Okay. The reason we don't have it in French is that we were only invited on Thursday of last week. Unfortunately, we had a very short period of time to prepare. Otherwise, I certainly would have liked to make that available.
On Friday, November 20, 2009, PricewaterhouseCoopers released its global economic crime survey, and it determined that Canada is the fourth most fraudulent country out of 54 countries. The countries that were ahead of us and deemed more fraudulent were Russia, South Africa, and Kenya. Just behind us was Mexico and the Ukraine. This new study is quite alarming, though it's not a surprise to those of us who have worked in the investment business and who have worked with a substantial number of victims of white-collar crime in Canada.
At the moment, I'm working with the Nortel long-term disabled and the pensioners and the severed workers. As many of you are aware, the Nortel situation began as a result of allegations of accounting fraud and the executives being preoccupied first with manipulating the books and then needing to correct the books, and taking their eye off the ball in this rapidly changing industry. The victims of white-collar crime are therefore not only investors, the shareholders and the creditors of corporations, or seniors that are defrauded by unlicensed advisers. The victims of investment fraud can also be the employees of companies that are unable to turn themselves around after they have been the subject of fraud.
On September 15, Hugh Urquhart and I, the United Senior Citizens of Ontario Inc., and the National Pensioners and Senior Citizens Federation attended a media conference in the Charles Lynch Room here in Ottawa, calling for a crackdown on white-collar crime. The nine victim groups who participated in that conference were the ABCP Retail Owners Committee, the Nortel Bankruptcy Justice Committee, the Norshield Victim Group, the Earl Jones Victims Organizing Committee, the Shire Victims Committee, the Norbourg Victims Committee, the Progressive Management Victims Committee, and the Mount Rea Victims Committee. All nine of these victim groups came to Ottawa to request stiffer sentences for white-collar crime. In addition, they called for a minimum sentence period of two years, and they also called for a longer period before which a white-collar fraudster could make an application for parole, from the one-sixth that is in place today.
Basically, these victim groups indicated at the time the intention to file Bill C-52 was announced that they supported the general provisions of the bill.
Personally, as an independent financial analyst who has worked in the investment industry and has worked extensively both in the courtroom and outside of the courtroom with white-collar crime victim groups, I agree with the general thrust of the bill.
I do agree with the two-year minimum sentencing for offences that are collectively over $1 million. I think Ken will tell you in a moment that there is some confusion as to whether that applies to a single person defrauded of $1 million, or whether it is cumulatively applicable to all offences and all persons or corporations that are affected. I believe the intent of the law is the correct one. It's the accumulation of the losses that are borne by all of the parties that are impacted by the white-collar fraud.
We particularly like the provision that makes reference to extenuating circumstances leading to a judge being more likely to give a higher sentence if the persons defrauded are in personal circumstances where they were able to be taken advantage of because of age, health, and financial situation.
I agree it is important to take into account whether the rogue adviser is licensed or not. I would note, however, having spent a career in the investment business and as one who specializes in systemic fraud in products that are distributed by the licensed financial advisers of Canada, that this should not be an intent to imply that because you are unlicensed you would likely be a worse offender of the Criminal Code than if you were licensed. I can certainly say that through my experience in working with income trusts and working with asset-backed commercial paper, and as we have seen in the subprime market of the United States and in the abuses in the credit default swap market, there is systemic fraud in the licensed financial industry as well.
I want to note that the stiffer sentencing in the Criminal Code is not the only answer. It's important for deterrence, in my opinion, and those who work in the investment industry tend to be significant members of their communities. So if there is going to be a minimum jail sentence, there's no question, in my mind, that this will be of greater deterrence than for someone to be given sentencing that would involve community service or simple probation. So I do support the minimum two years as being a significant deterrence for people who commit financial fraud.
I want to move to a view I have that there is significant restructuring required in the enforcement systems of Canada. In addition to the National Securities Commission, which is being put forward by the federal government, we think it's critical that there be a restructuring of securities crime policing in Canada. I believe we need to move to a system where the Royal Canadian Mounted Police integrated market enforcement team is not the effective exclusive enforcer of the Criminal Code as it relates to financial fraud cases.
We believe we need to do a restructuring. My colleague Gary Logan is going to describe the nature of the restructuring that is required to improve the effectiveness of securities crime policing in Canada so that there are more investigations taking place, more successful prosecutions, and a greater ability for the Criminal Code to be used for the purpose of deterrence. But the sentencing, you would all know, is not the answer itself. You need to have successful prosecutions in the courtroom.
I'll make a final note with respect to the RCMP, which I believe is going to make presentations after us. It's my view that the RCMP should not be moving forward with a model of integrating its enforcement activities as a division of the National Securities Commission.
I attended a function last week and it has already been on the public record that the Investment Industry Association of Canada and the Canadian Coalition for Good Governance are seeking to have criminal police become a division of the new National Securities Commission, and I strongly recommend against such a model. Even in the RCMP, in policing activities today as it applies to financial fraud.... We have a letter from the head of the RCMP that indicates that no RCMP unit commander can initiate a financial fraud investigation into possible fraud that has taken place within the investment industry until they have had an approval to proceed with that investigation from a joint consultation group. The joint consultation group is made up of the self-regulatory organizations of the investment dealer industry and of the Mutual Fund Dealers Association. I put forward to you that no other democratic country, in my opinion, would have a financial fraud enforcement function. Criminal investigations require the approval of the self-regulatory organizations of the industry that is being investigated.
So I strongly recommend that the current practice of requiring the self-regulators to approve financial fraud investigations by the RCMP be terminated immediately. We also recommend that the National Securities Commission not be given the authority, under the new Securities Act or any other provision, to be the enforcement body that is administering the Criminal Code of Canada.
Thank you.