Self-Incrimination And Settlement Agreements

Misconduct in the securities industry can give rise to both criminal and regulatory liability. One problem that arises from this overlap is the potential for state-compelled self-incrimination. In the criminal context, an accused person is not a compellable witness. In the securities context, the situation is the opposite. An investigated person can be compelled to give incriminating evidence against themselves. Such testimony is generally protected from use in any subsequent criminal proceedings by the operation the Canadian Charter of Rights and Freedoms.

One area of continued controversy is the impact of entering into a settlement agreement with a securities regulator. Does an investigated member who settles give up their right to protection against self-incrimination?