Aug 26, 2015
Yamri Taddese, Legal Feeds, Canadian Lawyer
This week, a panel at the Ontario Securities Commission ordered former Davies Ward Phillips and Vineberg LLP lawyer Mitchell Finkelstein to pay $450,000 in administrative penalties and $125,000 in costs of the proceeding after he was found guilty of insider tipping on three different occasions.
Finkelstein also received a 10-year-ban from trading and acquiring securities, with the exception of doing so for select registered accounts.
“There seems to be a general trend at the OSC and other securities regulators to order greater [amount] of administrative penalties and cost awards particularly in the last five years,” says Osler, Hoskin & Harcourt LLP partner Shawn Irving.
Securities regulators are “certainly of the view that the imposition of administrative penalties and significant cost awards can serve an important deterrent role,” Irving says, but “I’m not convinced of that.”
An approach that focuses on getting securities offenders off the streets sooner is a better approach, Irving adds.
“In so many of these cases, years and years and years pass between when the alleged breach is alleged to have occurred and when there’s ultimately a hearing and then a decision,” he continues. “All the while, the alleged offenders are able to continue to act.”
Irving adds the impact of prompt prosecution on the personal and professional reputation of transgressors, coupled with strong market prohibitions, can have a far greater deterrence effect than steep fines.
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