Securities regulator fails to collect majority of fines
New Brunswick Securities Commission collected $510,000 of $2.9M in fines
The New Brunswick Securities Commission has one of the worst records in Canada for collecting fines, according to statistics compiled by CBC News.
The New Brunswick Securities Commission went after $2.9 million in fines and money investors lost between 2007 and 2011, mainly from people who had sold investments illegally.
Despite press releases from the commission bragging about big fines, it has collected only $510,000 or 17 per cent of that money.
Ermanno Pascutto, the executive director of the Canadian Foundation for Advancement of Investor Rights, said the public normally believes when an agency announces a fine that it is actually collected from the agency.
"Everyone assumes, particularly when nothing more is said, that that money has been collected, or will be collected, but in most cases it's not been collected."
The New Brunswick Securities Commission refused CBC's request for an interview about its poor track record in collecting fines.
But Justice Minister Marie-Claude Blais said collecting fines is hard because the companies are often outside the province or the country.
She said the actual collection of fines is less important than recouping the money New Brunswickers’ invest.
"Government has always found it very important that those victims are first and foremost considered, and that we have services for these victims," Blais said.
The province’s financial regulator appears to be doing better getting investors' money back, according to its statistics.
Of the $193,000 ordered returned, $93,000 has been collected and the rest is coming in through a payment plan.
N.B. below the national average
CBC News found that only 35.7 per cent of the penalties owed for violating securities laws across the country since 2007 were actually collected by the commissions. The data was collected from the different provincial regulators.
Of the $444 million in penalties levied by Canadian regulators, $285 million has not been paid, according to the analysis.
The collection rates vary widely from province to province, and those lower than the national rate (35.7 per cent) include:
- New Brunswick at 17.3 per cent.
- Saskatchewan at 22 per cent.
- Manitoba at 24.2 per cent.
- Nova Scotia at 29.2 per cent
- Ontario at 31.2 per cent.
Alberta, however, was above the national collection rate at 51.6 per cent.
The Canadian Securities Administrators, an umbrella organization that represents provincial regulators, issued a statement to CBC News.
"Regulators make every reasonable effort to collect monetary penalties, including using the services of collection agencies and registering judgments against assets," Bill Rice, the association's chairman, said in the statement.
"Recovery is often limited as a significant number of cases involve serious fraud where there is little or no likelihood of ever collecting the money," he added.
The Canadian Foundation for Advancement of Investor Rights, meanwhile, is arguing there is a way to help collect more fines.
Pascutto said a national securities regulator in Canada could help with enforcement and collections.