On August 21, the Quebec Court of Appeal released its decision in L'Autorité des marchés financiers c. Lacroix, 2009 QCCA 1559 (CanLII) reducing the total jail time to be served by the architect of the Norbourg Asset Management collapse to 5 years less a day. (The decision is only available in French). The AMF is considering whether to appeal the decision.
In December, 2007, Vincent Lacroix, the ex-CEO of Norbourg, was convicted under 50 counts of violating the Quebec Securities Act. 27 of the convictions were for violations of section 195.2 of the Act, which prohibits “influencing or attempting to influence the market price or the value of securities by means of unfair, improper or fraudulent practices.” 8 of the convictions were for making misrepresentations in documents filed with the AMF contrary to subsection 197(4) of the Act, and the remainder concerned misrepresentations in records kept contrary to subsection 197(5).
In addition to fines, the trial judge sentenced Lacroix to 5 years less a day for each of the convictions under section 195.2, to be served concurrently. Lacroix was sentenced to 42 months for each of the violations of subsections 197(4) and (5). The sentences for each subsection were to be served concurrently, but the 42 months for the subsection 197(4) violations was to begin after the sentence for the 195.2 violations had been served and the 42 months for the subsection 197(5) violations was to begin after the sentence for the 197(4) violations had been served. Thus, Lacroix was sentenced to a total of 12 years less a day in prison.
Lacroix appealed to the Superior Court. The Court ruled that all of the sentences for the section 197 violations were to be served concurrently, but following the sentence for the section 195.2 violations, reducing total time served to 8 ½ years. Both Lacroix and the AMF appealed to the Court of Appeal.
Issue 1: Could Lacroix raise the issue of the consecutive sentences on appeal?
In his appeal, Lacroix argued that the court did not have the ability to impose consecutive sentences under the Quebec Code of Penal Procedure. This argument had not been previously made. The Court of Appeal noted that at his trial, he was not represented by counsel. At the Superior Court, his counsel did not object to the consecutive sentences, but rather that his sentences were in each case the maximum allowable, and the result was a penalty that was disproportionate.
The Court ruled that it could entertain a new argument on appeal if it would be unjust not to do so. It also noted that the only issue raised was one of the correct interpretation of the Code, which did not require new facts to be proven.
Issue 2: Could consecutive sentences be imposed?
The Court reviewed the text of the Code. Section 239 provides that “a term of imprisonment is executory upon sentence.” Section 241 states that “subject to articles 350 and 351, where the defendant is already in detention, the judge, in sentencing him to a new term of imprisonment, may order that the terms be served consecutively.”
The Court did a review of the case law and noted that sections 350 and 351 dealt with mandatory consecutive sentences for defaulting on payments while imprisoned. It also reviewed the Code’s predecessor statutes. It interpreted the language of section 241 as meaning where the defendant is already in detention on an unrelated matter. For related matters, a court may only impose consecutive sentences if the legislation specifically allows it.
The Court’s reasoning can be questioned. Section 241 does not specifically require the detention to be for an unrelated matter. The 2 sections referred to (350 and 351) impose mandatory consecutive sentences. In other words, they take away the judge’s discretion to impose concurrent sentences. Given that “[m]ore than 9,000 investors were defrauded of a total of $115 million when Lacroix made a series of illegal transactions” through Norbourg, it’s the Court of Appeal decision that seems to impose a “disproportionate” sentence.