Monday 13th July 2020

Resource Clips


Posts tagged ‘ontario securities commission’

The OSC and RCMP warn about scammers offering fake work-at-home jobs during the pandemic

July 9th, 2020

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Jeff Kehoe of the Ontario Securities Commission comments on a $525,000 reward for spotting cryptic “irregularities”

June 15th, 2020

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CSA issues report card on resource estimate disclosure

June 5th, 2020

by Greg Klein | June 5, 2020

CSA issues report card on resource estimate methodology

Projects involving precious metals and B.C.-headquartered
companies predominated among the 86 deposits under scrutiny.
(Chart: Canadian Securities Administrators)

 

How well do early-stage explorers reveal the technical data and economic assumptions behind their 43-101 resource estimates? A review by the Canadian Securities Administrators found their technical reports generally satisfactory, although often lacking in data verification as well as discussions of economic prospects and cutoff grades.

Completed in late 2018 but not reported until June 4, the study examined 86 technical reports. As a result, 10 were sent back to the issuers to be amended and re-filed. Six of those were cited for inadequate disclosure and the other four required revisions to their resource estimates. Conducting the study were seven staffers from securities commissions in British Columbia, Ontario and Quebec.

CSA issues report card on resource estimate methodology

The review looked at 33 aspects of seven broad issues of disclosure: the QP’s experience; data verification; mineralogical controls and geological model; data analysis; resource estimation and classification; reasonable economic prospect of eventual mining; and reporting sensitivities, risks and uncertainties.

Among problematic areas was data verification, a vital issue concerning results from previous operators. The study found the process inadequate for recent data in over 20% of reports, and over 30% for historic data.

In several cases economic prospects were stymied by insufficient info regarding metallurgy, costs, prices and restraints. Reporting of overall sensitivity and risks was another issue of concern, especially where companies used boilerplate language instead of discussing risks specific to their projects.

Cutoff grades didn’t always have the base case emphasized, the study found, and not all cutoff grades came with a necessary discussion of reasonable economic prospects.

But the study found good work too. “Despite some deficiencies, many technical reports provided detailed and useful information on geological constraints applied to the estimate, and on statistical treatment of the data.”

“Robust technical reports are essential to disclosure at key project development stages,” noted Louis Morisset, CSA chairperson and president/CEO of l’Autorité des marchés financiers. “Our intention for publishing this guidance in the current environment is to support mining issuers in preparing their resource estimates, and to reinforce the importance of technical reports that are transparent and comply with disclosure requirements and industry best practices.”

As part of their ongoing disclosure review, securities commissions staff “will pay special attention to [mineral resource estimates] and the areas of inadequate disclosure identified,” the report added.

Download the CSA Review of Mineral Resource Estimates in Technical Reports.

OSC whistleblower program awards $525,000 to independent expert

April 6th, 2020

by Greg Klein | April 6, 2020

A program that encourages and protects in-house informers can also pay off handsomely to outsiders. The Ontario Securities Commission has awarded $525,000 to someone who used industry expertise, as opposed to inside intel, “to identify irregularities.”

OSC whistleblower program awards $525,000 to independent expert

The commission’s whistleblower program offers up to $5 million for tips on insider trading, fraud, misleading statements and other violations of Ontario securities law. The OSC keeps confidential the whistleblower’s identity, as well as that of the wrongdoer, the amount of “irregularities” and the penalty.

But the penalties or repayments must be high. The minimum amount to qualify for reward is $1 million. Payouts range from 5% to 15% of those amounts.

Sources come in two categories—knowledge derived from “experiences, communications and observations in employment, business or social interactions” or analysis “of publicly available information or data that reveals additional insight that is not generally known or available to the public,” the OSC states.

“Experts can be among the first to spot signs of potential misconduct in our markets,” said Jeff Kehoe, OSC director of enforcement. “These subtle clues are often buried deep in reams of data and technical information decipherable only by someone with in-depth market knowledge or industry-specific expertise.”

Launched in July 2016 as the first of its kind in Canada, the OSC’s program has so far given whistleblowers more than $8 million. As of February 2019, a total of $7.5 million went to just three informants.

Tyler Fleming discusses the Ontario Securities Commission’s public awareness program

December 3rd, 2019

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OSC promotes financial literacy, BCSC to get new powers of investigation and enforcement

November 1st, 2019

by Greg Klein | November 1, 2019

That “sociopathic securities regulator,” as Conrad Black called it, has new programs scheduled to help protect investors from, well, other sociopaths. The Ontario Securities Commission will present in-person, online and over-the-phone events throughout November to mark Financial Literacy Month.

People need the tools to make informed financial decisions, and through our financial literacy and investor education activities we’re helping millions of people get smarter about money.—Tyler Fleming,
Ontario Securities Commission

Among them are community seminars, a November 19 telephone town hall, a multilingual website expanded with 16 more languages, a video series, further editions of Investor News and additional resources on the OSC’s consumer website GetSmarterAboutMoney.ca.

“Improving people’s financial knowledge, skills, confidence and behaviour is a key area of focus of the OSC,” said the commission’s Tyler Fleming. “People need the tools to make informed financial decisions, and through our financial literacy and investor education activities we’re helping millions of people get smarter about money.”

Late last month the British Columbia Securities Commission joined the provincial government to announce “sweeping changes” that would give the BCSC “some of the strongest powers in the country.” The proposed legislation would be the first significant amendments of the province’s Securities Act since 2011 and the most extensive since the act became law in 1996.

The new measures would boost maximum fines and prison terms, with minimum sentences applied to some repeat offenders. In some cases the BCSC could impose fines without a hearing. The commission would also gain stronger investigative powers.

OSC promotes financial literacy, BCSC to get new powers of investigation and enforcement

Other measures would allow the BCSC to seize property transferred to third parties, prevent fraudsters from getting a driver’s licence or vehicle plates, and seize registered retirement savings plans.

The commission would also gain stronger control over derivatives trading and corporate transactions.

“B.C. is setting the bar high when it comes to protecting people’s investments,” said Ermanno Pascutto of the Canadian Foundation for Advancement of Investor Rights. “These amendments to improve fine collection rates are some of the most far-reaching in Canada and align with international best practice. We are pleased that the B.C. government and the BCSC will make it a priority to return funds to victims of investment fraud.”

The stronger measures apparently respond to a series of 2017 stories by Postmedia journalist Gordon Hoekstra detailing several cases of unenforced sanctions despite scammers holding significant assets. Over the previous decade the BCSC collected less than 2% of $510 million in fines and payback orders while the OSC enforced about 18% of its penalties, he reported.

“Immediately after the Postmedia investigation, the BCSC filed at least 10 writs of seizure and sale in B.C. Supreme Court for financial fraudsters owing nearly $70 million in penalties, and renewed three enforcement orders, “ Hoekstra wrote in June 2018. “Also following the investigation, B.C. Finance Minister Carole James ordered the BCSC to improve its collection record and called for new tools and modernization of the Securities Act to improve collection.”

Conrad Black suggests Alberta set an example in reforming securities regulations

July 11th, 2019

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Conscription, colonization, a gold-backed buck: Some Conrad Black remedies for Canada

June 3rd, 2019

by Greg Klein | June 3, 2019

Here’s a guy who wants to make this country a “world-important nationality”—in other words, to put Canada on the map. Yes, a country that makes “unassuming” a euphemism for “sub-mediocre” just might have hope after all. But Canadians would have to follow Conrad Black’s plan, Conrad Black says.

Conscription, colonization, a gold-backed buck Some Conrad Black remedies for Canada

Not at all modest in his proposals, the former Canadian who renounced his citizenship outlines them in his most recent book, The Canadian Manifesto. Despite zero likelihood of finding acceptance, the ideas do offer a peculiar interest.

Forced military service is one of them, as is a Canadian colonial empire in the Caribbean. Of interest to goldbugs, however, is Black’s “sensible, radical and imaginative” alternative to the northern peso: “Canada should tie the value of its currency to a combination of the prices of gold, oil, and a consumer shopping basket in equal thirds.”

Sounds interesting, as far as it goes. But that’s as far as it goes. Black provides no additional info.

As for Canada’s resource industries, Black lambastes the “faddish environmental trends” holding them back.

“All that we have that the world needs are natural resources. More than forty per cent of the stock values on the Toronto Stock Exchange are extractive industries that operate in Canada. The banking cartel lives largely off the resources companies, which feed all heavy, and most light industry, and the legal and accounting and consulting professions live off the banks and their principal clients.”

Speaking of the TSX, Black says it suffers from over-regulation. He suggests one province, preferably Alberta, simplify its securities system. Provinces that follow its example “would almost immediately become serious international financial centres, and not just, as Canadian stock exchanges have always been, non-essential eddies of local resource promotion and small-capital start-ups and the odd site of a great international and inter-listed company. Canada could easily surpass Singapore, Hong Kong, and any other centre—except New York and London and perhaps Tokyo and Shanghai—as a world leader in modern securities issuance and trading.”

A capricious and pestilential tumour on the entire Canadian securities industry.—Conrad Black ponders the
Ontario Securities Commission

As for that “sociopathic securities regulator” looming over Toronto, “an added benefit would be the humbling of the Ontario Securities Commission, which periodically tries to shoulder aside the other provinces and become a national regulator, and has become a capricious and pestilential tumour on the entire Canadian securities industry, such, in its stunted condition, as it is.”

Looking at other aspects of the Canadian malaise, Black challenges the Charter of Rights, under which “practically every judge in Canada is now cock-a-hoop imposing his or her own idiosyncratic versions of legislation.

“[….] Pierre Trudeau himself told me, nearly twenty years after the patriation of the Constitution and promulgation of the Charter, that he never intended any such disorderly rout as had already begun to tumble out of the many courts and jurisdictions in his last years.”

Compulsory service, military and civil, augments Black’s plan to tackle unemployment and impress the world. “We need at least 100,000 more people in the armed forces,” he insists.

How on earth would Ottawa sell such an idea? By making it sexy, Black suggests: “The military could also be kitted out in far more attractive uniforms, by Canadian designers, and that would help instil greater pride in military service, which the distinguished military traditions of Canada certainly justify. One need only look at YouTube videos of Italian carabinieri, or crisply professional and stylishly clad contemporary Chinese female soldiers to see how easily the martial career, even if used chiefly for assisting in humanitarian disasters, could be made more attractive.”

A measure that would quickly expand the population would be the absorption of parts of the West Indies.—Conrad Black advocates Canadian colonialism

Of course Black’s “world-important nationality” would need many more people. One tactic of population expansion could be territorial expansion with “the absorption of parts of the West Indies.” As examples he mentions Bahamas, Barbados, Antigua and Bermuda, along with Haiti, “already a significant contributor to such increases as there are in the French-speaking population of Quebec.”

Black examines other topics including health care, culture and education, the latter problem sometimes evident in this document’s editorial standards. The book can be unintentionally entertaining for its curmudgeonly comments as well as its impractical boldness. But, even if it proposes to substitute one wretched dystopia with another, The Canadian Manifesto does offer a serious perspective on a country that’s lost its way, if it ever had one. This could be just the thing to read on a Canada Day trip to the States.

Read Mark Steyn’s comments on Conrad Black’s prosecution.

Maureen Jensen of the Ontario Securities Commission comments on $7.5 million awarded to tipsters

March 18th, 2019

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Speaking out pays off as three whistleblowers reap $7.5 million in OSC rewards

February 27th, 2019

by Greg Klein | February 27, 2019

In the first cash inducements of their kind from Canada’s first program of its kind, the Ontario Securities Commission handsomely rewarded three people for exposing securities misconduct.

Their names remain confidential, as do the companies involved and other details that might help identify the tipsters. Their info, on three separate matters, resulted in the companies making monetary payments to the commission.

Speaking out pays off as three whistleblowers reap $7.5 million in OSC rewards

Not without controversy, the OSC’s Office of the Whistleblower began operations in 2016, offering up to $5 million for the lowdown on insider trading, fraud, misleading financial statements and other dirty trading-related deeds. The OSC pays out after proceedings finish and rights to appeal expire, a process that can take several years.

To qualify for rewards, tips must result in over $1 million in sanctions or voluntary payments by wrongdoers. Submissions may be made anonymously, although the tipster’s identity is required for a payoff. Awards range from 5% to 15% of the sanctions and/or voluntary payments, up to a $5-million maximum.

Whistleblowers who took part in the misconduct might still qualify, although the degree of complicity can decrease the award.

Companies can also squeal on themselves. As of June, 11 no-contest settlements from self-reporting returned over $368 million to investors.

The tips “expose complex securities misconduct that may not otherwise come to light, allowing us to take timely action,” noted OSC director of enforcement Jeff Kehoe. “We hope this announcement, alongside our substantive whistleblower protections, will encourage more whistleblowers to come forward.”

Numbers released last June showed the program had attracted about 200 tips, an average of about two per week. After review, 19 of them went to the OSC’s enforcement department, sparking 15 investigations. Another 68 were “shared with another OSC operating branch or another regulator for further action,” the commission stated.

“Our whistleblower program has proven to be a game-changer for the OSC’s enforcement efforts,” said CEO/chairperson Maureen Jensen. “This would not be possible without courageous individuals willing to come forward and provide valuable information about harm to Ontario’s capital markets.”