IDA calls for new RCMP unit to police markets

(November 21, 2002) The federal government should set up a new RCMP unit to deal specifically with crimes related to the capital markets, says Investment Dealers Association president Joe Oliver. In a presentation today to the Senate Standing Committee on Banking, Trade and Commerce, Oliver also called for the creation of a special court for white-collar crime.

The IDA’s proposed Integrated Capital Markets Unit could be delegated enforcement powers similar to the current Integrated Proceeds of Crime Unit, Oliver said. “That unit employs an integrated approach to policing and demonstrates that individuals with a mix of the necessary expertise and knowledge can deal with large, complex investigations.

“An integrated unit could be responsible for the capital markets, combining federal and provincial policing and regulatory resources and expertise to root out market malfeasance,” he added.

Oliver believes that although current criminal provisions related to market manipulation are sufficient, enforcement must be “responsive and timely.”

Mandating the RCMP to police markets is not a new idea, Oliver said. Since 1966, the force has had the power to investigate capital markets. But he said that due to fiscal pressures, staffing issues and a lack of support at the judicial level, the RCMP’s efforts in this area have had limited effect. “The result is that investigations take years when they could be resolved more quickly.”

Oliver said the new unit would require “dedicated funding” from Ottawa to succeed, but he pledged assistance from the IDA in providing resources.

But police forces do not work in isolation, Oliver said, and need support at the court level. “Capital markets investigations are often lengthy, require considerable knowledge of the subject area and are tedious to prosecute,” he said. “We need special courts that can deal with complex, white-collar crime.”

The public perception, Oliver said, is that crimes related to the markets are not viewed as serious matters by the court system. “Specialized courts may be one means of showing the public that these matters can and will be dealt with seriously.”

Beefed-up enforcement has been a hot topic in the wake of accounting scandals in the U.S. Last month, the Ontario government introduced new legislation giving the Ontario Securities Commission the power to levy administrative fines and order offenders to disgorge profits. The legislation also increases fines and jail sentences for securities offenders.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca