RCMP Releases Report on Capital Market Fraud Investigation Teams

The Royal Canadian Mounted Police (RCMP) has released a report on how to improve the effectiveness of Integrated Market Enforcement Teams or IMETs, specialized police units that combat financial crime.

The report was submitted to the Commissioner of the RCMP by a senior expert advisor, Mr. Nick Le Pan.

"IMET investigation results have been disappointing to many, though there continues to be progress on existing cases. The preventative activities through the Joint Securities Intelligence Units (JSIU) are a success. Issues of timely results are partly a problem of unrealistic expectations, partly due to differences in Canada’s legal framework compared to other jurisdictions that are unlikely to change soon, and partly due to issues within the RCMP and its partners. I conclude that IMET can improve within the current legal framework".

"There is no one measure that would speed up investigations. The Report identifies several essential elements including focusing investigations from the start and having adequate ability to process and analyse the large body of electronic and hard copy documents that are typical of these investigations".

"Federal and provincial Crown prosecution offices are also part of the timeliness issue as, depending on the province, they must separately approve or review the police case, before charges are laid. In contrast to the U.S., Canadian legal tradition does not permit prosecutors to be in charge of investigations or participate in them on a day-to-day basis. There appear to be resource challenges in some jurisdictions that can slow down getting to charges and having appropriate prosecution teams in place (...) "

"Expectations for IMET sometimes confuse regulatory enforcement with criminal enforcement, without realizing that the latter has a much higher bar for laying charges or for conviction. Expectations of U.S.-style results are unrealistic, given Canada’s different legal environment. For example, our lack of ability to compel those not being investigated to provide information, documents and data pre-trial, hampers investigations compared to the U.S. or U.K.. Also, as an example, charging people in stages in a major investigation, as is done in the U.S., is not feasible in Canada due to rules on full disclosure of the Crown’s case to accused".

Le Pan makes a number of recommendations, including: examining use of ability to charge corporations and reach deferred prosecution and cooperation agreements with them, as is done in the U.S.; enhancing cooperation between federal prosecutors and provincial Crowns and the RCMP to reduce delays in Crown consideration of charges; and enhancing relations between IMET and securities commissions.