Early Intervention

Provincial securities regulators are responsible for enforcing securities laws in their province, with several CSA members having various tools to detect possible misconduct or a failure to comply with securities laws, and to respond rapidly.

Knock and Talks: Jurisdictional investigators may make unannounced visits to offices of companies that may be engaging in investment or trading activity, but who may not be complying with securities law. During these visits, the investigators may ask about the nature of the business to determine whether it is operating legally.

Letters: Jurisdictions issue varying degrees of letters such as inquiry, caution and warning letters.

  • Inquiry Letters: CSA members may send a written inquiry to an individual or a company that appears to be engaging in illegal capital-raising activity, providing investment advice, or trading without being registered.
  • Caution Letters: CSA members may send a written caution to a person whose activities raise concerns. These letters often suggest that the person familiarize themselves with the securities legislation or obtain legal advice about how to comply. Sometimes, depending on the situation and the urgency, the jurisdiction relays this caution by telephone or email.
  • Warning Letters:  CSA members may send a letter to a person or company outlining that their activities appear to be breaching securities law and warning them to immediately stop the violation or further enforcement action may be taken.

Preservation Orders: During investigations, some provincial regulators’ executive directors have authority to issue a Preservation Order, preventing a person from transferring assets. It also increases the chances that there would be funds available to pay any sanctions that might be imposed by a CSA member panel.

Company Notifications: CSA members may notify companies that are being used by fraudsters to advertise, operate their website, and receive payments in an effort to cripple the scheme by shutting off one or more of the tools they are utilizing to scam Canadians. Examples of interventions include:

  • Have advertising removed from websites like Kijiji and various social media platforms;
  • Notify Credit Card Companies and Financial Institutions of the scheme and request that they stop facilitating payments for it; and
  • Notify Domain Registrars and Internet Service Providers in an effort to get the website shut down.

Investor Alerts: CSA members issue Investor Alerts to warn the public about possible harmful activity in progress. The subjects of these alerts are persons or companies who appear to be engaging in securities activities that may pose a risk to investors.