Canada’s financial intelligence unit has issued the largest administrative monetary penalties in its history. In total, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) issued 12 Notices of Violation in the amount of more than $26m. This came with disclosure of the largest number of cases of non-compliance to law enforcement for potential criminal investigation in the unit’s history.

FINTRAC has published its 2023–24 Annual Report, Safe Canadians, Secure Economy, which describes the integrity of Canada’s financial system and the steps the regulator is taking to protect investors, particularly vulnerable ones.

The Centre’s financial intelligence disclosures contained 297,733 financial transaction reports, which included 966,705 financial transactions. And 92% of the feedback that FINTRAC received from domestic law enforcement and national security agencies indicated that its financial intelligence provided new information.

Not to be outdone, the Canadian Investment Regulatory Organization (CIRO) also published its report that looks back on the organization’s efforts to protect investors from unfair, improper and fraudulent practices.

FINTRAC’s activity

As Canada’s financial intelligence unit and anti-money-laundering and anti-terrorist-financing supervisor, FINTRAC ensures the compliance of more than 24,000 businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and generates actionable financial intelligence for Canada’s law enforcement, national security agencies and international partners. The report listed the following noteworthy metrics for 2024:

• The top three predicate offences related to FINTRAC’s financial intelligence disclosures in 2023–24 were drugs (23%), fraud (20%) and tax evasion (10%).
• FINTRAC issued 12 Notices of Violation in the amount of more than $26m.
• The agency disclosed 14 cases of non-compliance to law enforcement for criminal investigation.
• FINTRAC supported 266 major, resource intensive investigations last year, and many hundreds of other individual investigations at the municipal, provincial and federal levels across the country and internationally, the report noted.
• FINTRAC worked with its European allies to share financial intelligence through the Russia-Related Sanctions and Illicit Finance Financial Intelligence Units Working Group.
• The Centre also worked closely with the US Financial Crimes Enforcement Network and Mexico’s Unidad da Inteligencia Financiera to establish the North American Drug Dialogue’s Illicit Finance Working Group.
• Using its new Digital Strategy, FINTRA is advancing Centre-wide digital automation, analytics and the use of artificial intelligence to stay competitive in the technical arena.

Speaking about protecting Canadians in the money laundering and terrorist financing arenas, Sarah Parquet, Director and CEO of FINTRAC, said this in the report: “Working with our domestic and international partners, we are also moving forward with our real-time modernization vision so that we can stay ahead of the bad actors, find new and meaningful ways to collaborate and continue to deliver results for Canadians in an ever-changing world.”

CIRO’s Enforcement Report

CIRO also published its Enforcement Report for the fiscal year 2024, which includes the efforts of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA).

Some highlights from its report are:

• Most of the complaints received by CIRO relating to investment dealers came from the Complaints and Settlement Reporting System (ComSet), a tool used by IIROC to collect information about certain events involving dealer members (1,154) and from the public at large (142), while only 19 came from “other,” which included media, dealer members and whistleblowers.
• The most prevalent allegation in investment dealer cases was unsuitable investments (22%), followed by supervision (21%) and unauthorized and discretionary trading (14%).
• Cases against mutual fund dealers similarly came largely from ComSet (1,896) and the public (87).
• The mutual fund dealers mainly faced allegations of unsuitable investment (26%), plus unauthorized discretionary trading (11%) and misrepresentation (7%).
• For all of CIRO, cases mainly involved registered firms (94%), but individuals were charged in 15% of cases, up from 10% in FY23.