section 380(2)

INTRODUCTION AND BRIEF DESCRIPTION

A person commits an indictable offence by inflating public market prices through deceit, falsehood or other fraudulent means.

SECTION WORDING

380(2) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, with intent to defraud, affects the public market price of stocks, shares, merchandise or anything that is offered for sale to the public is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.

EXPLANATION

Section 380(2) of the Criminal Code of Canada is an important provision that is designed to protect the public from fraud and market manipulation. It states that anyone who uses deceit, falsehood, or other fraudulent means to affect the public market price of stocks, shares, merchandise, or anything offered for sale is guilty of a serious crime and can be sentenced to up to 14 years' imprisonment. This provision is essential because it is aimed at deterring market manipulation and fraud, which can have serious consequences for investors, businesses, and the economy as a whole. By criminalizing these activities, the law sends a clear message that such behavior will not be tolerated and those who engage in it will face severe penalties. Furthermore, the provision is intended to protect the integrity of the market and to ensure that it operates fairly and transparently. When people engage in fraudulent behavior to manipulate the market, they undermine the integrity of the system and put the financial security of others at risk. In conclusion, Section 380(2) of the Criminal Code of Canada is an important legal provision designed to protect the public from fraudulent market activities. It sends a clear message that such behavior will not be tolerated and is an essential tool in maintaining the integrity of the market and protecting the financial security of investors and businesses.

COMMENTARY

Section 380(2) of the Criminal Code of Canada is a provision that aims to protect the integrity of the public market and its related financial interests. This section specifically criminalizes fraudulent activities that are designed to affect the public market price of stocks, shares, merchandise, or anything else that's being offered for sale to the public. In the absence of such legal provisions, the general public may become vulnerable to financial losses resulting from fraudulent activities of unscrupulous elements of society. This section of the Criminal Code covers a wide range of conduct that can adversely affect the market price of stocks, shares, or anything that is offered for sale to the public. It includes not only traditional forms of fraud such as deceit, misrepresentation and false statements, but also other forms of fraudulent behavior that may be less obvious, such as insider trading and market manipulation. The Act requires the prosecution to show that the dishonest or fraudulent act was committed with the intent to fraud someone. In other words, it is not enough for the accused person to have merely affected the market price of a specific security or merchandise. The act must be shown to have been done intentionally and with the express purpose of defrauding the public. The potential ramifications of the offense of defrauding the public market are severe. If the prosecution proves its case, the offender may be sentenced to a maximum of fourteen years' imprisonment. The threat of such a significant penalty serves as a strong deterrent and demonstrates the severity with which society takes fraudulent behavior in matters related to the public market. Furthermore, the application of this section of the Criminal Code extends to anyone who is involved in the markets, including insiders, brokers, traders, advisers, as well as regular investors. The application of this section also extends beyond the borders of Canada. Therefore, anyone who engages in fraudulent activity outside of Canada that impacts the Canadian market may also be prosecuted. Section 380(2) of the Criminal Code has played a vital role in protecting investors and market integrity. By holding individuals accountable for engaging in fraudulent behavior related to the public market, the law helps ensure that investors can rely on the accuracy of information used in making investment decisions. Furthermore, the law fosters public confidence in the financial system and ensures a level playing field for all market participants. In conclusion, Section 380(2) of the Criminal Code of Canada is crucial for ensuring the integrity of the public market and investor protection. The provisions act as a deterrent for those considering fraudulent behavior that could negatively affect the market and the people's trust in it. Its broad application to anyone involved in the market provides greater protection for investors, and the heavy penalty serves as a warning to prevent fraudulent activities. Therefore, the continued enforcement of this section should remain a priority in promoting fair and transparent markets in Canada.

STRATEGY

Section 380(2) of the Criminal Code of Canada is a powerful piece of legislation that criminalizes fraud in the public markets. This legislation makes it a crime to manipulate the public market price of stocks, shares, and other types of merchandise through deceit, falsehood, or other fraudulent means. Anyone who violates this part of the Criminal Code is liable to imprisonment for a term up to 14 years. Given the seriousness of this offense, companies and their advisors must exercise caution when engaging in any activity that could result in a violation of this section of the law. One strategic consideration when dealing with this section of the Criminal Code of Canada is to ensure that any information that is being provided to the public is accurate and not misleading. This includes information that is provided in press releases, public statements, and regulatory filings. Companies must also ensure that all material information is disclosed in a timely manner and that there is no hidden agenda behind any public statements. Failure to do so could expose companies to liability under Section 380(2) of the Criminal Code. Another strategic consideration is to ensure that any insider trading is strictly prohibited. Insider trading involves trading securities while being in possession of material non-public information, which can significantly affect the price of those securities. Any individual who engages in insider trading could be liable under Section 380(2) of the Criminal Code. Companies, therefore, need to have robust internal controls in place to prevent insider trading and to ensure that anyone who violates these controls is appropriately sanctioned. A third strategic consideration is to ensure that there is no market manipulation. Market manipulation involves artificially inflating or deflating the price of securities through fraudulent schemes. For instance, it may involve creating bogus orders or engaging in wash trading. Anyone who engages in market manipulation is also liable under Section 380(2) of the Criminal Code. Companies, therefore, need to monitor all trading activities closely to ensure that there is no market manipulation occurring, and if such activities are detected, companies need to take immediate steps to prevent further harm. The strategies that could be employed when dealing with Section 380(2) of the Criminal Code include implementing policies and procedures to prevent fraud. This includes having robust internal controls, such as segregation of duties, to ensure that there is no opportunity for fraudulent activities. Companies should also invest in employee training to ensure that everyone understands the potential risks and the consequences of violating the law. Another strategy is to have a system of regular audits to ensure that all processes are working correctly and that there is no malfeasance. Companies could also hire external consultants to provide an independent assessment of the company's compliance with the provisions of Section 380(2). In conclusion, Section 380(2) of the Criminal Code of Canada is a powerful enforcement tool that protects the public from fraudulent activities in the public markets. Companies must exercise caution when engaging in any actions that could lead to a violation of this law. There are several strategies that companies can use to ensure compliance with the law, including robust internal controls, employee training, regular audits, and hiring external consultants to provide an independent assessment. By employing these strategies, companies can avoid liability under Section 380(2) and maintain their reputation as trustworthy market participants.