Joven Narwal was interviewed by Lexpert Magazine for their article, “Pandemic Fuels White Collar Crime”. Mr. Narwal’s commentary from the article is extracted below:
Joven Narwal of Narwal Litigation in Vancouver has “deep concerns” about whistleblowing programs, which he believes are ineffective “in the war on money laundering.”
First, he says, they only reward the reporting of misconduct after it’s happened. Second, research has suggested that financial incentives may decrease whistleblowing. And third, the programs “create a strong incentive to provide false or misleading information.”
But securities regulators investigate whistleblowers’ reports, Fuerst says. “The bigger concern I see for corporations is the risk that information about potential internal wrongdoing gets reported to the regulator first, rather than internally.”
Privacy and constitutional litigation
Narwal, who specializes in white-collar crime and financial misconduct, is concerned that “government intrusion does pose a very real threat to our daily lives.” Information on suspected wrongdoers is collected and disclosed through various techniques that are not subject “to any real quality control at the collection level.” When people share suspicious transactions with the Canada Revenue Agency, he says that this may spark costly investigations of innocent people.
He notes a steady increase of orders to freeze assets, where no one has made allegations, and the use of compulsion powers that are not judicially authorized to seize private communications. Narwal has launched constitutional challenges to both issues – the freezing of assets and the seizure of private communications – and is concerned that public outcry over money laundering will cause damage through the use of unjustified state intrusions.
“I think that those concerns to some extent need to be addressed within the politics of lawmaking over white-collar crime and money laundering,” Narwal says; “however, it’s going to be left to the bar to litigate the constitutionality of many of these proposals.”
He has already seen many changes to search-and-seizure techniques used in capital markets, he says. British Columbia also created mandatory minimum sentences under its Securities Act, even though the Supreme Court of Canada has found these to be unconstitutional. He also sees constitutional concerns in the cross-border context, especially between Canada and the United States.
“Given the extensive cooperation between Canadian and foreign regulators, I anticipate that the concern which often materializes over what use can be made in the foreign jurisdiction of compelled testimony or compelled processes in Canada will very much come to the forefront.”
One issue arising with increasing frequency, particularly given changes to the U.S. anti-money laundering regime, is the enforceability in Canada of subpoenas issued under the U.S. legislation without a corresponding mutual legal assistance treaty request, he says.
“Why do you need compliance programs? Because if you are offside, you’re at risk of class actions that are hooking onto the statutory infractions.”
To read the full article, please visit Lexpert Magazine.