Internet

10 Aug 2017

Quebec financial watchdog raids offices of man prohibited from promoting PlexCoin

The Quebec financial watchdog raided last week the offices of Dominic Lacroix, a Quebec City man who has been prohibited by a tribunal to promote and solicit investors for a new virtual currency called PlexCoin.

The raid turned up a list of people from around the world, including Quebec, the U.S., and Africa, who expressed an interest in investing in PlexCoin, said Sylvain Théberge, a spokesperson with the Autorité des marchés financiers (AMF), the regulatory and oversight body for Quebec’s financial sector.

On July 20, 2017, at the request of the AMF, the Quebec Financial Markets Administrative Tribunal issued a broad ex parte forbidding Lacroix and his companies DL Innov inc. and Gestio inc. from “engaging in activities for the purpose of directly or indirectly trading in any form of investment” covered by the section 1 of the Quebec Securities Act (Act), either in Quebec or from Quebec to outside of the province. The tribunal issued the same order against PlexCorps and PlexCoin. (An ex parte order is an order granted by a judge at the request of and for the benefit of one party only, without notice to or contestation by the other party.)

The AMF alleges that Lacroix, among others, have not complied with the orders issued by the tribunal. As a result it is now considering whether to launch penal proceedings against Lacroix and his companies before the Court of Quebec (a provincial court) or to hand the case over to police authorities. “We are now in the midst of examining all our options,” said Théberge.

In a filing before the Tribunal obtained exclusively by Law in Quebec, the AMF revealed that it began its investigation on Lacroix, Dl Innov and other companies affiliated with him on May 8, 2017. On July 4, 2017, the AMF’s investigation branch received an anonymous tip about PlexCorps. The person “sought to bring to the AMF’s attention” that PlexCorps was seeking public financing while boasting high returns, without a prospectus.

In its filing, the AMF argued that investing in PlexCorps by purchasing PlexCoin “constitutes an investment contract” as per the Quebec Securities Act, and that neither PlexCorps nor PlexCoin registered with the AMF as a securities dealer as required by the Act. The filing also notes that PlexCorps and PlexCoin did not submit a prospectus to the regulator as required by the Act. It points out that neither PlexCorps nor PlexCoin has a “legal existence” in Canada or Quebec, and that no such organization can be found in the widely-used company database web site opencorporates.com.

In its filing, the AMF alleges that PlexCoin actively participated in a French-language forum entitled cryptofr.com. According to the filing, an AMF investigation shows that discussions emanating from PlexCoin about the virtual currency in the French-language forum stems from an internet protocol address that is linked to DL Innov Inc, a Quebec City firm that was established as a holding company on December 2012 under the Quebec Business Corporations Act. DL Innov has never registered with the AMF as a securities dealer.

The filing also notes that in discussions about PlexCoin in the French-language forum, PlexCoin itself stated that “Gestio Inc., a company related to DL Innovo Inc, was mandated to manage the French-language social network of PlexCorps.” Gestio inc., a registered Quebec City company established on February 2013, operates in the IT sector and conceives and leases management software. Gestio Inc.’s major shareholder is DL Innov, and its president, secretary and treasurer is Domenic Lacroix. Like DL Innov, Gestio and Lacroix did not register with the AMF as a securities dealer.

The Tribunal ordered Lacroix, DL Innov, Gestio, PlexCorps and PlexCoin to withdraw advertisements or solicitations on the internet or elsewhere relating to securities or any forms of investment, published or distributed by them directly or indirectly on the internet or elsewhere.

In issuing its broad ex parte orders, the tribunal notes that it was important to render a quick decision to protect the public.

Categories: Business, Internet, Quebec, White-collar crimes

Tags: Autorité des marchés financiers (AMF), PlexCoin, PlexCorps, virtual currency
7 Aug 2017

Quebec financial watchdog considering its options over PlexCoin

Quebec’s financial watchdog is considering handing over the case involving Dominic Lacroix and his companies, who have been prohibited by a tribunal to promote and solicit investors for a new virtual currency called PlexCoin, to police authorities.

(more…)

Categories: Business, Internet, Quebec

Tags: Autorité des marchés financiers (AMF), PlexCoin, PlexCorps, virtual currency
26 Jul 2017

New virtual currency targeted by Quebec financial watchdog

The Quebec Financial Markets Administrative Tribunal issued a series of expansive ex parte orders prohibiting Dominic Lacroix and several of his companies from promoting and soliciting investors for a new virtual currency set to be launched.

(more…)

Categories: Business, Financial services, Internet, Quebec, Rulings

Tags: Autorité des marchés financiers, Financial Markets Administrative Tribunal
3 May 2017

Legal profession concerned about algorithmic bias

Algorithms, the set of instructions computers use to carry out a task, have become an integral part of everyday lives, and it is immersing itself in law. In the U.S. judges in some states can use algorithms as part of the sentencing process. Many law enforcement officials in the U.S. are using them to predict when and where crimes are likely to occur. They have been used for years in law firm recruitment. And with advancements in machine learning they are also being used to conduct legal research, predict legal outcomes, and to find out which lawyers win before which judges.

Most algorithms are created with good intentions but questions have surfaced over algorithmic bias at job hunting web sites, credit reporting bureaus, social media sites and even the criminal justice system where sentencing and parole decisions appear to be biased against African Americans.

And the issue is likely to gain traction as machine learning and predictive coding become more sophisticated, particularly since with deep learning (which learn autonomously) algorithms can reach a point where humans can often no longer explain or understand them, said Nicolas Vermeys, the assistant director at Cyberjustice Laboratory in Montreal.

AlphaGO is a case in point. When AlphaGO, Google’s artificial intelligence system, defeated the 18-time world champion in the complex and highly intuitively game of the ancient Chinese board game GO, it was not just a demonstration of yet another computer beating a human at a game. GO, a game with simple rules but profound complexity, has more possible positions than there are atoms in the universe, leading some to describe it as the Holy Grail of AI gaming. It was a remarkable feat because AlphaGO was not taught how to play Go. It learned how to play, and win, by playing millions of games, using a form of AI called deep learning, which utilizes neural networks that allow computer programs to learn just like humans. More than that, the victory showed that computers are now able to rely on its own intuition, something that was thought only humans could do.

Another example is Deep Patient. The brainchild of a research group at Mount Sinai Hospital in New York, it is a machine learning tool that was trained to detect illness from data from approximately 700,000 patients. Deep Patient turns out to be good at detecting hidden patterns in the hospital data that indicate when people are becoming ill. It also appears to be really good at anticipating the onset of schizophrenia, a very difficult disease for physicians to predict. But the people behind Deep Patient do not yet understand why Deep Patient seems to be good at predicting schizophrenia and do not understand how it works.

“We have no idea how algorithms arrived at their decision and therefore cannot evaluate whether the decision has value or not,” said Vermeys, whose research institution is studying the issue of algorithmic bias. “There is a risk to relying completely on machines without necessarily understanding its reasoning.”

No human is completely objective, and so it is with algorithms as they have been programmed by programmers, noted Ian Kerr, a law professor at the University of Ottawa and the Canada Research Chair in Ethics, Law and Technology. Programmers operate on certain premises and presumptions that are not tested by anybody else which leads to results based on those premises and presumptions which in turn gives rise to bias, added Kerr.

On top of that it is very difficult to challenge such decisions because “whoever owns the algorithms has trade secrets, isn’t likely to show you the source code, isn’t likely to want to talk about the secret source and what makes the algorithm work,” said Kerr. “What justifies the algorithm is its success or perceived success which is very different from whether or not it operates in biased ways.”

Aaron Courville, a professor with the Montreal Institute for Learning Algorithms, shares those concerns. “We are really in a phase where these algorithms are starting to do interesting things, and we need to take seriously the issues of responsibility,” said Courville.

Europe is taking a serious look at these issues. Under the European Union’s new General Data Protection Regulation (GDPR), automated individual decision-making that “significantly affect” users will be restricted, argue Bryce Goodman of the Oxford Internet Institute and Seth Flaxman of the University of Oxford’s Department of Statistics in a paper. Expected to be in force in 2018, the GDPR will also effectively create a “right to explanation,” according to the authors. In other words, users can ask for an explanation of algorithmic decision that was made about them.

“This is where Europe and the U.S. go wild in their disagreements,” explained Kerr, who has also written about the issue of a right to explanation. “Europe starts with this principled approach that makes sense. If a decision is about me and it has sort of impacts on my life chances and opportunities, I should be able to understand how that decision was made. It invokes large due process concerns.

“The due process idea is that no important decision should be made about me without my own ability to participate. I have a right to a hearing. I have a right to ask questions. So all of these kinds of rights are kind of bound up in this notion of the duty to an explanation. And the hard thing is that an algorithm isn’t in the habit of explaining itself, which means that if that kind of law prevails then people who use algorithms and design algorithms will have to be a lot more forthcoming about the mechanisms behind the algorithm.”

Further reading:

Machine bias: There’s software used across the country to predict future criminals. And it’s biased against blacks by ProPublica, an American independent, nonprofit news organization.

Chief Justice John Roberts is a Robot by University of Ottawa law professor Ian Kerr.

European Union regulations on algorithmic decision-making and a “right to explanation” by researchers Bryce Goodman and Seth Flaxman.

And for the technologically-inclined:

Mastering the Game of Go with Deep Neural Networks and Tree Search by David Silver, the lead researcher on the AlphaGo project.

Categories: Internet, Legal business, Legal Practice Management, LegalTech

Tags: Algorithms, artificial intelligence, bias
5 Jan 2017

The sharing economy: A Pandora box for legal protection insurers

The practice of law is under duress. Legal service innovations driven by digitalization and globalization are propelling seismic change. So too is the emergence of the sharing economy model which has taken the world by storm. Novel ways of delivering new products and services are seemingly materializing daily to satisfy increasingly demanding and fickle consumers. The rapidly evolving landscape is putting a strain on traditional business models, while governments and regulatory authorities are scrambling to keep up with the dizzying pace of change. But with change comes challenges – and opportunities – for legal service providers and legal protection insurers alike, all of which was explored at a conference held in Montreal recently by the International Association of Legal Protection (RIAD).

(more…)

Categories: Business, Features, Financial services, Internet, Legal business, Legal Practice Management

Tags: sharing economy
6 Jul 2016

Quebec financial watchdog warns consumers over P2P insurance

Stung by criticism that it has at times acted too late to stop unsound practices, Quebec’s financial watchdog recently warned consumers to be wary of peer-to-peer insurance offerings even though the digital sharing platform has yet to make a formal entrance in Canadian soil.

(more…)

Categories: Business, Financial services, Intellectual property, Internet, Quebec

Tags: Insurance, peer-to-peer
25 Feb 2016

Quebec plans to order ISPs to block unlicensed gaming sites

A controversial bill tabled by the Quebec government that will compel Internet service providers to block unlicensed gambling websites is an expensive, futile, and unconstitutional endeavour that raises concerns about the neutral role of Internet providers, according to gaming and telecommunication experts.

The proposed legislation, tabled last November, will amend the province’s Consumer Protection Act and require Internet service providers (ISPs) to “block access” to a list of “unauthorized gambling sites” that will be drawn up by Loto-Québec, a government agency that operates and develops lotteries in the province. Internet service providers face steep fines — up to $100,000 and twice that amount for subsequent offences — if they fail to comply.

“It is absolutely urgent that anyone looking at this oppose this,” remarked Bram Abramson, the chief legal and regulatory officer at TekSavvy, an independent Canadian ISP. “Clearly it would establish precedence. It would be the first time that any Canadian government has ordered ISPs to routinely block content and to engineer our networks in such a way as to be able to block content in this routine manner. That’s not the kind of Internet that Canadians want.”

The contentious plan is being closely watched by other provinces who have, with the exception of Saskatchewan, online gaming offerings. Like Quebec, British Columbia, Manitoba and Ontario offer a full slate of online casino-style gambling while the Atlantic Lottery Corp. which oversees gaming for New Brunswick, Newfoundland and Labrador, makes lottery tickets and sports betting available on the Internet. Much is at stake. H2 Gambling Capital, a leading supplier of gambling data and market intelligence, predicts that the value of the global online casino and bingo market will surge to approximately US$13.5 billion by 2018, representing a compound annual growth rate of more than 10 per cent from 2014. The Quebec government predicts that by directing online gambling to its own website, Espacejeux, that it will bring in an additional $13.5 million in revenues in 2016-17, and $27 million annually after that.

“The landscape for gaming in Canada is going to change very shortly,” predicted renown Montreal gaming lawyer Morden Lazarus. “The provinces have decided that they want to get into online gaming and they want to be able to generate these revenues for their own benefit. The Quebec government is leading the charge.”

The Quebec initiative however will likely end up before the courts, according to legal observers. Quebec is moving forward under the guise of improving public health. According to the 2015-16 Quebec budget, “illegal websites do not apply the same responsible gaming rules as Espacejeux,” and that poses a risk to the population, especially young people. Since it will enact the new provisions under the Quebec Consumer Protection Act, the provincial government is also expected to argue that establishing a firewall to prevent online gaming competitors is a matter of consumer protection, which falls under the jurisdiction of provinces.

But industry observers don’t buy that reasoning. The Quebec bill clearly breaches federal jurisdiction over telecommunications, pointed out Chris Tacit, a telecommunications lawyer based in Ottawa. It also appears to infringe s. 36 of the federal Telecommunications Act, which prevents Canadian carriers from controlling the content or influencing the meaning or purpose of telecommunications, added Tacit. “What is an ISP supposed to do it if it is ordered to block unlicensed gambling websites by the Quebec government which under s.36 of the Telecommunications it is prohibited from doing,” asked rhetorically Tacit. “It is an untenable situation. This can only lead to litigation.”

ISPs are “content neutral” utilities that simply provide access to a service, and are not in the business of picking and choosing what Canadian consumers should have access to, added Abramson. If the Quebec initiative goes unchallenged, Abramson fears that other provinces may follow suit and would be emboldened to establish different telecommunication regulatory rules that would likely differ from one province to another. “I have no doubt that if this were allowed to proceed, other provinces will follow,” said Abramson.

Critics also point out that the proposed legislative scheme amounts to censorship, likely infringes the Canadian Charter of Rights and Freedoms, and sets a dangerous precedent. The bill would unlikely be able to survive a freedom of expression challenge, and Quebec would have a hard time arguing that compelling ISPs to block unlicensed gambling websites is a reasonable limitation. “Just imagine it wasn’t about gambling,” observed Timothy Denton, a CRTC commissioner from 2008-2013. “Suppose it was about being unable to reach controversial political websites, people would be up and screaming about it. But because it concerns the vice of gambling, it’s more defendable in public.” Or as Tacit pointed out, if the Quebec government can get away with blocking online gaming websites, “what lays next?”

The lack of clarity in the bill also poses problems, said gaming lawyer Stuart Hoegner. Bill 74 does not define what wagers and bets are. Nor does it spell out whether the definition will be identical to the one found in the Criminal Code of Canada or whether the Quebec government will forge ahead and establish a new definition of wagers and bets. And while the bill plainly states that an ISP may not “give access” to an online gambling site whose operation is not authorized under Quebec law, it does not define what the term access means, added Hoegner. “The term access is pretty broad,” remarked Hoegner. “What if an ISP makes good faith efforts to block but a customer circumvents it? Have they violated that provision or is there a safe harbour? We don’t know.”

Forcing ISPs to establish firewalls on unauthorized online gambling sites would also be very expensive because it would require “wholesale changes” to telecommunication networks, said Abramson. “It’s very difficult to do what is being asked because in many cases telecommunication networks do not treat Quebec as a distinct network. That would require some re-architecture – and that’s expensive,” explained Abramson. It would also be for naught, given the porous nature of the Internet. Growing numbers of Canadians are becoming increasing familiar with virtual private networks (VPNs) to skirt around intellectual property protections governing websites such as Netflix, and gambling aficionados will not hesitate to dodge restrictions the Quebec government may try to impose on them, added Abramson.

A working group that studied the issue of online gambling for the Quebec government already provided the framework that would allow the Quebec government to recoup more monies from online gambling, without having to resort to ISPs, remarked Lazarus. Ironically the 2014 “Report of the Working Group on Online Gambling” does not recommend the “systematic filtering of illegal websites.” Instead it recommends either the creation of a portal through which private operators can offer online gambling to Quebecers or establishing a licensing system, which is favoured by many jurisdictions around the world.

Under the portal model, the Quebec government would be held responsible for the management of online gambling offerings by establishing standards and precise rules in order to comply with s. 207(4)(c) of the Criminal Code, which allows only for provinces to set up and operate a lottery or game of chance on or through a computer. Under the portal model the government would also have to define gaming compliance rules, the rate of returns, the types of games offered, and security measures pertaining to fraud and money laundering. “Going the ISP route will cause more anguish and more issues more than anything else,” said Lazarus. “They should focus on the creating a process where online gaming providers provide managed services to the province, and all of the activity will go through the provincial government’s portal.”

In the meantime, the Quebec government can expect ISPs to fight back if they follow through with their controversial proposal. “This has not made the Quebec government popular among a lot of telecommunication providers,” said Abramson. “It is just a very surprising initiative, especially one that is so clearly outside their jurisdiction, that is so expensive, and likely to be ineffective.”

Categories: Internet, Legislation, Quebec

Tags: Internet service providers, online gaming
15 May 2015

Quebec regulates virtual currency ATMs and trading platforms

In a move that caught the business and legal community by surprise, Quebec became the first jurisdiction in Canada to regulate the digital currency sector by requiring businesses that operate virtual currency automated teller machines or trading platforms to obtain a licence to operate in the province.

But the recently published amendments to the Policy Statement of the Money Services Businesses Act (Act) by Quebec’s financial watchdog has drawn criticism from industry observers who assert that it is brimming with ambiguities and risks hindering the burgeoning digital currency industry.

(more…)

Categories: Business, Financial services, Internet, Legal Practice Management, Legislation, Quebec

Tags: Autorité des marchés financiers, cryptocurrencies, virtual currency
8 Mar 2015

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).

(more…)

Categories: Internet, Legal Practice Management, White-collar crimes

Tags: cybercrime, data breaches, security
5 Jan 2015

Request for recusal highlights need for judicial guidelines over social media

A Quebec judge who was asked by defence lawyers to recuse herself from presiding over a multi-defendant drug trial because many of her “friends” on Facebook are Crown prosecutors highlights the need for a comprehensive guideline to help judges navigate the world of social media and developing technologies, assert legal observers. (more…)

Categories: Court of Quebec, Internet, Judiciary, Legal Practice Management, Quebec, Rulings

Tags: judicial ethics, Social media
15 Aug 2014

University research group ushering justice system into digital age

An online dispute resolution pilot project to resolve small claims court cases is scheduled to be launched this fall by the Quebec government thanks to efforts by a university research group that wants to usher the justice system into the digital age.

The alternative dispute resolution open source and interoperable software program is the latest innovative offering developed by the University of Montreal’s Cyberjustice Laboratory, a unique and world-class research organization that strives to put information technology at the service of the judicial system in order to make it more accessible, more efficient and more affordable.

(more…)

Categories: Access to justice, Court of Quebec, Intellectual property, Internet, Legal business, Legal Practice Management, Quebec

Tags: Cyberjustice Laboratory, online dispute resolution
16 Jun 2012

Open data: The value of openness

When Bing Thom Architects set out to investigate the effects of rising sea levels in Vancouver, the firm decided to gather crucial information about the shoreline from the city’s open data web portal. The study ultimately painted a sobering view of the potential impact of climate change: more than $25-billion in Vancouver real estate would be “negatively affected” by a rise in the sea level in the 21st century, excluding infrastructure such as roads, sewers, and electrical facilities. But the research also underscored the value of open government data: information that is collected by government for its own purpose and made available to the public for its own use.

Open data is essentially information that is free for anyone to use, reuse and redistribute. Proponents of making government data available to the public identify two main benefits: First, innovators of all kinds can use the information to build useful applications and services, and second, it promotes government transparency and accountability and encourages citizen participation in public policy debates. As Andy Yan, the urban planner involved in the Vancouver project observes, “when you have this type of transparency and governments release their databases to the public, you can have these kinds of discussions about public policy out in the open instead of being captured in little clubhouses.”

(more…)

Categories: Access to justice, Features, Intellectual property, Internet

Tags: open data, open government, personal data, Privacy
22 Feb 2011

New Anti-Spam law prohibits everything except for exceptions

The new anti-spam and anti-spyware legislation has such a broad reach and is so complex that organizations that conduct business online will need to reassess their business practices for sending commercial electronic messages or face stiff new penalties that can go up to $1 million for individuals and $10 million for corporations for each violation, according to experts.

(more…)

Categories: Business, Canada, Intellectual property, Internet, Legal Practice Management, Privacy

Tags: anti-spam legislation, anti-spyware legislation, Bill C-28, commercial electronic messages, Fighting Internet and Wireless Spam Act
6 Jan 2011

Popular works should enjoy narrower copyright protection, argue legal experts

When Australian Federal Court judge Peter Jacobsen ruled that a famous flute riff from the hit Down Under by the pop group Men At Work plagiarized a popular nursery rhyme from the Girl Guides, it once again underscored divisions over the implicit and explicit role that popularity should play in the copyright debate.

In a ruling that marked the end of a three-year legal battle, Judge Jacobsen held that the riff in the song, which topped the charts in the United Kingdom and America in early 1982, infringed on the copyright of Kookaburra “because it replicates a substantial part of the song” written by written by teacher Marion Sinclair.

While the ruling held strong to the unstated position that popularity sometimes can and does actually increase the protection a work is afforded, not everyone is swayed that such views should be hold true in the digital age. (more…)

Categories: Canada, Intellectual property, Internet

Tags: copyright, Copyright Act
3 Mar 2009

Blogger condemned to pay $125,000 for defamation

An exiled Senegalese journalist, now residing in Montreal, has been ordered to pay the son of the president of the Republic of Senegal $125,000 for defaming him in a blog widely republished by African media outlets.

In a blog run by the well-respected French-based publication Nouvel Observateur, Souleymane Jules Diop portrayed Karim Meïssa Wade, in a series of postings that were published between July and November 2005, as a criminal who appropriated or diverted public funds, was involved in money-laundering, and resorted to threats and physical intimidation.

(more…)

Categories: Internet, Quebec, Quebec Superior Court, Rulings, Supreme Court of Canada

Tags: blogging, defamation, Freedom of expression