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(June 23, 2003) Convicted fraud artists and money launderers could face stiffer sentences under proposed new federal legislation, according to an expert in white-collar crime. Recently announced amendments to the Criminal Code allow judges to beef up jail time in market-related cases that result in significant economic damage, says Chris Mathers, vice-president of KPMG Forensics and a former RCMP fraud investigator.
Mathers spoke this past weekend at the IDA’s first annual Private Client event in St. Andrew’s, New Brunswick, held in conjunction with the brokerage industry association’s yearly conference.
“The new law says that if you do a really bad thing, they can add more time on,” Mathers said. “For example in the [YBM Magnex International Inc.] case, where innocent investors lost fortunes, that’s significant economic damage and you will get extra time for that. That was what was needed in the Criminal Code because people were operating with virtual impunity.”
Cases that impact investor confidence and market stability would also qualify for tougher sentencing, Mathers added.
The legislation increases maximum jail sentences across the board for market-related crimes, such as fraud (14 years), insider trading (10 years) and market manipulation (10 years).
As well, whistle-blowers would be protected and police would be permitted to use wiretaps in their investigations. Ottawa is also creating a handful of integrated market enforcement teams, comprised of police, regulators and lawyers, to investigate suspected market fraud cases.
Advisors can protect themselves from money launderers by following strict “Know Your Client” (KYC) guidelines, Mathers suggests.
“KYC is the absolutely main tenet of financial dealing today because of the intrusion of international terrorist and criminal groups in the public markets. This is the thing that keeps you from becoming the unwitting accomplice of a criminal.”
Mathers says advisors should be constantly on guard, ask lots of questions and trust their instincts. “When you get a bad feeling about a client or employee, listen to that little voice that tells you something is wrong and pursue it.”
Knowledge can also be a powerful crime-fighting weapon, Mathers said, noting that crooks who perpetrate money laundering and fraud crimes are having a tougher time, “because we’re all smarter and we’re all learning about this. We can’t eliminate it, but we can make it more difficult.”
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Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca
(06/23/03)
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(June 23, 2003) Convicted fraud artists and money launderers could face stiffer sentences under proposed new federal legislation, according to an expert in white-collar crime. Recently announced amendments to the Criminal Code allow judges to beef up jail time in market-related cases that result in significant economic damage, says Chris Mathers, vice-president of KPMG Forensics and a former RCMP fraud investigator.
Mathers spoke this past weekend at the IDA’s first annual Private Client event in St. Andrew’s, New Brunswick, held in conjunction with the brokerage industry association’s yearly conference.
“The new law says that if you do a really bad thing, they can add more time on,” Mathers said. “For example in the [YBM Magnex International Inc.] case, where innocent investors lost fortunes, that’s significant economic damage and you will get extra time for that. That was what was needed in the Criminal Code because people were operating with virtual impunity.”
Cases that impact investor confidence and market stability would also qualify for tougher sentencing, Mathers added.
The legislation increases maximum jail sentences across the board for market-related crimes, such as fraud (14 years), insider trading (10 years) and market manipulation (10 years).
As well, whistle-blowers would be protected and police would be permitted to use wiretaps in their investigations. Ottawa is also creating a handful of integrated market enforcement teams, comprised of police, regulators and lawyers, to investigate suspected market fraud cases.
Advisors can protect themselves from money launderers by following strict “Know Your Client” (KYC) guidelines, Mathers suggests.
“KYC is the absolutely main tenet of financial dealing today because of the intrusion of international terrorist and criminal groups in the public markets. This is the thing that keeps you from becoming the unwitting accomplice of a criminal.”
Mathers says advisors should be constantly on guard, ask lots of questions and trust their instincts. “When you get a bad feeling about a client or employee, listen to that little voice that tells you something is wrong and pursue it.”
Knowledge can also be a powerful crime-fighting weapon, Mathers said, noting that crooks who perpetrate money laundering and fraud crimes are having a tougher time, “because we’re all smarter and we’re all learning about this. We can’t eliminate it, but we can make it more difficult.”
• • •
Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca
(06/23/03)
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