Tariffs-Free Regulatory Importing?
Asad Akhtar
Some have been critical of shifting the onus of proving guilt from a regulator to private
litigants. These critics believe the Commission is in a better position to investigate and make a
finding of a breaches than private litigants. 116 Additionally, as the only assistance investors
have traditionally received from the regulators were admissions of liability;117 this tool may
leave investors with greater difficulties in recovering funds in civil action. Another challenge
with no-contest settlements is potentially weakening the deterrent aspect of securities
enforcement. If no-contest settlements become a prevalent tool by the regulator, market
participants may internalize securities law breaches as a “cost of doing business”.118 Finally,
there is concern that the public interest will not be served if the no-contest settlements are done
in matters lacking transparency.119
In application, much of the concerns surrounding the use of no-contest policies has
largely been avoided through a cautious and restricted approach.
2. OSC Staff Notice 15-702 – Credit for Cooperation
OSC Staff Notice 15-702 Revised Credit for Cooperation Program (Cooperation
Policy)120 considerably narrows the scope under which no-contest settlements may be offered to
a respondent. OSC Staff and the panel approving the settlement must consider several factors,
including:
Douglas Worndl & Dimitri Lascaris, “Just say no to OSC’s no-contest settlements”, The Globe and Mail
(September 6, 2012) online: The Globe and Mail .
117
Ibid.
118
Barbara Shecter, “No-contest settlements in focus as US appeals court rebuffs Rakoff criticism” Financial Post
(June 4, 2014) online: Financial Post .
119
Supra note 116.
120
Cristian Blidariu & Rene Sorell, “June Citigroup Appeal Decision Reinforces OSC’s New “No Contest”
Settlement Approach” McCarthy Tetrault (July 8, 2014) online: McCarthy Tetrault
.
116
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