Investor Presentaiton

The Autorité faces the same type of legal difficulties in its collaboration with the Integrated Market Enforcement Team (IMET) 15. However, it plans to exchange resources with the IMET in FY 2006-2007 "to increase collaboration and ensure a better understanding of how it operates 16." Questions 5. Does the exchange of information and better cooperation with the law enforcement community help to improve investor protection? 6. Is it necessary to amend current laws to improve the information exchange among regulatory bodies and auditing firms? 7. Should there be legislative amendments so that the police departments can effectively use the evidence gathered by regulatory bodies, particularly with respect to its admissibility before the courts? 3.3. Investor compensation 3.3.1 Investor compensation in the United States There is no fund to compensate investors against securities fraud in the United States, although it is estimated to range from USD $10-40 billion a year ¹7. However, the Securities Investor Protection Corporation (SIPC) has offered coverage against insolvency since 1970 that protects investors in the event a full service brokerage firm goes bankrupt. Brokerage firms that specialize in mutual fund distribution are excluded from this coverage. Article 308 of the Sarbanes-Oxley Act provides for compensating the victims of securities law violations through the Federal Account for Investor Restitution, or FAIR Fund. This fund can refund to investors the money recovered from civil penalties and disgorgement. The court decides whether to impose an administrative penalty and the amount demanded. For example, insider trading is subject to a maximum fine of three times the illegal gain. 15 16 The Canadian government created the IMET in the wake of the Enron and Worldcom accounting scandals. It is composed of investigators and other specialists, including lawyers, accountants, forensic accountants, and IT professionals. The IMET's mission is to prevent and detect financial frauds perpetrated by companies whose capitalization is large enough to disturb investors' confidence in the financial markets. AUTORITÉ DES MARCHÉS FINANCIERS, Mémoire préparé dans le cadre des travaux préliminaires (brief drafted during the preliminary work), p. 45 17 According to the Federal Trade Commission (FTC) and the Federal Bureau of Investigation (FBI) Consultation paper Page 15

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