On April 23, 2019, the Canadian Radio-television and Telecommunications Commission (CRTC) imposed a $100,000 penalty on Mr Brian Conley for violations of Canada’s anti-spam legislation (CASL).  This penalty marks the first time that an individual has been held vicariously liable under CASL for violations committed by a corporation.

Mr Conley was the president and CEO of multiple corporations operating under various business names, notably nCrowd, Teambuy, DealFind, and Dealathons (collectively, nCrowd).  These companies operated under the same business model. They offered promotional vouchers for products or services at discounted rates to be redeemed by consumers from third-party suppliers. These offers were advertised to Canadians, without consent, through frequent email campaigns.

Complaints to the Spam Reporting Centre prompted an investigation by the CRTC which uncovered a complex corporate network and business pattern characterized by acquisitions, foreclosures and bankruptcies allowing each new company to continue the business of the former company without assuming the former company’s liability. As a result of these circumstances, specifically the fact that the companies involved were only briefly operational then quickly dissolved or otherwise ended, the CRTC elected to pursue nCrowd’s corporate directors through vicarious liability in order to encourage future compliance.

The CRTC found that nCrowd violated CASL paragraphs by sending, permitting, or causing Commercial Electronic Messages to be sent to electronic addresses without consent and without a functioning unsubscribe mechanism. The CRTC also found that Brian Conley acquiesced in these violations, while he was the President and Chief Executive Officer (CEO) of the nCrowd companies.  Accordingly, the CRTC held Mr Conley vicariously liable for nCrowd’s violations and the $100,000 penalty.

Summary By: Jae Morris

E-TIPS® ISSUE

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