Wiretaps have proven an extremely useful tool for ferreting out insider-traders in the U.S. That may be why Canadian authorities are so eager to have them at their disposal, as well.
Canada's largest securities regulator, the Ontario Securities Commission, wants its own investigators to be permitted to use wiretaps to investigate illicit trading, its chairman said yesterday, as the U.S. Federal Bureau of Investigation does. As in the U.S., the OSC would not be listening in itself; instead, provincial and federal police would do the tapping in cooperation with the regulator.
"In my opinion, we are missing a key tool that would assist in more effectively enforcing provisions against insider trading," OSC Chairman Howard Wetston said. "Wiretaps would allow us to obtain direct evidence of the intention—I underline intention—to engage in illegal insider trading and tipping."
While the OSC still requires legislative approval for its plans, it has already begun to discuss the matter with police, Wetston said.
Wiretaps have been a key weapon in the 80 insider-trading convictions won in recent years by prosecutors, including in high-profile cases against Galleon Group founder Raj Rajaratnam and former McKinsey & Co. chief Rajat Gupta. Should the OSC win its approval, it could presage a national wiretapping effort, as the Ontario regulator is set to join that of British Columbia next year in a national securities regulator that Canadian authorities hope may one day replace the country's 13 provincial and territorial regulators.