launches proceedings for alleged illegal insider trading against various officers of MEGA Brands inc. before the Bureau and claims $6,490,375.
- Seven individuals accused in the matter of Flamingo are fined $1,238,000 for violations in connection with illegal distributions of investment products.
- The AMF thwarts a marketing scam involving fraudulent e-mails sent from Laval and Rimouski.
- Pierre Jolicoeur is arrested by the financial market crime unit of the Sûreté du Québec. He had been under cease trade and freeze orders since August 2010.
- The AMF files 133 charges and seeks $1,305,000 in fines and a prison term for Richard Longpré, a former representative in insurance of persons, group insurance of persons and group savings plan brokerage (mutual funds).
- The AMF steps in to prohibit trading in the securities of Wanderport Corp. and Neuro-Biotech inc. due to alleged market manipulation.
- The AMF files penal proceedings containing 258 charges in connection with the activities of Fer de Lance Foundation and seeks $3,741,000 in fines and prison terms.
- The AMF quickly intervenes to stop the activities of Daniel L'Heureux, 9248-8543 Québec Inc. and Nosfinances.com to ensure the protection of investors' rights.
- The AMF conducts a search and seeks a cease trade order from the Bureau regarding the activities of Jérôme Hallé. The Crown also files criminal charges in 2011.
- Yvan Guyon is fined $40,000, eight times the minimum fine set out in the Securities Act for market manipulation, even though Mr. Guyon lost a significant amount in the venture.
- New cease trade and freeze orders are issued for alleged market manipulation involving Wanderport Corp. and Neuro-Biotech inc.
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Sylvain Théberge: 514-940-2176
Québec City: 418-525-0337