Fred J. Dunn, FCA, Auditor General of Alberta, released his report today on the Alberta Securities Commission’s enforcement system. On April 13, 2005, the Deputy Premier and Minister of Finance asked the Auditor General to complete his audit of the enforcement system as quickly as possible, and make his report public.
The report identifies significant matters in three areas where the Alberta Securities Commission must strengthen its management control systems and processes for enforcing Alberta’s securities laws.
The enforcement system needs more discipline. Recommendations were made to the Commission to:
Conflict of interest policies are not adequate and employee and Commission Member investment disclosures are not being adequately monitored. Recommendations were made to the Commission to strengthen its conflict of interest policies and to improve its monitoring of employee and Member compliance with the policies.
The report identifies several areas where oversight of the Commission’s activities by Commission members should be improved. Recommendations were made to the Commission to improve the oversight provided by Members for human resources and the enforcement system. Also, a recommendation has been made to the Minister of Finance on the need to establish a lead independent member for the Commission.
Prior to starting his work, the Auditor General became aware of public allegations that the Commission was not consistently enforcing Alberta’s securities laws. Following an examination of numerous case files and interviews with many current and former employees of the Commission, the Auditor General concluded there is not sufficient evidence to recommend to management that any case file examined be re-opened.