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COHEN All for one and one for all T he issue of securities regulation and enforcement has been big news in Canada over the last few months. It appears that the debate over wheth- er this country needs a single securities regulator will never be resolved. Federal Finance Minister Jim Flaherty has once again stated he's putting together a panel to draft legislation for a national securities regulator. The panel was sched- uled to meet before the end of 2007, but by press time no moves had been made. While Flaherty is pushing for a single regulator, Quebec, most vocally, and a num- ber of other provinces say they are opposed. "A common securities regulator does not mean an Ontario or Toronto- oriented regulatory body," Flaherty told the Senate standing committee on banking, trade and commerce last month. "That is what we have now . . . . We have an Ontario-dominated securities regulatory system. For those in favour of an Ontario-dominated system, they should permit the current system to remain. For those who want a distribution of powers, they should support a common securities regulator in Canada." The debate rages on and, as former Ontario Securities Commission chairman Jim Baillie suggests in our cover story this month, Canada will still look like a bunch of Keystone Cops on the international enforcement scene with its slew of provincial regulators instead of one voice for the country. But even if Canada never achieved national securities regulatory unity, the many parts of it that now do exist have to do better at arresting corporate crime. Again, our international reputation depends on it. As one recent newspaper arti- cle about lax enforcement noted, Canada is not just considered an "enforcement- free zone" where people get away with white-collar crime, but a place where they can profit dearly from such crimes. That's not a reputation conducive to building a strong economy. There has been a lot of chin wagging about the differences between Canadian and U.S. treatment of such crimes and it is true that in many ways the patchwork, some might even say haphazard, system in this country is to blame. But there is more to it than that. As the cover story notes, there is a bit of a cozy relation- ship between the OSC, in particular, and the lawyers who both prosecute regula- tory matters and represent or work for the companies and/or directors involved in many of these cases. On the criminal end of it, there are problems with the Integrated Market Enforcement Teams set up to investigate criminal activities on the markets. A report on IMETs from Nick LePan made public last month points to all sorts of problems, including a lack of prosecutors well versed in securities law. Not to mention that with 13 different regulators across the country, timeli- ness goes out the window in cases that may involve federal prosecutors and one or more provincial Crowns. Fighting fraud is not a high priority either within the RCMP or the Public Pros- ecution Service of Canada, says LePan, and that has to change. No one is com- plaining about lack of resources; IMET and the OSC have enough to do what they need to, but the lack of co-ordination, complicated multi-jurisdictional regulatory system, and cozy relationships among securities lawyers are making a bit of a mockery of the securities enforcement system in this country. A single regulator would help for sure. But timeliness and co-operation leading to some real results could also go a long way to comforting investors, particularly those who in some cases have been waiting decades for the resolution of cases in which they've been bilked of their hard-earned money. www. C ANADIAN Law ye rmag.com JANU AR Y 2008 3