We may have to change the name of the documentary. At very least it is turning into several stories of interest, with different information streams.
Class actions are being mentioned at every turn we take.
As we interview industry people, ex-industry people, clients, ex-clients, regulators, ex-regulators, journalists, politicians, wanna-be politicians..........one theme keeps repeating itself:
1. The system is busted up pretty bad, and needs repair.
2. Those who are responsible for it's condition are not about to be the ones to repair it.
3. Lawyers, class actions, huge penalties and similar amounts of shame and disclosure are likely to descend upon various aspects of the industry if what many people say is true.
We are currently in Toronto, but have meetings scheduled back in Saskatchewan, Alberta, British Columbia with more of the above.
Too much to describe. Too much to even grasp right this minute, but I will try and update what I can when I can. Thanks to all those stand up people who truly "stand up" and make thier voice heard about the types of financial abuse we are witness to. Elder abuse. Client abuse.
Abuse of any kind is the responsibility of every single one of us. If any one of us were to stand by without standing up when someone is being abused, I think we would have some serious work to do on ourselves.
The film is starting to be a who's who of people that not only "stand by", during financial abuse, but manage to profit from financial abuse of the public.
film at eleven
Saturday, July 08, 2006
Saturday, June 24, 2006
FREE RIDER PASSPORT
further to the last post where I hinted at a free ride Passport system being already in place and already failing to protect the public interest.......................
(by the way, if you can obtain a copy of FREE RIDER, by John Lawrence Reynolds, you may never trust the Canadian financial system again. No it is not a consiracy theory book, no it is not fiction and no I am not shitting you when I say this)
but I digress
I checked on the OSC web page at
http://www.osc.gov.on.ca/Regulation/Orders/ord_index.jsp
and found out just how many PASSPORT type orders etc, that all thirteen of our securities teams have co-operated on
The number of rulings, orders, exemptions to deadlines, exemptions to securities law, etc, etc etc, amounted to SIXTY FOUR listed under the letter A alone, in the year 2004 alone.
If I mathematically extrapolate how many fall under the entire alphabet, for the last ten or so years I come up with a zillion. They may or may not all be Passport approval situations, but enough of them are to ensure that we are being misled by provincial commissions and or ministers when they say a passport system is a new solution. It is not new, and it is not a solution. Unless we want to continue to have our top securities police in each province still able to sleep on the job and be paid for it.
below is the actual exemption that all canadians deserve a royal commission on:
IN THE MATTER OF
NATIONAL INSTRUMENT 81-105
MUTUAL FUND SALES PRACTICES
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
ASSANTE CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of of British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Nunavut, the Yukon, and Northwest Territories (the "Original Jurisdictions") and Saskatchewan and Quebec (collectively with the Original Jurisdictions, the "Jurisdictions") have received an application from Assante Corporation (the "Filer") on behalf of itself and its current and future affiliated distributors and their respective representatives from time to time for a decision under section 9.1 of National Instrument 81-105 Mutual Fund Sales Practices ("NI 81-105") that the prohibitions on certain rebates contained in section 7.1 of NI 81-105 shall not apply to rebates paid by representatives to clients who are switching from third party products to mutual funds managed by, or by an affiliate of, the Filer;
http://www.osc.gov.on.ca/Regulation/Orders/2004
(by the way, if you can obtain a copy of FREE RIDER, by John Lawrence Reynolds, you may never trust the Canadian financial system again. No it is not a consiracy theory book, no it is not fiction and no I am not shitting you when I say this)
but I digress
I checked on the OSC web page at
http://www.osc.gov.on.ca/Regulation/Orders/ord_index.jsp
and found out just how many PASSPORT type orders etc, that all thirteen of our securities teams have co-operated on
The number of rulings, orders, exemptions to deadlines, exemptions to securities law, etc, etc etc, amounted to SIXTY FOUR listed under the letter A alone, in the year 2004 alone.
If I mathematically extrapolate how many fall under the entire alphabet, for the last ten or so years I come up with a zillion. They may or may not all be Passport approval situations, but enough of them are to ensure that we are being misled by provincial commissions and or ministers when they say a passport system is a new solution. It is not new, and it is not a solution. Unless we want to continue to have our top securities police in each province still able to sleep on the job and be paid for it.
below is the actual exemption that all canadians deserve a royal commission on:
IN THE MATTER OF
NATIONAL INSTRUMENT 81-105
MUTUAL FUND SALES PRACTICES
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
ASSANTE CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of of British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Nunavut, the Yukon, and Northwest Territories (the "Original Jurisdictions") and Saskatchewan and Quebec (collectively with the Original Jurisdictions, the "Jurisdictions") have received an application from Assante Corporation (the "Filer") on behalf of itself and its current and future affiliated distributors and their respective representatives from time to time for a decision under section 9.1 of National Instrument 81-105 Mutual Fund Sales Practices ("NI 81-105") that the prohibitions on certain rebates contained in section 7.1 of NI 81-105 shall not apply to rebates paid by representatives to clients who are switching from third party products to mutual funds managed by, or by an affiliate of, the Filer;
http://www.osc.gov.on.ca/Regulation/Orders/2004
documentary shockumentary
here i sit in toon town. saskatoon to be exact. nice place, very pretty, modern, kind of a calgary without the stressed out SUV drivers, smaller, kinder, slower, and with trees. And that river flowing through town. Wow! Simply beautiful.
Sad that I am here to find out if toon town is home to the country's most desperately greedy financial salespeople. All the signs point to one firm. I got a return phone call from a former worker at that firm today, and it felt like many were in on the pork fest at client expense.
What pork fest?
Well it begins with an application in 1999 for an investment firm to bypass a little securities law. The law is on something called commission rebating, and it is intended to protect clients. It prevents investment firms from paying extra incentives and or kickbacks to clients to incent them to buy crap they would not ordinarily buy.
Extra incentives are usually given to salespersons, and kickbacks to clients to unload dead stock on clients, and by dead stock I am not talking cattle. I am talking about proprietary mutual funds or other less than competitive investment products, but products which make the owners of the firm rich if they can unload them on clients.
The original crime is obvious. Well not obvious, actually, it is quite carefully hidden. But once it is out in the open it becomes obvious to anyone who looks at it.
The backup crime then becomes whether or not the self regulatory agencies will catch this and punish it. Anyone familiar with the industry knows that the self regulators are really and truly trade and lobby groups for the industry, so the answer to this is a definite NO. Whether MFDA, IFIC, IDA, or whatever they are called, the public interest is SOL and the industry is AOK.
Then in steps the crime fighting crew at the provincial securities commissions, right?
Right?.............................................................Hello? Is this mike on?...........................
Turns out the crime fighting crew at the provincial securities commissions have been sleeping at the switch like a late night guard at the water treatment plant. They have a number of "problems", facing them that might make it "difficult" for them to "engage properly". Such as??
problem numero uno: They, ah, how do I put this delicately? They "delegate" all matters of IDA or MFDA involvement down to the self regulator. Let me be clear on this. The provincial securities commissions, of which we have some thirteen in Canada, and people at them earn in excess of a half million dollars a year..........they do not act on the securities act, but delegate many matters to self appointed, self serving, self regulators. Well, not totally self appointed, but these self regulators only have jurisdiction over membership, education requirements, etc., etc. Stuff like that. They DO NOT have authority over, under, or inside the Securities Act of each province. So how do the provincial commissions justify delegating securities act violations to the self regulator? Ask them yourself. They will amaze you at the amount of obfuscation available to their lawyers.
problem number two: There is the small matter of the local commission having GRANTED this firm the legal exemption that allowed them to increase client accounts by some mill...............................sorry, scratch that last line and replace it with, GRANTED this firm the legal exemption that allowed them to increase thier firm's share value to hundreds of millions.
So why would provincial securities police, charged with protecting and serving the public do such a thing you ask? Keep asking? Not one of the gang of thirteen I asked have spoken publicly about it. When I walked into Justice Minister Frank Quennell's office this week, he jumped up to pump my hand like I was a voter. When I broached the subject of my visit, which was, "Frank, why won't the head of your securities agency (David Wild) answer questions on this, and why does he refer me to a lawyer instead of replying? What are these guys trying to hide?"..............well he kind of shriveled up and sank away from me like I was the antichrist.
It felt like I was in school, except I was the principal this time, and he was the poorly behaved child. In my scenario it was always the child who knew he had behaved poorly, but did not have the maturity, or the good sense to admit it, and start to make everything "all better". Instead the child does the Bill Clinton defense of Deny, Deny, Deny, not knowing what else to do. I actually felt sorry for him, watching him squirm. So the entire thing may have actually been inadvertantly CAUSED by the securities commission, in an unwitting and ironic (read PASSPORT) kind of way.
Third little problemo: is the fact that provincial securities commissions are desperately trying to hang onto highly paid employment, despite having been caught sleeping on the job more than once. With the top guys paid over $500,000 per year in several provinces, it comes as no surprise that they feel Canada is better served by having them around. If word gets out that they are useless at investor protection...........and in fact they have become rather incestuous with the industry they regulate......well, anything could happen. They may have to go back to working inside the industry, which is another reason they are soft on anything industry related.
Related to problem number three is the issue of a Niagra-on-the-lake meeting with Frank of saskatchewan, some ministers of finance, some minsters of justice, all those in charge of provincial securities commissions.............to help decide how to "institute" a solution that will allow all those provincial guys to keep their jobs. "Jeez, guys, cant we all co-operate, and maybe approve each others work or something? Lets call it a "passport" system or something, so it sounds as if we are doing something new."
The problem with a "passport" system, where all the commissions will reduce the burden of having to comply with useless paperwork in thirteen jurisdictions...........thirteen jurisdictions in an economy the same size as that of Texas.............................this problem is compounded by the fact that they already have this passport in place. It is called a "free ride passport", and it is exactly what happened with the commission rebating exemption in saskatchewan. As I was talking to Frank, Minister of Justice of Sask, and he was trying as hard as he could to "wish" me out of his office, he gave me the excuse that, "we did not initiate that approval, it was initiated in another province". Yup, I had to give it to him, he was fast. Frank was trying to avoid millions of dollars of damage to thousands or tens of thousands of clients under his care by saying "johnny did it", or perhaps the analogy is better put that, "johnny did it first".
I said, " at the beginning and the end of the day, you still have YOUR department approving something that they now refuse to answer to. How it could possibly be in the public interest".
He said he would "look into it", and get back to me. I can hardly wait.
I got a funny answer from the Alberta Securities Commission. Well, not an answer so to speak, but more of a "go screw yourself". What else would I expect from an agency that spent $1.2 million dollars of industry money (did I mention that our securities commissions, as well as the self regulators are funded by industry?), simply to legally fight whether or not they should be subject to audit by the government auditor??? These guys are not hiding a thing!
So the score is securities commissions thirteen, and public accountability zero.
Talk to your MLA, and ask them if they will find an answer to the burning question?
"In what possible public interest would our provincial securities commission find it to grant a commission rebating exemption to one single investment firm, so they could turn client accounts over to proprietary products (move the dead stock)??"
If they can bodge together an answer for this one, ask them if there was any follow up, or any process to ensure the client protective conditions on this approval were followed up on or investigated?
I intend to ask as many as I can put myself in front of.
Better yet, ask an opposition party to start asking, no demanding answers to these questions.
I will keep you posted on the process and the progress as I go along.
cheers
larry
Sad that I am here to find out if toon town is home to the country's most desperately greedy financial salespeople. All the signs point to one firm. I got a return phone call from a former worker at that firm today, and it felt like many were in on the pork fest at client expense.
What pork fest?
Well it begins with an application in 1999 for an investment firm to bypass a little securities law. The law is on something called commission rebating, and it is intended to protect clients. It prevents investment firms from paying extra incentives and or kickbacks to clients to incent them to buy crap they would not ordinarily buy.
Extra incentives are usually given to salespersons, and kickbacks to clients to unload dead stock on clients, and by dead stock I am not talking cattle. I am talking about proprietary mutual funds or other less than competitive investment products, but products which make the owners of the firm rich if they can unload them on clients.
The original crime is obvious. Well not obvious, actually, it is quite carefully hidden. But once it is out in the open it becomes obvious to anyone who looks at it.
The backup crime then becomes whether or not the self regulatory agencies will catch this and punish it. Anyone familiar with the industry knows that the self regulators are really and truly trade and lobby groups for the industry, so the answer to this is a definite NO. Whether MFDA, IFIC, IDA, or whatever they are called, the public interest is SOL and the industry is AOK.
Then in steps the crime fighting crew at the provincial securities commissions, right?
Right?.............................................................Hello? Is this mike on?...........................
Turns out the crime fighting crew at the provincial securities commissions have been sleeping at the switch like a late night guard at the water treatment plant. They have a number of "problems", facing them that might make it "difficult" for them to "engage properly". Such as??
problem numero uno: They, ah, how do I put this delicately? They "delegate" all matters of IDA or MFDA involvement down to the self regulator. Let me be clear on this. The provincial securities commissions, of which we have some thirteen in Canada, and people at them earn in excess of a half million dollars a year..........they do not act on the securities act, but delegate many matters to self appointed, self serving, self regulators. Well, not totally self appointed, but these self regulators only have jurisdiction over membership, education requirements, etc., etc. Stuff like that. They DO NOT have authority over, under, or inside the Securities Act of each province. So how do the provincial commissions justify delegating securities act violations to the self regulator? Ask them yourself. They will amaze you at the amount of obfuscation available to their lawyers.
problem number two: There is the small matter of the local commission having GRANTED this firm the legal exemption that allowed them to increase client accounts by some mill...............................sorry, scratch that last line and replace it with, GRANTED this firm the legal exemption that allowed them to increase thier firm's share value to hundreds of millions.
So why would provincial securities police, charged with protecting and serving the public do such a thing you ask? Keep asking? Not one of the gang of thirteen I asked have spoken publicly about it. When I walked into Justice Minister Frank Quennell's office this week, he jumped up to pump my hand like I was a voter. When I broached the subject of my visit, which was, "Frank, why won't the head of your securities agency (David Wild) answer questions on this, and why does he refer me to a lawyer instead of replying? What are these guys trying to hide?"..............well he kind of shriveled up and sank away from me like I was the antichrist.
It felt like I was in school, except I was the principal this time, and he was the poorly behaved child. In my scenario it was always the child who knew he had behaved poorly, but did not have the maturity, or the good sense to admit it, and start to make everything "all better". Instead the child does the Bill Clinton defense of Deny, Deny, Deny, not knowing what else to do. I actually felt sorry for him, watching him squirm. So the entire thing may have actually been inadvertantly CAUSED by the securities commission, in an unwitting and ironic (read PASSPORT) kind of way.
Third little problemo: is the fact that provincial securities commissions are desperately trying to hang onto highly paid employment, despite having been caught sleeping on the job more than once. With the top guys paid over $500,000 per year in several provinces, it comes as no surprise that they feel Canada is better served by having them around. If word gets out that they are useless at investor protection...........and in fact they have become rather incestuous with the industry they regulate......well, anything could happen. They may have to go back to working inside the industry, which is another reason they are soft on anything industry related.
Related to problem number three is the issue of a Niagra-on-the-lake meeting with Frank of saskatchewan, some ministers of finance, some minsters of justice, all those in charge of provincial securities commissions.............to help decide how to "institute" a solution that will allow all those provincial guys to keep their jobs. "Jeez, guys, cant we all co-operate, and maybe approve each others work or something? Lets call it a "passport" system or something, so it sounds as if we are doing something new."
The problem with a "passport" system, where all the commissions will reduce the burden of having to comply with useless paperwork in thirteen jurisdictions...........thirteen jurisdictions in an economy the same size as that of Texas.............................this problem is compounded by the fact that they already have this passport in place. It is called a "free ride passport", and it is exactly what happened with the commission rebating exemption in saskatchewan. As I was talking to Frank, Minister of Justice of Sask, and he was trying as hard as he could to "wish" me out of his office, he gave me the excuse that, "we did not initiate that approval, it was initiated in another province". Yup, I had to give it to him, he was fast. Frank was trying to avoid millions of dollars of damage to thousands or tens of thousands of clients under his care by saying "johnny did it", or perhaps the analogy is better put that, "johnny did it first".
I said, " at the beginning and the end of the day, you still have YOUR department approving something that they now refuse to answer to. How it could possibly be in the public interest".
He said he would "look into it", and get back to me. I can hardly wait.
I got a funny answer from the Alberta Securities Commission. Well, not an answer so to speak, but more of a "go screw yourself". What else would I expect from an agency that spent $1.2 million dollars of industry money (did I mention that our securities commissions, as well as the self regulators are funded by industry?), simply to legally fight whether or not they should be subject to audit by the government auditor??? These guys are not hiding a thing!
So the score is securities commissions thirteen, and public accountability zero.
Talk to your MLA, and ask them if they will find an answer to the burning question?
"In what possible public interest would our provincial securities commission find it to grant a commission rebating exemption to one single investment firm, so they could turn client accounts over to proprietary products (move the dead stock)??"
If they can bodge together an answer for this one, ask them if there was any follow up, or any process to ensure the client protective conditions on this approval were followed up on or investigated?
I intend to ask as many as I can put myself in front of.
Better yet, ask an opposition party to start asking, no demanding answers to these questions.
I will keep you posted on the process and the progress as I go along.
cheers
larry
Tuesday, March 07, 2006
whistleblower experience
I got a call from J today. He is moving out of his house due to his obsession with the crimes he has seen and the total inability of the regulatory agencies to get involved. They all choose to look the other way, rather than get involved in a fight with a multi million dollar company. I guess they value the paycheque too much.
I personally think and hope that criminal charges for breach of trust will be in order for those offiicials who have abrogated thier duties for the sake of safety and convenience.
His move is another blow in the process of being witness to clients being abused by financial predators. Our financial system allows for "self regulation", which can sometimes mean "no regulation". It can mean that financial firms police themselves, or have a self appointed lobby group police them. Both cause a not so healthy overdose of the "see no evil", syndrome.
Clients get abused first for thier money, by the predators of the industry. Then they get abused again by the refusals of the self regulators to recognize and punish the financial abuse, then again by the government agencies who are charged with overseeing it all. Government agencies defer all inquiry to the trade association and wash hands of it.
Then, if ones complaint gets as far as the RCMP, they will either not have a clue about financial matters, or refuse to get involved if the firm is large and powerful enough. Some (RCMP) will even refuse involvement without an "invitation to investigate" by securities regulators.
In this case the securities regulators are now on paper as having given the firm a free ride around securities law, so they have themselves become suspects in assisting, aiding and abetting. This is going to make a great book some day.
If after all this, an honest man is not driven to insanity, he is stronger than I. When one whistleblower came up on this kind of bureaucratic failure and indifference he took his own life. Number two has been jailed, humiliated, and treated like a criminal himself. Where will it end? I will do my best to keep taking notes.
I personally think and hope that criminal charges for breach of trust will be in order for those offiicials who have abrogated thier duties for the sake of safety and convenience.
His move is another blow in the process of being witness to clients being abused by financial predators. Our financial system allows for "self regulation", which can sometimes mean "no regulation". It can mean that financial firms police themselves, or have a self appointed lobby group police them. Both cause a not so healthy overdose of the "see no evil", syndrome.
Clients get abused first for thier money, by the predators of the industry. Then they get abused again by the refusals of the self regulators to recognize and punish the financial abuse, then again by the government agencies who are charged with overseeing it all. Government agencies defer all inquiry to the trade association and wash hands of it.
Then, if ones complaint gets as far as the RCMP, they will either not have a clue about financial matters, or refuse to get involved if the firm is large and powerful enough. Some (RCMP) will even refuse involvement without an "invitation to investigate" by securities regulators.
In this case the securities regulators are now on paper as having given the firm a free ride around securities law, so they have themselves become suspects in assisting, aiding and abetting. This is going to make a great book some day.
If after all this, an honest man is not driven to insanity, he is stronger than I. When one whistleblower came up on this kind of bureaucratic failure and indifference he took his own life. Number two has been jailed, humiliated, and treated like a criminal himself. Where will it end? I will do my best to keep taking notes.
Monday, February 13, 2006
"The IDA is a private organization and can set its own rules.""...the IDA is not an arm of the government. We are not acting as an agency or a delegate of the securities commission." Brian Awad, IDA Legal Counsel
Now the Sask Financial Services Commission has ruled that the IDA does not have the statuatory authority to levy fines on brokers who have departed the industry. It appears that everyone is now willing to distance itself from the IDA now that they have spent all credibility they once had.
The MFDA will not consider merging with them and rightly so. They have had to vote recently to split apart their conficting and contrary roles of industry trade association and industry regulator, before pressure from a more informed public, media and legislators forced them completely out of business.
It is yet to be seen is similar pressure will force the provincial securities commissions out of business, in favor of a better system of one national regualtor Canada-wide. A new regulator might also be more cognizant of the need for investor protection from a rather strongly armed industry. The provincial commissions are in my opinion guilty of delegating (wrongly) all IDA investment firms matters to the IDA itself. This is a bit like convincing the local police to recognize the local biker gang, as a "self regualtory agency", and legitimizing them further by referring all public complaints about biker gang crime, over to the same people.
The commissions have been making this exact mistake for years, and doing it with rather feeble or non-existant legislation to back them up. They get away with it in the same way the ASC gets away with total dysfunction. There is simply no watchdog. They feel they are above the law.
The SFSC decision that they do not have proper statuatory authority supports this. It will be a matter of time before law suits, and perhaps breach of trust criminal charges are considered against "self appointed, self serving regulators", and those government agencies who let them impersonate regulators to thier own personal gain.
Now the Sask Financial Services Commission has ruled that the IDA does not have the statuatory authority to levy fines on brokers who have departed the industry. It appears that everyone is now willing to distance itself from the IDA now that they have spent all credibility they once had.
The MFDA will not consider merging with them and rightly so. They have had to vote recently to split apart their conficting and contrary roles of industry trade association and industry regulator, before pressure from a more informed public, media and legislators forced them completely out of business.
It is yet to be seen is similar pressure will force the provincial securities commissions out of business, in favor of a better system of one national regualtor Canada-wide. A new regulator might also be more cognizant of the need for investor protection from a rather strongly armed industry. The provincial commissions are in my opinion guilty of delegating (wrongly) all IDA investment firms matters to the IDA itself. This is a bit like convincing the local police to recognize the local biker gang, as a "self regualtory agency", and legitimizing them further by referring all public complaints about biker gang crime, over to the same people.
The commissions have been making this exact mistake for years, and doing it with rather feeble or non-existant legislation to back them up. They get away with it in the same way the ASC gets away with total dysfunction. There is simply no watchdog. They feel they are above the law.
The SFSC decision that they do not have proper statuatory authority supports this. It will be a matter of time before law suits, and perhaps breach of trust criminal charges are considered against "self appointed, self serving regulators", and those government agencies who let them impersonate regulators to thier own personal gain.
Tuesday, January 03, 2006
From Gomery to...........investments
It occurs to me that Gomery told the tale of a cancerous level of corruption that spread from the Liberal party out into the industry of advertising. Now I feel we are seeing a tale of a cancerous corruption within the investment industry that perhaps has spread to the government.
The investment industry corruption is many orders of magnitude larger in dollar size and in damage to the public and the country. Peoples money has been used as pawns in financial games that the pro's play. Trust has been abused. Credibility has been spent.
Whether we look deeply into the:
1. income trust issues, (issues of investor suitability, or issues of inside information leaked to those in priviledge)
2. mutual fund abuses like double dipping, DSC self dealing, the corporate lottery of proprietary funds,
3. or basic simple issues like, does your advisor owe you a duty of care and trust or are you on your own or are you in a buyer beware relationship? Does industry owe you an accurate explanation of this?
4. Does your industry even owe you an accurate explanation of what an "advisor" is, and what professional duty they owe you?
When we look carefully into any or all of these and other issues, we find an industry bent on greed, bent of serving itself regardless of the advertising and ethics promises made. Don't believe me? Pick up a copy of THE NAKED INVESTOR, read any newspaper, check out the Small Investor Protection Association at sipa.ca.
Other sites of interest include http://www.investorvoice.ca/, one of the best resources in Canada to shed light on what the industry actually does. Not what they say they do, but what their behavior has given us.
Finally, if you still need convincing, go to http://www.canlii.org/ site of the Canadian Legal Information Institute and type in any investment company by name in the search box. You might be surprised to find dozens, if not hundreds of legal actions underway against any bank or institution. Does this mean they are guilty of anything? No, but where there is smoke, somone better be at very least checking for fire.
Which leads us to the firemen of the country's financial institutions. First line of defense is the Provincial Securities Commissions. When I spoke to a senior investigator at the BCSC about a 90 year old Kelowna man who lost his home to an RBC broker in 2004, they did not want anything to do with it, telling me to, "take it to the IDA". When I informed him politely that some people who know the system feel that the IDA is more of a trade body than a regulator, his reply was "that is how it works".
The problems at the Alberta Securities Commission could perhaps fill a book. My experience with them certainly gives me the impression that they are a dysfunctional organization that at the very least, have no clue or connection to thier role of investor protection. At the very worst they are nothing but industry rubber stamping puppets.
The Sask Financial Services Commission, was faced with 142 pages of testimony by former investment employee Kent Shirley about allegations of wrongdoing he was witness to during his eight years in the business. They chose to refer the file to the OSC, for reasons only they can justify. The employee was left high and dry, his evidence was seized by the very person he complained against (using hundreds of thousands worth of legal muscle), his defense of himself was prohibited by overhanded court orders barring him from even speaking to police or authorities about his complaints. When this occured (it appears) the SFSC dropped his file like a hot potato, saying it was an Ontario problem. The OSC (Ontario) said it was not thier problem. The employee killed himself the next month, and we still have no "competent" inquiry that I know of into his allegations of wrongoing. Wrongdoing, which if true contains abuses of Canadians of an "Enron" size. One other person who dared to speak about the case spent ten days in jail in Calgary this past December. That is how inneffective the SFSC has turned out to be.
The Ontario Securities Commission could probably do with a good book about them as well. Between collecting salaries well over $500,000 at some levels of the commission, doing little to nothing for average members of the investing public, turning a blind eye to the Kent Shirley death and allegations, and turning away legal complaints to a self appointed industry trade organization.....................well, where does one stop the catalogue of failures to serve the public interest?(by the way, in the whistleblower death mentioned in the paragraph above, the OSC was the initial securities commission that granted the firm involved an exemption around the laws against "commission rebating" that was subsequently practiced on many many clients according to the allegations. What are securites regulators doing granting firms the right to go "around the law" to make more money?
Turning to the IDA (Investment Dealers Association) go back to http://www.investorvoice.ca/ if you need a refresher on the IDA, who they are, what they do and what they do not do. Do not go to the IDA web site, as there you will find them talking with a rather forked toungue. Forked from trying to sell two conflicting stories to the public. Story one (where they started) was that of in industry dealers association, much like the Calgary Auto Dealers Association. They were created to protect and preserve the interests of the industry, like any trade association. They even are registered in Ottawa with the Federal government as a lobby group representing the investment industry.
Story two is less clear. Somehow, without clarity to this writer when and how, they "became" annointed as an industry self regulatory agency. Meaning what? They have agreed to grant themselves ability to register, vet, supervise and kick out members as they see fit. They also claim responsibility for standards of behavior of their members. Again, just like your local auto dealers group, although both could probably be guilty of doing much of this with the real motivation of making entry into their business more difficult for newcomers and thus make business a bit easier for themselves.
How they turned this smoke and mirror show into having provincial securites commissions and others actually believing that they were a credible regulator is anyone's guess. I still have yet to have my questions on this answered, and the IDA itself is on record as saying they have nothing legally to offer as a regulator.
See IDA official quotes below from investorvoice.ca.
"The IDA is a private organization and can set its own rules.""...the IDA is not an arm of the government. We are not acting as an agency or a delegate of the securities commission." Brian Awad, IDA Legal Counsel
"First, let's get the facts straight. The only legislative power the provincial governments "delegate" to the IDA is registration of brokers -- and even that is only delegated in B.C., Alberta and Ontario. The provincial governments do not "delegate" securities industry compliance and enforcement." Paul C. Bourque, IDA SVP., Member Regulation, "Penalties needed", Financial Post November 1, 2004
It is like these guys have talked their way into a mormon dance, because they know there are pretty girls inside. How they have continued to fool everyone up to and including the RCMP, IMET commercial crime guys is beyond me. Perhaps, now that they have involved themselves in an insider trading problem (Income trusts) during and involving an election, perhaps this will be the trigger that allows a clear look into these and other parts of the Canadian financial system. It is a system that badly needs a good checkup. It is a system that is so riddled with the cancer of corruption and self dealing that either the patient needs to be shot and put out of her misery, or some farily radical, and aggressive treatments are required.
I look forward to a positive outcome.
investor advocate
http://www.investoradvocates.ca/
investoradvocate@shaw.ca
The investment industry corruption is many orders of magnitude larger in dollar size and in damage to the public and the country. Peoples money has been used as pawns in financial games that the pro's play. Trust has been abused. Credibility has been spent.
Whether we look deeply into the:
1. income trust issues, (issues of investor suitability, or issues of inside information leaked to those in priviledge)
2. mutual fund abuses like double dipping, DSC self dealing, the corporate lottery of proprietary funds,
3. or basic simple issues like, does your advisor owe you a duty of care and trust or are you on your own or are you in a buyer beware relationship? Does industry owe you an accurate explanation of this?
4. Does your industry even owe you an accurate explanation of what an "advisor" is, and what professional duty they owe you?
When we look carefully into any or all of these and other issues, we find an industry bent on greed, bent of serving itself regardless of the advertising and ethics promises made. Don't believe me? Pick up a copy of THE NAKED INVESTOR, read any newspaper, check out the Small Investor Protection Association at sipa.ca.
Other sites of interest include http://www.investorvoice.ca/, one of the best resources in Canada to shed light on what the industry actually does. Not what they say they do, but what their behavior has given us.
Finally, if you still need convincing, go to http://www.canlii.org/ site of the Canadian Legal Information Institute and type in any investment company by name in the search box. You might be surprised to find dozens, if not hundreds of legal actions underway against any bank or institution. Does this mean they are guilty of anything? No, but where there is smoke, somone better be at very least checking for fire.
Which leads us to the firemen of the country's financial institutions. First line of defense is the Provincial Securities Commissions. When I spoke to a senior investigator at the BCSC about a 90 year old Kelowna man who lost his home to an RBC broker in 2004, they did not want anything to do with it, telling me to, "take it to the IDA". When I informed him politely that some people who know the system feel that the IDA is more of a trade body than a regulator, his reply was "that is how it works".
The problems at the Alberta Securities Commission could perhaps fill a book. My experience with them certainly gives me the impression that they are a dysfunctional organization that at the very least, have no clue or connection to thier role of investor protection. At the very worst they are nothing but industry rubber stamping puppets.
The Sask Financial Services Commission, was faced with 142 pages of testimony by former investment employee Kent Shirley about allegations of wrongdoing he was witness to during his eight years in the business. They chose to refer the file to the OSC, for reasons only they can justify. The employee was left high and dry, his evidence was seized by the very person he complained against (using hundreds of thousands worth of legal muscle), his defense of himself was prohibited by overhanded court orders barring him from even speaking to police or authorities about his complaints. When this occured (it appears) the SFSC dropped his file like a hot potato, saying it was an Ontario problem. The OSC (Ontario) said it was not thier problem. The employee killed himself the next month, and we still have no "competent" inquiry that I know of into his allegations of wrongoing. Wrongdoing, which if true contains abuses of Canadians of an "Enron" size. One other person who dared to speak about the case spent ten days in jail in Calgary this past December. That is how inneffective the SFSC has turned out to be.
The Ontario Securities Commission could probably do with a good book about them as well. Between collecting salaries well over $500,000 at some levels of the commission, doing little to nothing for average members of the investing public, turning a blind eye to the Kent Shirley death and allegations, and turning away legal complaints to a self appointed industry trade organization.....................well, where does one stop the catalogue of failures to serve the public interest?(by the way, in the whistleblower death mentioned in the paragraph above, the OSC was the initial securities commission that granted the firm involved an exemption around the laws against "commission rebating" that was subsequently practiced on many many clients according to the allegations. What are securites regulators doing granting firms the right to go "around the law" to make more money?
Turning to the IDA (Investment Dealers Association) go back to http://www.investorvoice.ca/ if you need a refresher on the IDA, who they are, what they do and what they do not do. Do not go to the IDA web site, as there you will find them talking with a rather forked toungue. Forked from trying to sell two conflicting stories to the public. Story one (where they started) was that of in industry dealers association, much like the Calgary Auto Dealers Association. They were created to protect and preserve the interests of the industry, like any trade association. They even are registered in Ottawa with the Federal government as a lobby group representing the investment industry.
Story two is less clear. Somehow, without clarity to this writer when and how, they "became" annointed as an industry self regulatory agency. Meaning what? They have agreed to grant themselves ability to register, vet, supervise and kick out members as they see fit. They also claim responsibility for standards of behavior of their members. Again, just like your local auto dealers group, although both could probably be guilty of doing much of this with the real motivation of making entry into their business more difficult for newcomers and thus make business a bit easier for themselves.
How they turned this smoke and mirror show into having provincial securites commissions and others actually believing that they were a credible regulator is anyone's guess. I still have yet to have my questions on this answered, and the IDA itself is on record as saying they have nothing legally to offer as a regulator.
See IDA official quotes below from investorvoice.ca.
"The IDA is a private organization and can set its own rules.""...the IDA is not an arm of the government. We are not acting as an agency or a delegate of the securities commission." Brian Awad, IDA Legal Counsel
"First, let's get the facts straight. The only legislative power the provincial governments "delegate" to the IDA is registration of brokers -- and even that is only delegated in B.C., Alberta and Ontario. The provincial governments do not "delegate" securities industry compliance and enforcement." Paul C. Bourque, IDA SVP., Member Regulation, "Penalties needed", Financial Post November 1, 2004
It is like these guys have talked their way into a mormon dance, because they know there are pretty girls inside. How they have continued to fool everyone up to and including the RCMP, IMET commercial crime guys is beyond me. Perhaps, now that they have involved themselves in an insider trading problem (Income trusts) during and involving an election, perhaps this will be the trigger that allows a clear look into these and other parts of the Canadian financial system. It is a system that badly needs a good checkup. It is a system that is so riddled with the cancer of corruption and self dealing that either the patient needs to be shot and put out of her misery, or some farily radical, and aggressive treatments are required.
I look forward to a positive outcome.
investor advocate
http://www.investoradvocates.ca/
investoradvocate@shaw.ca
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