In the four months since the announcement that David Wilson would become the new chairman of the Ontario Securities Commission in November, the Bay Street investment banker has been deluged with unsolicited advice from his powerful colleagues.
Their consistent message? Clean up Canada's international image as a Wild West for securities crime and put more big players behind bars.
Mr. Wilson, who heads the brokerage arm of the Bank of Nova Scotia, is making law enforcement one of his top priorities for his five-year term, which begins tomorrow. And the best way to do that, he says, is to see more high-profile people head to jail for their wrongdoing.
He said the six-month jail sentence imposed last Thursday on former investment banker Andrew Rankin is a good start.
"That Rankin decision, that's how you generate deterrence, by broadly showing that the consequences of breach of the rules and illegal behaviour are severe. So you'd better think about it carefully before you cross that line," he said in a recent interview. "And the way to get there is with some actual cases. It's really that simple."
If anyone understands what motivates the Bay Street investment community, it's Mr. Wilson, who is one of its ultimate insiders.
After 35 years with Scotiabank and former brokerage McLeod Young Weir Ltd., he knows the investment industry intimately. Since his new job was announced, he said his friends have approached him to "name names," identifying specific people he should "go get."
His appointment breaks a decades-long tradition of hiring securities lawyers to head the OSC, but Mr. Wilson believes his experience as an insider will bring a new perspective. It's a model already tested in the United States, where the Securities and Exchange Commission has routinely been headed by senior Wall Street executives.
He pledges not to go easy on his former friends and colleagues. Indeed, the 60-year-old says it's important to note that he will retire after leaving the OSC, and not head back into investment banking. That means he will not have an eye on a lucrative exit strategy.
"I know all the people. I know how the system works," he acknowledged.
"But I'm not going back into the industry to work again. This is my last lap around the track, so to speak. So I will be determined to do the right thing for the mandate of the OSC.
"Let me emphasize it: My own code is that I'm not going to bend or be biased in favour of old associates or old institutions I've come to know."
Mr. Wilson is entering a new world, far different from his comfortable corporate tower. The OSC is the public institution everyone loves to hate. When a case is not investigated, investors complain the OSC does too little. When cases are pursued, business insiders complain bitterly about "witch hunts" and argue the OSC is chasing small players over trivial matters while ignoring the real criminals.
For a man who has amassed a personal fortune and is nearing retirement, the biggest surprise is that he wanted the challenge at all. But Mr. Wilson said he was attracted to the idea of making a permanent mark.
"I've been told by my predecessors that it is a fantastically interesting job to have," he said. "So I'm really looking forward to experiencing the excitement of getting involved in things that really matter for the capital markets."
But the difficulties of fulfilling a tough-on-crime mandate are not lost on Mr. Wilson. Previous OSC chairmen have also pledged to get tough, and have found themselves limited by constraints on the OSC's authority and the slow pace of the court system. Mr. Wilson says he will spend his first months in his new job trying to develop a concrete strategy to address the enforcement roadblocks.
He says it will include improving co-ordination of investigations with the RCMP and the Ministry of the Attorney-General in Ontario.
"I really think we have to respond to what the outside world is saying about the imperative for the OSC to be active, aggressive, efficient and timely in enforcement. Everybody thinks it's very important."
Despite the perception that more needs doing at the OSC, Mr. Wilson said the reality is that the commission came "a long way" under previous chairman David Brown. The enforcement division has grown from a staff of 20 to almost 100, and has set up new partnerships with other law enforcement agencies.
Moreover, he is quick to mention past successes, such as the Rankin case, launched under the term of his predecessor. Mr. Rankin was accused of tipping off a friend about pending corporate deals.
"When incarceration is an outcome of using confidential information wrongly, it's going to make some people pause before they cross that line," Mr. Wilson said. "It's a very chilling thing for somebody who wears a nice white shirt and a tie to work every day."
© The Globe and Mail
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