Lexpert Magazine

6 www.lexpert.ca Feature "Why do you need compliance programs? Because if you are offside, you're at risk of class actions that are hooking onto the statutory infractions." "The bigger concern I see for corporations is the risk that information about potential internal wrongdoing gets reported to the regulator first, rather than internally." Kenneth Jull GARDINER ROBERTS LLP Linda Fuerst NORTON ROSE FULBRIGHT LLP and Livent — and in other contexts, such as competition law. ere's been only one case in Canadian history when authorities used the Criminal Code provisions for insider trading, he says. "Almost every other case of insider trading is dealt with either as a regulatory offence or preceded by way of administrative monetary penalties." In the United States, individuals get jailed for insider trading. Although it's easy to see why prosecutors in Canada prefer administrative monetary penalties, says Jull — it's easier to prove culpability on a balance of probabilities rather than beyond a reason- able doubt, and in front of a tribunal rather than a court — "that's one thing I've seen that's becoming more and more prevalent, and that worries me a bit in the sense that we're seeing less use of the criminal law." Canadian regulators and authorities don't put as much dedicated resources into investigating and prosecuting white-collar matters as they should, agrees Lawrence Ritchie, a litigation partner in Osler, Hoskin & Harcourt LLP in Toronto. is approach contrasts to the United States, he says. "Part of this is political accountability or a lack of it." According to Ritchie, Canada has a very diffused regulatory and law enforcement structure because expertise is spread among the various provinces and the federal govern- ment. He has advocated for a national and collaborative enforcement approach across the country. Bribery and price-fixing Ritchie says that pandemic-related delays in the supply chain can create incentives for wrongdoing and corruption as people try to jump the queue and bribe foreign officials. On the other hand, since a lot of bribery is done face-to-face, with cash in envelopes and meetings over boozy lunches, this may decrease the chances for corruption, with "fewer access points for people to be doing things they shouldn't," says Jull. He adds that the restricted personal contact also means fewer opportunities for comparing pricing, which can lead to price-fixing. "It's easier over dinner, with drinks, to say, 'so, what are you doing with pricing this year?'" but harder on a Zoom call. Cybersecurity A recent StatsCan publication indicates that in a survey on cybersecurity at the beginning of the pandemic, about 42 per cent of Canadians had experienced a secu- rity violation, says Linda Fuerst, a senior partner in Norton Rose Fulbright LLP in Toronto. However, only five per cent had reported the incident to an authority such as the police or the Canadian Anti-Fraud Centre. "Lots of money has been lost due to COVID-related fraud alone," she says, including through ransomware attacks. Fuerst has also seen increasing requests by police authorities for assistance by corporate clients in investigating potential breaches or threats that the police authorities have become aware of independently. Whistleblowing programs An increase in whistleblower programs in Canada has seen some success to date, Fuerst adds. e Ontario Securities Commission has to date awarded over $8.6 million to whistleblowers for tips relating to serious breaches of securities law, she says. One recent and publicized example is when the RCMP and the OSC cooperated and laid charges against the cannabis company CannTrust Holdings. Joven Narwal of Narwal Litigation in Vancouver has "deep concerns" about whis- tleblowing programs, which he believes are ineffective "in the war on money laundering."

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