Canada called soft on corporate crime

…many provinces don't have enough money to hire staff to crack down on violations and are ""pretending to oversee"" securities regulation. Lamoureux also spoke about the need to pool the country's resources to fight breaches of securities law.

The Toronto Star
September 12, 2007

Canada called soft on corporate crime
Retiring Teachers’ CEO slams lack of oversight, shortage of prosecutions
Laura Bobak

Canada is "missing the boat" because many white-collar criminals aren't held accountable, says Claude Lamoureux, the outgoing chief executive officer of the Ontario Teachers' Pension Plan.

"In Canada, white-collar crime is treated lightly by our legislators and our courts," Lamoureux said at a conference of the Canadian Institute of Chartered Accountants yesterday.

"We have had our share of scandals. They occur regularly. We tolerate insider trading by not investigating cases when they occur, by not prosecuting them, or worse, by asking for a level of proof in court that is next to impossible to achieve."

Lamoureux pointed to a recent published report that stated more than 1,200 corporate executives have been convicted in the United States by the multi-agency U.S. Fraud Task Force over the past five years.

In contrast, he said, only one high-profile case has been successfully prosecuted in Canada by the Royal Canadian Mounted Police's white-collar crime unit, known as IMETS. That case involved British Columbia fraudster Michael Mitton.

"The investing public is right to ask, when will we see action?"

Part of the problem in Canada, Lamoureux said, is that an auditor is too close to the company he or she investigates.

He also said many provinces don't have enough money to hire staff to crack down on violations and are "pretending to oversee" securities regulation.

Lamoureux also spoke about the need to pool the country's resources to fight breaches of securities law.

Some say the current system of multiple agencies across the country is good because it creates competition.

In Lamoureux's view, however, the level of enforcement is sinking.

Meanwhile, the level of concern among investors is increasing, he said. He pointed out that a 2006 Task Force to Modernize Securities Legislation in Canada got more comments on the issue of enforcement than on any others.

Lamoureux also called for greater transparency in financial reporting by public bodies, including governments and hospitals, many of which he said do not appear to report liabilities of maintaining social programs and depreciation of assets such as crumbling public infrastructure or medical equipment.

"We have seen the results in an overpass that collapsed in Quebec, and there are many more across Canada that are under threat," he said.

Lamoureux steps down from his job at Teachers' in December.


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