Canadian Lawyer

June 2022

The most widely read magazine for Canadian lawyers

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40 FEATURE DEPARTMENT PROFILE THE INVESTMENT Industry Regulatory Organization of Canada sets and enforces rules regarding the proficiency, business, and finan- cial conduct of approximately 174 Canadian investment firms and more than 31,000 regis- tered individuals. The enforcement department at IIROC prosecutes investment dealers and investment advisors who run afoul of their regulatory obligations. They are responsible for assessing evidence, making recommendations for charges against respondents, conducting hear- ings, negotiating settlements, and facilitating the efficient resolution of regulatory proceed- ings. Where they establish evidence of regula- tory misconduct, they will initiate disciplinary proceedings, which can result in fines, suspen- sions, and permanent bans or termination for both individuals and firms. "We work collaboratively with the investigators to make sure our investigations are targeted and focused, and then we do hearings and reviews if the IIROC proceedings are reviewed before the commission," says Sylvia Samuel, senior enforcement counsel at IIROC. Samuel is part of a team of seven Toronto-based lawyers in the enforcement department at IIROC, working alongside other lawyers in IIROC's Montreal, Vancouver, and Calgary offices. "I play a leading role in determining the litigation strategy, from assessing evidence to identifying risk and keeping in mind the policy considerations that are involved in being a regulator," says Samuel. Working in a virtual environment during the pandemic was challenging, but Samuel says the enforcement team transitioned smoothly to virtual hearings in an effective, timely, and fair way. However, some external parties were less willing to adapt. "Dealing with counsel or other parties that weren't keen on adopting the video technology for a hearing was probably the greatest chal- lenge," she says. However, virtual hearings offer many advantages, including easily encom- passing parties from different jurisdictions, so Samuel thinks they are here to stay. "You can't unlearn those things," she says. "I don't think all hearings will be done virtually, but they are good to have as a viable option, so I expect they will continue post-pandemic." The enforcement department maintains a collaborative approach that is key to the organization's culture, which influences how enforcement counsel works with investigators and other IIROC departments. Samuel and her colleagues sometimes work with other departments on interpretation or policy issues. While the enforcement team carefully monitors regular issues such as market manip- ulation, the virtual environment has given rise to even more opportunities for wrongdoing, so that is top of mind this year. They also occasionally have to deal with unrepresented parties, which can pose challenges. "As a regulator, we're always balancing the public interest concerns that may not necessarily be of significance in a private practice setting," says Samuel, who joined IIROC two years ago. She brought a wealth of litigation experience to the role, having IIROC enforcement team favours a collaborative approach to support targeted investigations into regulatory misconduct Determining the litigation strategy IIROC's 2021–22 compliance priorities report, Helping Firms with Compliance, highlights various policy initiatives and strategies: streamlined existing IIROC dealer member rules and completed the implementation of the plain- language rulebook published final amendments to the IIROC rules required under the client-focused reforms established the compliance modernization group to streamline processes across compliance teams and to create efficiencies for both IIROC and IIROC-regulated firms issued exemptive relief and guidance where necessary in response to the COVID-19 pandemic, such as client document approvals andtimelines for reporting obligations COMPLIANCE PRIORITIES AT IIROC previously worked in commercial litigation and solo practice. IIROC currently has no authority through enforcement to compensate clients who have suffered financial losses, so Samuel is part of a working group considering how to better support investors. The group is exploring new ways to try to return disgorged funds.

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