A federal judge in Chicago sentenced fallen media mogul Conrad Black to six and a half years in prison for fraud and obstruction of justice. He must also pay a fine of US$125,000 and forfeit US$6.1 million. Investors aren’t looking for Canadian courts to sentence white-collar criminals as severely as U.S. courts do, according to Michael Watson, director of enforcement at the Ontario Securities Commission. But the 137 Canadian CEOs polled in a survey conducted by Compas Inc. disagreed strongly with that belief.
The majority of business leaders surveyed want our securities regulators to catch fraudsters with greater regularity, and want Canadian courts to impose tougher sentences on white-collar criminals. Canada is no more compassionate than the U.S., the CEOs believe, and Canadians certainly wouldn’t complain if lengthier prison sentences were handed down. In a previous Compas poll, some respondents indicated that our weak securities laws also act as a deterrent to foreign investment. “We have world class companies and world class executives. It is a shame that we are considered an easy country [in which] to get away with fraud,” wrote one respondent.
The CEOs were also asked to grade the effectiveness of certain mechanisms in place for making Canada a safe haven for investors. Our securities laws in general received a grade of 57%, while the OSC received 53%. The U.S. Securities and Exchange Commission fared better with a score of 68%.
Not every CEO agreed with the aggressive approach taken by U.S. authorities, however. “The U.S. is clearly overzealous,” wrote one. “A criminal convicted of aggravated grievous bodily harm will walk away with a lesser sentence than many of those convicted of what I believe to be victimless crimes.”
Even so, the overwhelming sentiment expressed by respondents was one of frustration about the difficulties of catching and convicting white-collar criminals. “A national regulator is needed, but there is no stomach within the political world,” wrote one business leader. “My toothless grandmother can inflict more of a bite.”