OSC appoints former Ontario auditor general to lead enforcement effort

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Bonnie Lysyk, Ontario’s former auditor general, has been put in charge of enforcement at the Ontario Securities Commission.

She was named executive vice-president of enforcement at Canada’s largest capital markets regulator Monday and will fill the vacancy left by Jeff Kehoe, a seasoned prosecutor who stepped down in February after seven years.

Unlike most past enforcement chiefs at the OSC, Lysyk, an accountant and auditor by training, is not a lawyer. In a statement, the OSC said she would bring to bear her extensive experience leading professional, multi-disciplinary organizations and her in-depth knowledge of audit, finance, risk management, forensics, and governance when it comes to investigating capital markets misconduct and enforcing Ontario securities law.

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“Bonnie is well-positioned to take decisive action against those seeking to harm Ontario’s investors,” said Grant Vingoe, chief executive of the OSC. “She joins, and leads, an impressive group of professionals in our Enforcement Division – united by a passion to protect investors and the integrity of our capital markets.”

Her appointment comes after Vingoe unveiled a new strategic plan in May, promising tougher and more visible enforcement to deal with capital markets misconduct. He  pledged to build the regulator’s reputation as an effective enforcer by vigorously prosecuting serious financial crimes, taking on novel and sophisticated files, and increasing the collection rates for penalties imposed.

The market watchdog operates at arms-length from the Ontario government, but the strategic plan also reflects government goals such as ensuring market players aren’t bogged down by undue burden of regulation.

Lysyk, who before taking on her auditor position in Ontario was provincial auditor of Saskatchewan and deputy auditor general in Manitoba, is not known to pull punches and her appointment to the OSC suggests regulator is keen to distance itself from perceptions of yielding to political whims. Last year, she wrote a report that was extremely critical of Doug Ford’s government for its decision to remove prime land from the protected Greenbelt for real estate development.

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To create that report, she assembled a team that included financial analysts and environmental experts who dug into documents and emails behind the Ontario government’s decision, which had drawn sharp criticism over Ford’s ties to developers and the timing of the decision to remove legal protections from the parcels of land to allow real estate development.

The analysis by Lysyk and her team, released in August 2023, sent shockwaves through the government. It concluded that the lands removed from the Greenbelt in December 2022 “were not chosen using an objective and transparent selection process” and said that there was “no evidence” to support the contention that the protected land was need to reach the government’s goal to build 1.5 million houses over the next 10 years.

In September, the month after Lysyk’s report was published, the Ford government reversed its Greenbelt decision.

In her previous position as Ontario’s auditor general, Lysyk weighed in on the relationship between the government and the OSC, which is supposed to operate independently and impartially. A 2021 audit concluded that the OSC was “vulnerable to political interference,” a situation that risked undermining its operational independence and impartiality, stemming from a 2018 incident in which the finance ministry opposed a new OSC rule governing deferred sales charges on funds. In a follow-up report in 2023, the auditor general said the OSC had made progress to address this situation but the finance ministry had “made little progress” and was continuing to review the auditor general recommendations to preserve the operational independence of the regulator and eliminate perceptions of overt political interference.

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Her appointment to the OSC isn’t the only executive announcement made by the regulator Monday. 

Josée Turcotte, a former executive director at the Office of the Superintendent of Financial Institutions, was named chief operating officer and chief of staff at the OSC, effective Oct. 15. She will oversee business strategy and corporate performance, human resources, strategic project management and information services and security.

Prior to her time at the banking regulator, where she oversaw the emerging risk operations directorate, Turcotte was chief legal officer of the Alcohol and Gaming Commission of Ontario and served as the senior vice-president, corporate secretary and head of governance at the HSBC Bank Canada.

“Josée brings a wealth of regulatory knowledge, experience and strategic acumen and is a skilled leader of diverse teams in the private and public sector,” said Vingoe in a statement. “She has expertly managed major changes in operations with a focus on strengthening organizational culture. Her strategic regulatory, legal and organizational advice will be critical as we embark on our ambitious plan to make Ontario’s capital markets inviting, thriving and secure.”

• Email: bshecter@postmedia.com

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