GOVERNMENT OF CANADA REINSTATES LEGISLATION
TO DETER CAPITAL MARKETS FRAUD

OTTAWA, February 12, 2004 - The Minister of Justice and Attorney General of Canada, Irwin Cotler, today announced the reinstatement of proposed legislation in the House of Commons that would target capital markets fraud.

"Corporate criminals not only jeopardize the savings and investments of Canadians, but undermine confidence in the integrity of the markets as well," said Minister Cotler. "In the wake of recent American corporate scandals, the Government of Canada is determined to provide further protection against capital markets fraud - for consumers, as well as the employees who report it."
The proposed amendments would:

• Create a new Criminal Code offence of improper insider trading that would target employees of corporations and others who use privileged information not available to other investors in order to benefit themselves;
• Protect employees who report unlawful conduct within their corporation from retaliation by creating a new offence to deter employment-related intimidation;
• Raise maximum sentences for existing market-related offences and establish aggravating factors to assist the courts in determining a sentence that reflects the seriousness of the crime;
• Establish concurrent jurisdiction, based on a partnership approach guided by protocols, that would provide federal prosecutorial authority for cases that threaten the national interest in the integrity of our capital markets and thus provide additional resources in regard to these cases; and
• Add production orders to the Criminal Code, which would enhance the evidence-gathering tools available to investigators for all criminal offences by allowing them to obtain pertinent documents or data from third parties within a specified time period.

These reforms would provide new tools to strengthen the ability of the recently established Integrated Market Enforcement Teams (IMETs) to detect, prosecute and deter serious capital markets fraud. These teams are made up of RCMP investigators, forensic accountants and lawyers in key financial centres across the country. Two IMETs were launched in Toronto in November 2003 and one in Vancouver in December 2003. Additional teams in Toronto, Calgary and Montreal are being created.

An online version of the proposed legislation is available at www.parl.gc.ca..

- 30 -

Ref.: