Jocelyne Robidoux
9-2210 Walnut St.
Thunder Bay, Ontario
P7C 1L1 (807)623-0160
jocelyne_robidoux@yahoo.com
May 18, 2005
Mr. David Brown
Chairman, OSC
Suite 800, Box 55
20 Queen Street West
Toronto, Ontario M5H 3S8
Dear Mr. Brown:
I wish to express my sincere disgust with your department’s dismissal of serious allegations against Assante. Based on my experience with the Mutual Fund Dealers Association (“MFDA”) and its conflict of interest issues, and the fact that the Saskatchewan Financial Services Commission has limited resources, I’m assuming these regulators will not proceed further. I know that there exists overwhelming evidence against this company for its widespread practice of converting third party funds to its more profitable proprietary product. Did you comb through all those boxes of evidence? Did you question witnesses who also worked at Assante and were familiar with its practices? I didn’t think so. You conducted your investigation much like the Manitoba Securities Commission (“MSC”) handled my case in 2002.
I am a former Assante client who was a victim of the company’s fund conversion, in my situation without my consent which is illegal and yet appears to be ignored by regulators. I represented myself in a civil suit against my advisor and Assante through the Court of Queen’s Bench of Manitoba in 2003 after the MSC closed my file. I believe I was successful in proving my claims while the MSC seemed unable to find sufficient proof to charge Assante. My case also involved unregistered trades, confirmed by the Ontario Securities Commission (“OSC”) and again ignored by the MSC.
The trades in my case occurred at the same time as the trades in cases by the OSC, the Alberta Securities Commission (“ASC”) and the British Columbia Securities Commission against Assante/Summit Aurum, when the company was promoting and selling its in-house funds. The OSC settled with Assante in November 2003 for unregistered trading by over 152 advisors. No penalties were assessed. Were in-house funds involved? Were the trades authorized? What were the resulting client losses? If these issues were not investigated, is it fair to conclude that your department is negligent or incompetent or maybe more likely, that certain companies are immune
to legal action? Regulators appear to have unwritten agreements with their corporate cohorts to ignore complaints possibly to protect each others interests.
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Despite a history of allegations from former advisors, journalists, investor advocates and
investors, Assante has never been severely disciplined. The apparent enforcement problems at
the OSC sound eerily similar to those reported by whistle-blowers at the ASC. A brave young man who was very aware of Assante’s tactics died trying to expose the truth. Shame on you for allowing his efforts and his death to be in vain. It’s not surprising that you once said, “We don’t give awards to whistle-blowers.” You treated this “truth-teller” much like you treated a Hollinger whistle-blower a few years ago. The OSC has a tendency to act when forced to do so by its American counterpart. Unfortunately, investors cannot rely on the U.S. Securities Exchange Commission to take action against Assante as it did with Hollinger.
I did not sign a gag order when I settled with Assante. I’m not done speaking out against Assante and our regulatory bodies who continue to allow corruption to grow in the Canadian financial markets. A foreign journalist once commented that, “the Canadian stock markets are the most manipulated and controlled in the civilized world and that the only reason any experienced foreign investor puts money into Canada is to launder it.” You people are doing more damage to our financial system by protecting instead of disciplining the perpetrators just as poor parents would foolishly let their children do as they please and make society pay for their unruly behavior. In his book, The Naked Investor, John Reynolds refers to a “highly respected academic” who described the OSC as “probably the most poorly governed securities regulator among those of the OECD… countries.”
The OSC announced in the Toronto Star on May 13, 2005 that it was encouraging consumers to report wrongdoing in the industry. I find it interesting and timely that the article was released within days of the OSC announcing an end to its Assante investigation. Please explain how you plan to prosecute corporate crooks based on tips from anonymous sources while you disregard cases with heaps of incriminating documents and testimony from credible witnesses who you never bother to contact during your so-called investigations.
The OSC mandate is to “provide protection to investors from unfair, improper and fraudulent practices.” Your department has not only failed to protect investors but has actually promoted “fraudulent practices.” In April 1999, the OSC approved Assante’s request to convert clients’ third party funds to its proprietary funds and then neglected to monitor and enforce compliance. If mass class action suits are ever filed by investors and huge losses are uncovered, who should be liable? What will the OSC’s defense be after shirking its responsibilities and ignoring repeated warnings of corruption at Assante. What if numerous “truth-tellers” finally come forward having been inspired by the ASC whistle-blowers? The OSC claims it “recognizes the importance of setting an example in the areas of transparency and effective governance.”
A fine example you turned out to be!
Very sincerely,
Jocelyne Robidoux
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Cc: Mr. James McCarter Joanne Fallone
Office of the Auditor General of Ontario Manager, Case Assessment, OSC
20 Dundas Street West Suite 800, Box 55
Suite 1530, Box 105 20 Queen St. West
Toronto, Ontario M5G 2C2 Toronto, Ontario M5H 3S8
Hon. Gerry Phillips Michael Hornbrook
Chair, Ontario Management Board of Cabinet CBC Fifth Estate
12th Floor, Ferguson Block P.O. Box 500, Station A
77 Wellesley St. West Toronto, Ontario M5W 1E6
Toronto, Ontario M7A 1N3
Hon. Coulter Osborne Linda Leatherdale
Integrity Commissioner, Ontario Business Editor, Toronto Sun
Suite 1803 333 King Street East
415 Yonge Street Toronto, Ontario M5A 3X5
Toronto, Ontario M5B 2E7
Gerald Lafreniere, LL.B. Michael Watson
Clerk, Standing Senate Committee on Banking, Director, OSC
Trade & Commerce, Senate of Canada Suite 800, Box 55
40 Elgin Street, Room 1039 Chambers Building 20 Queen St. West
Ottawa, Ontario K1A 0A4 Toronto, Ontario M5H 3S8
Hon. Michael Bryant Larry Waite
Attorney General of Ontario CEO, MFDA
803 St. Clair Avenue W. 121 King Street West, Suite 1000
Toronto, Ontario M6C 1B9 Toronto, Ontario M5H 3T9
Douglas Brown David Wild
Director, MSC . Chairman, SFSC
1130-405 Broadway Avenue 6th Floor, 1919 Saskatchewan Drive
Winnipeg, Manitoba R3C 3L6 Regina, Saskatchewan S4P 3V7
Amanda Downs Joe Canavan
Investigator, OSC CEO, Assante Corporation
Suite 800, Box 55 320 Bay Street, Suite 1100
20 Queen St. West Toronto, Ontario M5H 4A6
Toronto, Ontario M5H 3S8
