Editor’s Note MARCH 2017 VOLUME 4, No. 2 The Road to Regulation


brokers ran rampant and bilked the investing public, many of whom included ordinary folk who had started to invest in financial markets like the rich since the 1890s. One of the most notorious of the corrupt stockbrokers, Ike Solloway, a former mining prospector, established a brokerage firm in Toronto in 1926 called Solloway Mills and Co. By 1929, Solloway Mills had become the largest brokerage in the country through its practice of solic- iting retail investors and making it easy for clients to visit its offices. Soon the firm had 30 offices across Canada, but much of this growth was financed by Solloway cheating his clients by “bucketing,” collecting money for an investment but not processing it. Regulations were loose until the market crash of 1929. Media criticism led by the


T


Financial Post included stories about insider trading and other crooked acts. Solloway was arrested in Alberta in January 1930, charged, jailed and fined a total of $425,000. The provinces were compelled to tighten regulations, and the Ontario government


set up a Security Frauds Prevention Board in 1931, which became the OSC in 1932. It is worth noting that the OSC came into being two years before the SEC in New York. Last year, the OSC made history again by appointing the first female chair and CEO.


Maureen Jensen took office in February 2016, and though the OSC has come a long way in terms of regulation since the wild days of the early 20th century, she is still very committed to protecting the public in the capital markets. In “To Support and Protect,” writer Susan Smith tells us how the Bre-X mining scandal of the 1990s helped bring Jensen into the world of regulation. Appalled and vocal about it, she moved from a job at a mining exploration company to the Toronto Stock Exchange. Eventually in 2011, Jensen joined the OSC. Smith writes: “At the top of her list is the Canada-wide effort to update the rules for


financial advisers and people selling financial products to the public, which involves moving from a ‘suitable products’ to a ‘best interest’ standard.” Please read the profile of Jensen on p. 30. Nearly everyone who is online has suffered some form of hacking, phishing or


attempt to infect a personal or work computer with a Trojan horse virus. And most people have heard about the alleged hacking of the US Democrats by the Russian gov- ernment, considered by some to be a form of cyber warfare. These are the curses technology has wrought, along with its obvious blessings. What is not generally well known is the extent to which corporate spying, using all the above methods and more, now constitutes the “largest transfer of wealth in the world’s history.” For more, see John Lorinc’s fascinating account of corporate espionage, “Eyes Spy” (p. 36).


Okey Chigbo editor-in-chief


2 | CPA MAGAZINE | MARCH 2017


HE Ontario Securities Com- mission (OSC) was born in an era when unscrupulous


EDITOR-IN-CHIEF Okey Chigbo DEPUTY EDITOR Bernadette Kuncevicius MANAGING EDITOR Tamar Satov ASSOCIATE EDITOR Yvette Trancoso ASSOCIATE FRENCH EDITOR Mathieu de Lajartre EDITOR, DIGITAL EDITIONS Margaret Craig-Bourdin MAGAZINE WEB PRODUCER Alan Vintar


ART DIRECTOR Bernadette Gillen ASSOCIATE ART DIRECTOR Kevin Pudsey


EDITORIAL ASSISTANT Harriet Bruser DIRECTOR, LANGUAGE SERVICES Jane Finlayson EDITOR, PROFESSIONAL MATTERS Mara Gulens CONTRIBUTORS Taryn Abate, Yan Barcelo, Mary Teresa Bitti, Dwayne Bragonier, Steve Brearton, David Descôteaux, Cathy Hutchinson, John Lorinc, David Malamed, David Trahair, Lisa van de Geyn, Karen Wensley, Trevor Wilson


PUBLISHER Heather Whyte, MBA, APR


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CPA MAGAZINE EDITORIAL ADVISORY BOARD: Chair: Nancy Cheng, FCPA, FCA; Vinetta Peek, FCPA, FCMA; Michel Magnan, FCPA, FCA; Fred Clifford, CPA, CA, CPA (Ill.); Debra J. Feltham, FCPA, FCGA; John Redding, CPA, CMA


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Photo: Paul Orenstein


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