Quebec’s financial watchdog is cracking down on businesses that illegally run a money-services business.
Why it matters: So far this year the AMF announced that 11 small businesses or individuals pled guilty before the Court of Quebec to illictly operating a money-services business, the overwhelming majority of whom were fined $15,000 for each infraction.
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.
The Tribunal, at the request of Quebec’s financial watchdog, issued a broad order barring Lacroix, DL Innov inc., Gestio inc., PlexCorps, and PlexCoin 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, either in Quebec or from Quebec to outside of the province. Section 1 describes a wide range of forms of investment, including securities, instruments, deposits of money, shares in an investment club, and options or non-traded derivatives.
The Tribunal also ordered them to pull out advertisements or solicitations on the internet over any securities or investment vehicles, and to shut down the site plexcorps.com and plexcoin.com – or at the very least make them inaccessible to Quebec consumers.
The Tribunal also ordered Facebook Canada Ltd. to shut down the Facebook pages of PlexCorps and PlexCoin. Facebook declined to comment. “We can’t share details about cases,” said a spokesperson.
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.
“Time will tell if they will stifle innovation in the province and deter people from starting ATMs there or whether or not people are willing to accept that regulation,” remarked Stuart Hoegner, CPA, CMA, and an international gaming lawyer
Independent risk management advisors must be registered with the provincial securities regulator in order to carry on advisory activities related to insurance product offerings, following a precedent-setting ruling by the Court of Quebec.
A ruling that ordered an insurance company to pay $460,000 to a Quebec couple raises questions over the scope of professional liability insurance coverage.
A recently passed bill that made Quebec the first province to regulate the money-services industry has elicited mixed reactions.
Questions surrounding the efficacy and scope of investor protection provided by the debt-ridden indemnity fund overseen by Quebec’s financial watchdog have surfaced.
Thanks to an economy that is still in doldrums and equity markets showing few signs of solid recovery, a growing number of investors faced with the prospect of shrinking investment portfolios are lodging complaints with provincial and federal bodies that oversee the investment community. The federal Ombudsman for Banking Services and Investments (OBSI) and the Quebec Chambre de la sécurité financière are reporting dramatic increases in investor complaints since the beginning of the year while Quebec’s financial watchdog, the Autorité des marchés financiers (AMF), has received a surging number of calls requesting information over investment products. Indeed, the Ombudsman has received so many calls over the past ten weeks that it has already opened up more files than it did in all of 2006 when it received 328 complaints, 197 of which led to investigations. The OBSI is the national dispute resolution service for customers of more than 600 financial institutions, including domestic and foreign banks, investment dealers, trust companies, mutual fund dealers, credit unions and scholarship trust plan dealers. Established in 1996, OBSI reviews …