Canadian Lawyer InHouse

53 CANADIANLAWYERMAG.COM/INHOUSE SEPTEMBER 2016 in each case there were fi nancial penalties agreed to by the companies under investiga- tion. No individuals were sanctioned. The largest settlement was a $164-mil- lion agreement between the OSC and CI Investments Inc. earlier this year. The com- pany admitted that $156 million in interest in certain investment funds had not been marked as an asset for nearly fi ve years. CI self-reported to the regulator, and the settlement stated that it was a fund control and supervision error with no dishonesty or intentional misconduct by the company. CI agreed to fully compensate its investors and make a voluntary payment of $8 million to the OSC as well as $50,000 to cover its in- vestigation costs. The Investment Industry Regulatory Organization of Canada also issued new sanction guidelines last year. The guidelines require "proactive and exceptional assistance" to receive credit for co-operation at the time a penalty is imposed. The goals of these regulators and some of the language used is similar to that of the Yates Memo, observes Fabello. Still, he be- lieves there are mutual interests in reaching an agreement with a regulator. "They don't want contested hearings. They want to en- courage settlements," he says. "Settlements give you fi nality and you move on," says Jason. At the same time, it is often diffi cult for regulators to prove in- tentional wrongdoing, he suggests, so that is their incentive to reach a deal. All of the lawyers agree that seeking to reach a settlement is very fact specifi c and is unlikely to apply when there has been a clear "bad actor" and evidence of intentional misconduct. In those types of cases, there are additional complexities for corporations in their dealings with a regulator, says Wright. "Lots of times, companies will want to offer them up, although it depends on the seniority of the employee," she states. "If it is someone who is more senior, then there are more diffi culties and the potential for corporate culpability." If an internal investigation uncovers in- tentional wrongdoing, then co-operation with a regulator may still be the best course of action, says Gardner. "If the actions are clearly improper, the company is not offer- ing up a scapegoat," he states. "In these types of circumstances, the company's name is going to get out there anyway," Gardner observes, adding that the reputation of a corporation will not be im- proved by minimizing internal wrongdoing. Along with the requirement for an Upjohn warning to advise an employee under investigation that corporate counsel's client is the company and not the individual, Gardner says other measures may be appropriate in an internal investigation. "We may agree to let them have their lawyer there. Sometimes, we prefer that," says Gardner. An employee is required to co- operate during an internal investigation or be terminated, but having counsel present could make the interview more effective for the company as well, he explains. Generally, co-operation is the best course of action when there is evidence of misconduct, either through inadvertence or intentionally, says Gardner. "The question is how you get there." IH I n d u s t r y S p o t l i g h t Because business issues are legal issues. So if you want to get ahead in business, get the degree that gets you there faster. ONE YEAR – PART - TIME – NO THESIS FOR L AWYERS AND NON - LAWYERS law.utoronto.ca/ExecutiveLLM GPLLM Global Professional Master of Laws [Get a Master of Laws] Untitled-3 1 2015-03-02 9:02 AM

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