Ontario watchdog targets pandemic scammers preying on investors
Grant Vingoe’s first days as head of Canada’s largest capital markets regulator were anything but business as usual.
When he took the helm as acting chair and chief executive on April 15, following Maureen Jensen’s departure, the entire 572-person Ontario Securities Commission staff had already been working from home for weeks. Hearings that would have been keeping things buzzing at the downtown Toronto offices of the OSC were being conducted online via video or in writing, a once-rare occurrence that was already staging a comeback before shutdowns and social-distancing to slow the spread of the novel coronavirus pandemic became the norm.
As the health crisis and economic impact of efforts to contain it took hold, the regulator got busier, Vingoe said in an interview. In addition to the usual workload, the OSC ramped up efforts to crack down on scams preying on jittery Canadians who’ve seen their stocks see-saw amid the health crisis.
“People are particularly susceptible right now,” the 62-year-old said, adding that there has been an “uptick” in this type of fraud that has caused the OSC to issue five alerts warning investors. Some alleged perpetrators appear to be scammers who’ve pivoted from other schemes to target those vulnerable to health concerns, he said.
The watchdog is also on the lookout for traditional market malfeasance, such as insider trading, which Vingoe said could be a temptation as the pandemic drives business plans to change quickly and in a manner that could propel stock prices in either direction.
Pandemic-driven lockdowns and social-distancing measures have slowed some processes the regulator counts on to do its job — like “boots on the ground” functions such as executing search warrants, carried out by police forces tapped to bolster the OSC’S efforts.
“It’s been challenging in the home environment,” said Vingoe, who joined the OSC in 2015 after serving as a partner at law firms in New York and Toronto — most recently Norton Rose Fulbright, where he specialized in capital market transactions and the regulation of financial institutions.
In spite of the obstacles presented by the pandemic, Vingoe said the regulator has been able to advance investigations by obtaining documents and interviewing individuals via video conference.
“We can issue orders that compel people to participate,” he said, but added, “I’m not going to say there are no challenges with it.”
In addition to enforcement duties, market watchdogs around the world including the OSC are reacting in real time to the impact the pandemic is having on companies and the way they are regulated. Some firms are unable to hold timely meetings or make regularly scheduled disclosures to the watchdog and to investors.
Some relief has been granted to Canadian companies, including investment dealers and funds, Vingoe said. These include a blanket 45-day extension on filing financial statements, fund performance and technical reports, and other periodic filings, and the waiving of late filing fees accumulated through June 1.