OTTAWA -- The federal government introduced sweeping corporate fraud legislation yesterday in an attempt to reassure jittery investors after a barrage of international corporate scandals. Justice Minister Martin Cauchon also brought in a bill promising tougher penalties for companies found negligent in the injury or death of an employee -- a long-awaited response to the 1992 Westray mine disaster in Nova Scotia, where 26 miners died.

The anti-fraud legislation would toughen rules on insider trading, making it a federal crime punishable by up to 10 years in prison under the Criminal Code.

It would also raise maximum sentences for white-collar crimes, and make it illegal for companies to punish whistle-blowers who expose corporate wrongdoing.

"Today we are sending a strong message that the government of Canada will not tolerate capital-markets fraud," Cauchon said.

"Capital-markets fraud hurts everyone. It can have a devastating impact on the investments and the retirement savings of all Canadians and it can even threaten the security of our financial markets."

The move comes after allegations of fraud, insider trading and improper accounting practices over the past two years shook financial markets around the world, among them at U.S.-based Enron and WorldCom.

To help with enforcement, the government announced creation of six special investigation teams dedicated to financial-markets fraud cases.

The Integrated Market Enforcement Teams (IMETs), made up of RCMP investigators, federal lawyers and other experts, will be introduced in The teams will be based in the financial districts of Toronto, Vancouver, Montreal and Calgary, but will investigate white-collar crime across the country.

Key measures of the new bill include:

- Creating a new Criminal Code offence of improper insider trading that would target employees of corporations and others who use privileged information to benefit themselves. The measure complements existing provincial rules and attaches a new criminal stigma to insider trading.

- Protecting employees who report unlawful conduct within their corporation. Punishing or threatening such whistle-blowers would carry a maximum sentence of five years in prison.

- Raising maximum sentences for fraud offences and establishing aggravating factors to assist courts in determining appropriate sentences.

The so-called Westray bill would make it easier for companies to face criminal-negligence charges if they fail to protect the safety of workers.

Responsibility for employee safety would be extended to lower-level supervisors.