British Columbia has problems collecting fines from fraudsters, Finance Minister urges changes

Maria Nikolova

From fiscal 2007/08 to 2016/17, the British Columbia Securities Commission collected less than 2% of the $510 million in fines it had issued, according to an investigation by Postmedia.

Canada is known for the measures it has recently taken against various forms of online trading scams, including the introduction of a ban on binary options.

It appears, however, that the implementation of penalties against fraudsters presents a serious issue for regulators in certain Canadian provinces, such as British Columbia, as a recent investigation by Postmedia shows a very low rate of collection of fines. From fiscal 2007/08 to 2016/17, the British Columbia Securities Commission (BCSC) collected less than 2% of the $510 million in fines it had issued, according to the investigation. More than 80 fraudsters who have caused damage to thousands of investors (not only in British Columbia) have managed to escape paying the penalties issued by the Commission.

The Vancouver Sun reports that the Finance Minister Carole James has reacted to the data by urging changes to the process of fines collection. She said she had instructed the Commission to look at tools and options to improve collection and get back to her soon.

In an email, quoted by the newspaper, the Commission media relations advisor Alison Walker said: “We are looking forward to working collaboratively with the Ministry of Finance on possible new mechanisms to bolster our current efforts.”

Penalties are issued for fraudulent activities such as Ponzi schemes, and pump-and-dump scams where share prices are raised artificially and then sold off. Experts are concerned that if these fines are not collected, this can result in a situation of impunity, which encourages even more violations. FAIR Canada’s Marian Passmore, Director of Policy and COO, says that “it is sort of an unsexy part of the job to actually try and enforce an order and recover (fines). But it’s clearly something that needs greater focus.”

The Commission has acknowledged the poor collection rate, but says this forms part of fraudulent activity. The fraudsters make collection difficult because they have usually spent or hidden the money, or fled.

British Columbia’s collection rate compares unfavorably to that of the Ontario Securities Commission (18%|, Alberta Securities Commission (18%) and Quebec’s (20%) in the past four years. The United States Securities and Exchange Commission’s collection rate is approximately 60% on $18.9 billion in the last five years.

Imposing and collecting penalties from those that do not comply with the law is a tricky matter outside of Canada too. As FinanceFeeds reported early this month, Scottish Limited Partnerships (SLPs) which often front for fraudulent binary options firms, have escaped the fines for not complying with new transparency rules that require them to disclose details about their beneficiary owners. According to Conservative MP Margot James, no Scottish Limited Partnerships have been fined since the People with Significant Control (PSC) register came into force.

Read this next

Digital Assets shuts down its US institutional exchange has announced plans to discontinue its institutional exchange service for professional customers in the United States as soon as June 21.

Retail FX

ThinkMarkets launches copy trading platform ‘ThinkCopy’

Melbourne-based broker, ThinkMarkets has introduced ThinkCopy, a copy trading platform that aims to provide clients with access to experienced traders and a range of social features.

Retail FX

Robinhood delists Solana, Cardano, and Polygon amid SEC’s crackdown

Commission-free brokerage Robinhood Markets announced on Friday that it would be delisting three crypto tokens from its platform. The decision comes shortly after the U.S. regulators intensified its regulatory actions against major cryptocurrency exchanges.

Digital Assets

US wants Bittrex to settle federal dues before compensating customers

The U.S. government has raised objections to Bittrex’s proposal to compensate its customers, adding to concerns about the resolution of the crypto exchange’s bankruptcy case.

Digital Assets

Binance prepares to suspend US dollar funding after SEC crackdown

Binance.US said it will temporarily suspend US dollar deposits and provided customers with a deadline to withdraw their fiat balances. This decision comes after the US Securities and Exchange Commission (SEC) filed a lawsuit requesting the freezing of Binance’s assets in the country.

Digital Assets

Januar launches real-time payments network to fill gap made by Silvergate and Signature

“To all the entrepreneurs and innovators out there is a clear message: if you are a legitimate European business working with crypto then Januar is here to provide you with the account and payment infrastructure you need to operate successfully and build the financial system of tomorrow.”

Retail FX

Exness’ active clients top 515K as monthly volume hits $3.35 trillion

FX trading volumes are climbing again as economic uncertainty spurred by recent developments over central banks’ policies encouraged speculators to pile back into the market.


Danske Bank plans signficant investment in digital platforms

“We have decided to significantly increase our investments in our digital platforms, expert advisory services and sustainability, focusing on the areas where we see the best opportunities for profitable growth.”

Digital Assets

ERD DeFi Lending Platform and USDE Stablecoin Unveiled at EDCON 2023

ERD, the Ethereum Reserve Dollar, is a decentralized lending platform and stablecoin that aims to provide a capital-efficient, decentralized, and stable solution to the challenges faced by the stablecoin industry, introducing a minimum collateralization ratio of 110% and a robust liquidation mechanism.