The Ontario Securities Commission has appointed former Difference Capital Financial Inc. executive Jeff Kehoe as its new enforcement director, overseeing the regulator’s high-profile division responsible for investigating securities violations.
Mr. Kehoe has a long background in Canada’s regulatory community but spent the past three years in the private sector, part of it working for entrepreneur Michael Wekerle, co-founder of publicly traded merchant bank Difference Capital.
OSC chair Maureen Jensen said the experience gave Mr. Kehoe an opportunity to learn about securities regulation from the other side of the fence at a regulated company.
“I think a couple of years out, it gives you more perspective,” Ms. Jensen said in an interview. “And he certainly got more hands-on experience with managing in the corporate environment, so I think that experience will definitely just add to his already significant experience in running enforcement.”
Mr. Kehoe replaces Tom Atkinson, who resigned as enforcement director in March to join the Securities and Futures Commission of Hong Kong. Mr. Kehoe was not available for comment Monday on his new appointment.
Mr. Kehoe spent 12 years at Canada’s brokerage industry regulator, the Investment Industry Regulatory Organization of Canada, where he was head of enforcement from 2010 to 2013. He began his career as a Crown attorney in Toronto and later worked as litigation counsel for the federal justice department before joining IIROC in 2001.
Mr. Kehoe left the regulatory world to join Difference Capital in 2013 as managing partner and general counsel, but departed a year later in April, 2014. The firm said it had “amicably parted ways” with Mr. Kehoe. He later returned to Difference Capital, however, to advise on legal and compliance issues, staying for another year until July, 2015, a month after Mr. Wekerle resigned as CEO of the firm.
“He’s a curious guy, which is the first attribute you need to run enforcement, and he was also very connected to many of the people who were at Difference Capital,” Ms. Jensen said.
“I think it was a bit of an eye-opening experience for him but he’s certainly grown a lot and I think coming back now he’s going to have even more of an opportunity to make a difference right at the head of the organization.”
Ms. Jensen worked closely with Mr. Kehoe at IIROC, where she was senior vice-president of surveillance and compliance before joining the OSC in 2011.
Mr. Kehoe’s background in criminal prosecutions before joining IIROC was a draw for the OSC, Ms. Jensen said. The commission has launched a joint serious offences team that works with the RCMP and OPP to investigate criminal matters relating to the securities sector.
“This is a very important role here and we wanted somebody who is not only comfortable in the enforcement arena in the securities area, but also somebody who has a criminal background and really understands what it’s like to prosecute in the court system,” she said.
Mr. Kehoe has also served as a director of Ontario Place, a public parkland space under redevelopment in central Toronto, and is chair of the board of Ontario Capital Growth Corp., which oversees the Ontario government’s interests in three venture capital funds.
Mr. Kehoe, who joins the OSC on Oct. 11, will oversee 140 people in the enforcement division.
His appointment comes as the OSC is also preparing for the launch of a new federal-provincial securities regulator, which has a launch date of 2018. Ms. Jensen said the pending shift to a new regulator will not stop the OSC from moving forward with new initiatives.
“Nothing’s on hold. We’re going full steam because the whole way this move to the national regulator is being managed is that the existing organizations just move in and become part of a bigger entity, so everything we’re doing gets pooled in the new regulator.”
Mr. Kehoe’s appointment was announced the same day the OSC disclosed a high-profile departure from its ranks.
Kelly Gorman, chief of the OSC’s new Office of the Whistleblower, is leaving less than three months after the initiative launched in July. the program promises to pay up to $5-million to members of the public who provide tips on serious enforcement violations.
Ms. Gorman will become vice-president of a new regulatory and standards branch at accounting overseer Chartered Professional Accountants Canada. Heidi Franken, currently manager of the whistle-blower office, will take over the top role as chief.
Ms. Jensen said Ms. Gorman’s departure will not delay the launch of the whistle-blower program because Ms. Franken worked from the beginning with Ms. Gorman on the design and launch of the new organization and can step easily into the top job.
“She will be able to move forward without missing a beat,” Ms. Jensen said. “We’ll make sure that it’s fully staffed, and Heidi has been involved every step of the way from branding to case selection, she’s been involved with all of it. So we’re not going to miss anything.”