A charity and a businessman who sued a Montreal law firm caught in a tangled web of lawsuits after a former partner allegedly orchestrated a multi-million Ponzi scheme lost their case after Quebec Superior Court held that the lawsuits were groundless in a case that draws some light into a murky financial world.
White-collar crimes
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Auto parts maker fined $13.4 million for bid-rigging offenses
In the second-largest fine ever ordered by a court in Canada for bid-rigging offenses, the Ontario Superior Court of Justice fined Mitsubishi Electric Corp. $13.4 million after it plead guilty to three counts of bid-rigging for participating in an international conspiracy, capping a fine week by the Competition Bureau. -
Nearly $8.8 million in monetary sanctions imposed in 2016 for Quebec securities offenses
When Judge Réna Émond of the Court of Québec imposed just before the Christmas holidays fines totaling $120,000 on Danny Gagné and ISpeedzone Inc. for illegal practice as a securities dealer, it wrapped up a good year for Quebec’s financial watchdog.Nearly $8.8 million in fines and administrative penalties were imposed on 158 individuals and firms in 2016 for various offences under laws administered by the Autorité des marchés financiers (AMF), according to the latest enforcement report by the regulator. Of the $8.8 million in total monetary sanctions, $7.6 million involved securities or derivatives laws violations, with another $1 million stemming from Quebec’s Distribution Act. The report reveals that 15 offenders did more than 11,000 hours of compensatory work, with one offender choosing to pay his fines through a prison sentence of 729 days.
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U.S. authorities target individuals for corporation wrongdoings
Internal investigations are likely going to be more costly and more difficult to conduct for Canadian companies with operations in the United States following a change of policy by the U.S. Department of Justice that will now prioritize the prosecution of individual employees for civil and criminal corporate wrongdoing, according to anti-corruption and white collar criminal defence lawyers. -
Minimizing data breaches
Law firms have often been described as the “soft underbelly” of cyber security or the “path of least resistance to steal sensitive client information,” as one Canadian forensic expert put it. Down south, the U.S. Federal Bureau of Investigation went so far as to warn law firms that they are not doing enough to guard against cybercrime.Here, the situation is more of the same. “A lot of people in the legal community are coming around to cyber risk but there definitely needs to be increased awareness regarding cyber threats that law offices face,” says Kevvie Fowler, a partner and one of Canada’s leading forensic experts with KPMG LLP (Canada).
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Information Governance: Taming a world of chaos
It appears to have become the new norm. Not a week seems to go by without a report about a data breach. America’s largest bank, JP Morgan Chase, is the latest high-profile victim, and it is still reeling from this summer’s cyber attack that compromised the accounts of 76 million households — the equivalent of 65% of all U.S. households — and seven million businesses. Law firms are far from immune. An American multi-state criminal firm discreetly filed a report in late June with California authorities, the first U.S. state to adopt data breach notification legislation, after a hard drive containing backup files for one of the firm’s servers was stolen from the locked trunk of an employee’s vehicle. -
Quebec’s anti-corruption law proves to be a niche market for accounting firms
Quebec’s anti-corruption law, adopted more than a year ago in the wake of allegations of bribes, collusion, influence peddling, and widespread corruption in the construction industry, is proving to be good business for accounting firms.
Adopted more than a year following the launch of the Charbonneau Commission, a public inquiry mandated to examine potential corruption in the awarding and management of public construction contracts, the Integrity in Public Contracts Act (Act) compels companies to obtain a seal of integrity if they wish to bid on the billion dollars in contracts awarded annually in the Quebec public sector.
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Mayor accused of corruption and fraud must pay for own defence, rules appeal court
The former mayor of a Montreal bedroom community facing corruption-related charges will have to foot her own legal defence bills after the Quebec Court of Appeal held that the municipality did not have to pay for her defence because the alleged acts did not take place while she was performing duties of an elected member.
The precedent-setting ruling sends a clear message to elected municipal councillors who were counting on jurisprudence and the seemingly clear-cut wording of the Quebec Cities and Towns Act to compel municipalities to cover their legal fees when faced with criminal proceedings, according to municipal law experts.
“It’s an important judgment because it will provide guidance to municipalities who face similar circumstances,” remarked Daniel Bouchard, the managing partner of the Quebec City office for Lavery, de Billy. “Municipalities will now systematically refuse to pay.”
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More fallout from Norshield financial scandal
Nearly eight years after a high-flying hedge fund with ostensibly $1-billion in assets collapsed under the weight of a flurry of investor redemptions, the fallout from the Norshield Financial Group financial debacle continues unabated.
Quebec Superior Court recently certified a $159-million class action against the Royal Bank of Canada, less than four months after yet another financial planner was fined $225,000 by the Court of Quebec after being found guilty of 60 of the 62 charges laid against him by the provincial securities regulator in connection with the illegal distribution of products related to Norshield. So far, ten representatives have been found guilty, incurring fines totalling $628,500. Only one case remains outstanding.
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Quebec companies barred from bidding on public contracts have little chance of obtaining legal relief
Companies that have been barred from bidding on public contracts stand little chance of obtaining injunctive relief that would temporarily suspend a new law aimed at curbing corruption in the construction industry, following a closely-watched ruling by Quebec Superior Court.
In the wake of allegations of bribes, collusion, influence peddling, and widespread corruption in the construction industry, corroborated by testimony before the Charbonneau commission, the Quebec government passed legislation last December that compels companies to obtain a seal of integrity if they wish to bid on the billion dollars in contracts awarded annually in the Quebec public sector.
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Quebec Court of Appeal provides guidance over Anton Piller orders
Litigants who obtain evidence seized through Anton Piller orders, an extraordinary legal measure granted in exceptional circumstances, do not have an “automatic” right to review the material, according to a recent ruling by the Quebec Court of Appeal.
Anton Piller orders, described by the Supreme Court of Canada as a “draconian” measure, are civil search warrants that allow one party (accompanied by a bailiff and independent supervising lawyer) to launch a surprise raid on the business premises or homes of people when there is good reason to believe that one party to a lawsuit is in possession of documents or material that could be concealed or destroyed. It is considered by legal observers to be an intrusive and powerful legal remedy because no notice is given to the party against whom it is issued. Indeed, defendants only find out about the existence of the order when they are served and executed.
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Tough new anti-corruption laws in the horizon
Canadian companies who paid little heed to anti-bribery compliance can no longer afford to be complacent following proposed amendments that will beef up Canada’s anti-corruption laws and bring it somewhat in line with jurisdictions such as the United States and the United Kingdom.
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Misappropriation of funds: The profession’s dirty little secret
On an unusually warm and foggy Saturday evening this past December the $1.7-million home of Dany Perras was set ablaze, the third time in the space of a year an act of vandalism targeted the former Montreal lawyer. Perras, who resigned abruptly from the roll in October 2011, is under investigation by the Quebec Bar for allegedly orchestrated a multi-million dollar Ponzi scheme through his lawyers’ trust account. It’s been more than 16 months since the scandal that shook the Montreal legal community erupted, and the fallout is still being felt. Successfully petitioned into bankruptcy, Perras is the subject of an ongoing criminal probe and a host of legal proceedings – many of which are under court seal — launched by more than a dozen creditors seeking an amount surpassing $6 million.
The Perras case is unique, and yet at the same time it is not.
