According to provincial regulations, if the BCSC collects on a fine, the GROSS amount of the collection has to go into a fund for educating investors. 100%. Well-meaning, but it doesn’t work at all. Let’s say the BCSC hired collection agencies, lawyers, or even the Mafia on a 30% contingency basis. That process could be very effective at generating $$$$ and deterring future scofflaws.
So what’s the problem? If those collectors were successful in recovering $100 million, the BCSC would go broke because it would collect $100 million, all of which would have to go into the educational fund, and it would have to pay the collectors $30 million out of its relatively meagre legal budget. Can’t be done.
The higher the fine, the safer the miscreant. The BCSC can’t hire anyone on contingency to go collect. When you see a Financial Post story describing “closing in on $200 million”, you know a lot of guilty parties are laughing.
A conspiracy theorist could say the rules have been set up by crooks to help crooks avoid penalties, but let’s call it “unintended consequences of a well-meaning law”. It’s actually a simple problem that can be solved with a figurative “stroke of the pen”. No rocket science needed.
A change in rules to make the education fund the beneficiary of the NET amount of fines collected would create an immediate and significant problem for the scofflaws.
I’m sure the BCSC would like to see the rules change before it starts handing out penalties to the Bridgemark scammers among others.
Come on, government. Now that you understand the problem, do something about it!