Speaking to the Law Society of Upper Canada yesteray, Tom Atkinson, chief executive of Market Regulation Services Inc., stressed the importance of proper disclosure, and called on executives to cooperate.
In his address to the Directors and Officers Liability Conference, Atkinson noted that “prudent, balanced and honest disclosure is necessary”, and that co-operation with RS can prevent corporate directors and officers from getting into trouble.
He suggested that directors and officers are being held to higher levels of accountability. “In our world of equities trading regulation, we are targeting directors and officers who clearly failed their compliance role,” Atkinson said.
Compliance challenges are also neverending for corporate officers, particularly in light of new legislation that allows shareholders to sue for improper secondary market disclosure.
To ensure that issuers don’t fall afoul of their obligations, Atkinson suggested: they have written disclosure policies; there should be a clear decision-making process on when to disclose material information; there should also be a policy on news releases. “Our market surveillance officers vet all material news releases for clarity, accuracy and tone to ensure the release is factual and balanced. But you are still responsible for the content,” he noted.
He also suggested that counsel to senior management, should not advise executives to say nothing to RS. “When RS calls, take the call,” he said. “You are obliged to speak candidly and to be forthcoming with information.” Atkinson warned that if it suspects a corporate officer is lying it will be on the phone to Mike Watson, director of enforcement at the Ontario Securities Commission. “So it’s important to build a good reputation of disclosure, and a relationship with us that is based on honesty and integrity.”
RS head urges corporate officers to co-operate with regulators
Written disclosure policies can help prevent problems
- By: James Langton
- October 25, 2005 October 25, 2005
- 15:20