So here it is, April 2011, and I have not updated this for some time. Most of my writings, (or rantings) is posted on facebook now under my name, or inside www.investoradvocates.ca . I have recently added a great deal of industry insider material to the most recent topics, the ones about GETTING YOUR MONEY BACK, and ADVISOR FRUAD etc. In there you will see much of the trail of securities commissions using leagues of lawyers to basically lie their way into the wallets of Canadians. It is a twisted, convoluted journey that I hardly expect anyone to follow, except other lawyers. In fact some of it was prepared and provided to other lawyers who are interested in holding crooks to account.
That is probably my biggest motivation, to see if anyone in Canada can be held to account for about one trillion dollars that I have seen disappear from consumers into the pockets of the trusted fraudsters that we all have to deal with. We have to deal with the big banks, even if they are preying on us, and we have to deal with the current crop of regulators, even if they are helping to violate us financially. I wont even go into the rest of the systemic 'bottom feeders" who support and condone financial violence on Canadians......for money. It will come out.
In the last two years, probably the biggest thing I have seen securities commissions in Canada do to "protect the public interest", is to remove the word "salesperson" from each and every securities act in Canada, and replace it with the word "dealing representative". Follow along the trail at "advisor fraud" topic at www.investoradvocates.ca if you like, but believe me when I say it was "not in the public interest" to do this. It was a blatant exercise in ass covering by securities firms and regulators, who finally got the concept called "BAIT AND SWITCH". That is the illegal practice of telling the public, that they were getting s professional service from an "advisor", when in fact the guy they were hiring was in 99.99% of cases simply registered and licensed as a "salesperson". Holy lawsuits Batman, we have to change this!! It is the first time I have seen securities commissions act so quickly. Anyway, it is on the record (sept 28, 2009 CSA announcements) so lawyers for the public interest will be able to find it and use it to prove the intent of those persons in power who fiddle with the system to suit themselves.
I have to say thanks to our younger population, and thanks to the Egyptian people, for showing us that we can actually stand on our own two feet and demand better from our leaders. It is the weekend before a Federal election in Canada, and it will be very interesting to see how it turns out. For the first time in my life I am seeing Canadians, (yes Canadians) actually stand for something and voice thier concerns. I hope it is a sign of things to come.
We have recently seen the most flagrant theft from the middle class, from the taxayer, and from the economy, in perhaps modern history. I am not aware of such large scale systemic theft (systemic using law, the courts, the regulators, the trusted criminals among us, the politicians) other than some History channel stuff I learned about the Roman empire. An entire, systemic co-operation to stuff as much money as possible into the pockets of the top 1% of rich people, and to sprinkle just enough millions along the way to ensure the co-operation of media, courts, accounting professionals, legal, regulatory, financial, political, whomever. Sorry if I am repeating myself, but I have to look at this and express nothing less than amazement. I have gotten a front row seat at an event where the entire economy has been stolen or skimmed, in an effort to do trillion dollar deals and earn billion dollar fees. What a ride, what a show, what an eye opener.
Gold is at $1500, silver just over $40. US currency is looking less and less credible every moment, but the world is awash in it, so to try and get away from it safely is tricky for most countries. Default is a monthly debate in Congress, needing emergency measures to keep the government from being shut down. Funny, there are millions and millions who feel that shutting down the government might actually make society work a bit better. But, again, there are just under 10 million people employed in the federal govt, so they have to be saved somehow.
The US is spending trillions on war, and that is not helping. Multiple wars. 700 to 1000 military bases around the world. While I was on a beach in Hawaii recently, I got the pleasure of watching very large military aircraft doing practice circuits overhead, in flight training exercises. The thousands and thousands of dollars per hour, (or is it per minute?) to operate just one of these aircraft, was multipled many times that day, by many aircraft, and then again, in many countries, in many parts of the world. Who can pay for that kind of spending? Who can profit from that kind of spendng? Follow the money and you will many crimes against society.
Enough for now. www.albertafraud.com is one "accountability project". Send me the name of a lawyer with courage and social conscience.
www.fraudtalks.com is planned for september in calgary
hopefully, if we are allowed to bring topics of abuse and theft (by our trusted leaders) out into the open, we will learn how to walk like an Egyptian.
cheers
larry
Saturday, April 30, 2011
Saturday, December 25, 2010
Advocis is a national professional association that prepares, promotes and protects financial advisors in the public interest. We do this by providing a professional platform including career support, designations, best practices direction, education, timely information and professional liability insurance. This strengthens the relationship of trust and respect between financial advisors and their clients, the public, and government. The Association’s website is . http://www.advocis.ca.
(advocate comments.......I found this posted recently and thought it deserved a few comments for honesty and clarity:
1. "Advocis is a national professional association" Actually Advocis is "attempting' to appear as a professional association, but is actually a group of life insurance salespeople who are trying to alter their image from "life insurance salespeople" to something other, something with the word "advisor" in it and something to make the public trust them more. A name change more than a substance change. Some might call it marketing spin. Some might even call it misrepresentation.
2. "promotes and protects financial advisors" This would be correct.
3. "in the public interest" This would generally be bull.
4. "strengthens the relationship of trust and respect between financial advisors and their clients, the public, and government" Again, marketing and profits would suggest that getting the public and others to "trust" life insurance sellers, so they can sell more is correct. As far as actually delivering on the honest disclosure and professional standards required to earn this trust, that is quite debatable. The name change is something akin to putting lipstick on the pig, and your financial wellbeing would be best protected by not assuming there is anything behind it other than sales motivation.
(As with all other "self proclaimed" organizations, or those who work their way into self regulation positions, when push comes to shove and they are taken to the supreme court, the customer will learn the hard way that these organizations work 100% for their salespeople members and they "owe no duty of care for the public")
Buyer beware bigtime.
The image on the top is a cover for the Advocis magazine, while the image below is the page with the cover exposed by folding back a half flap to reveal the true motivations, SALES.
Thursday, December 16, 2010
Biggest Defrauder of the Federal Government
This media release took me by surprise and I thought you might like to see it.
FOR IMMEDIATE RELEASE
December 16, 2010
1:16 PM
CONTACT: Public Citizen
Phone: 202-588-1000
Pharmaceutical Industry Is Biggest Defrauder of the Federal Government Under the False Claims Act, New Public Citizen Study Finds
Civil, Criminal Settlements Have Increased Dramatically; Off-Label Promotion Largely Responsible
WASHINGTON - December 16 - The drug industry has now become the biggest defrauder of the federal government, as determined by payments it has made for violations of the False Claims Act (FCA), surpassing the defense industry, which had long been the leader, according to a new Public Citizen study released today.
The study found that pharmaceutical cases accounted for at least 25 percent of all federal FCA payouts over the past decade, compared with 11 percent by the defense industry.
The fraud results were a key finding from a Public Citizen analysis of all major pharmaceutical company civil and criminal settlements on the state and federal levels since 1991 and found that the frequency with which the pharmaceutical industry has allegedly violated federal and state laws has increased at an alarming rate. Of the 165 pharmaceutical industry settlements comprising $19.8 billion in penalties during the past 20 years, 73 percent of the settlements (121) and 75 percent of the dollar amount ($14.8 billion) have occurred during the past five years.
Many of the infractions, and the single largest category of financial penalties, stemmed from the practice of off-label promotion of pharmaceuticals - the illegal promotion of a drug for uses not approved by the Food and Drug Administration (FDA). Off-label promotion can be prosecuted as a criminal offense because of the potential for serious adverse health consequences to patients from such promotional activities. Another major category of federal financial penalties was purposely overcharging for drugs under various federal programs, which constitutes a violation of the FCA.
On the state level, the largest category of financial penalties has come from companies deliberately overcharging state health programs, such as Medicaid. Public Citizen's study found this to be the most common category of violation among state settlements.
The increase in payments for fraud is likely attributable to drug companies engaging in more wrongdoing and better enforcement at the state and federal level, said Dr. Sidney Wolfe, director of the Health Research Group at Public Citizen.
"Desperate to maintain their high margin of profit in the face of a dwindling number of important new drugs, these figures show that the industry has engaged in such activities as dangerous, illegal promotion for unapproved uses of drugs and deliberately overcharging vital government health programs, such as Medicare and Medicaid," said Wolfe. Wolfe compiled and analyzed the data with physicians from the Johns Hopkins General Preventive Medicine program, Drs. Sammy Almashat and Charles Preston, as well as Columbia University public health student Timothy Waterman, all of whom worked at Public Citizen.
Public Citizen's study also found that more than one-half of the industry's fines were paid by just a few companies - GlaxoSmithKline, Pfizer, Eli Lilly and Schering-Plough. These four companies accounted for more than half of all financial penalties over the past two decades, paying $10.5 billion in fines collectively. These pharmaceutical companies were among the largest in the world. The two largest criminal penalties ever assessed by the U.S. government against any companies were against Lilly ($515 million) and Pfizer ($1.2 billion), both in 2009.
To conduct the study, Public Citizen created a database of information about pharmaceutical companies' civil and criminal settlements, including information about the type of alleged violation and the amount of money paid in settlements. This study is the first to attempt to document and analyze all major pharmaceutical company settlements with both federal and state governments, the authors said.
Nationally, former pharmaceutical company employees and other whistleblowers have been instrumental in bringing to light the most egregious violations; they have initiated the largest number of federal settlements in the past decade. The number of federal settlements arising from whistleblower cases has more than doubled over the past five years, yielding total payouts more than two and a half times higher than in the previous 15 years combined.
Needed remedies include imposing steeper financial penalties and criminally prosecuting company leadership, including jail sentences, if merited.
"The danger to public safety and loss of state and federal dollars that comes with these violations require a more robust response," Wolfe said.
To read the full report, visit http://www.citizen.org/hrg1924.
###
Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.
FOR IMMEDIATE RELEASE
December 16, 2010
1:16 PM
CONTACT: Public Citizen
Phone: 202-588-1000
Pharmaceutical Industry Is Biggest Defrauder of the Federal Government Under the False Claims Act, New Public Citizen Study Finds
Civil, Criminal Settlements Have Increased Dramatically; Off-Label Promotion Largely Responsible
WASHINGTON - December 16 - The drug industry has now become the biggest defrauder of the federal government, as determined by payments it has made for violations of the False Claims Act (FCA), surpassing the defense industry, which had long been the leader, according to a new Public Citizen study released today.
The study found that pharmaceutical cases accounted for at least 25 percent of all federal FCA payouts over the past decade, compared with 11 percent by the defense industry.
The fraud results were a key finding from a Public Citizen analysis of all major pharmaceutical company civil and criminal settlements on the state and federal levels since 1991 and found that the frequency with which the pharmaceutical industry has allegedly violated federal and state laws has increased at an alarming rate. Of the 165 pharmaceutical industry settlements comprising $19.8 billion in penalties during the past 20 years, 73 percent of the settlements (121) and 75 percent of the dollar amount ($14.8 billion) have occurred during the past five years.
Many of the infractions, and the single largest category of financial penalties, stemmed from the practice of off-label promotion of pharmaceuticals - the illegal promotion of a drug for uses not approved by the Food and Drug Administration (FDA). Off-label promotion can be prosecuted as a criminal offense because of the potential for serious adverse health consequences to patients from such promotional activities. Another major category of federal financial penalties was purposely overcharging for drugs under various federal programs, which constitutes a violation of the FCA.
On the state level, the largest category of financial penalties has come from companies deliberately overcharging state health programs, such as Medicaid. Public Citizen's study found this to be the most common category of violation among state settlements.
The increase in payments for fraud is likely attributable to drug companies engaging in more wrongdoing and better enforcement at the state and federal level, said Dr. Sidney Wolfe, director of the Health Research Group at Public Citizen.
"Desperate to maintain their high margin of profit in the face of a dwindling number of important new drugs, these figures show that the industry has engaged in such activities as dangerous, illegal promotion for unapproved uses of drugs and deliberately overcharging vital government health programs, such as Medicare and Medicaid," said Wolfe. Wolfe compiled and analyzed the data with physicians from the Johns Hopkins General Preventive Medicine program, Drs. Sammy Almashat and Charles Preston, as well as Columbia University public health student Timothy Waterman, all of whom worked at Public Citizen.
Public Citizen's study also found that more than one-half of the industry's fines were paid by just a few companies - GlaxoSmithKline, Pfizer, Eli Lilly and Schering-Plough. These four companies accounted for more than half of all financial penalties over the past two decades, paying $10.5 billion in fines collectively. These pharmaceutical companies were among the largest in the world. The two largest criminal penalties ever assessed by the U.S. government against any companies were against Lilly ($515 million) and Pfizer ($1.2 billion), both in 2009.
To conduct the study, Public Citizen created a database of information about pharmaceutical companies' civil and criminal settlements, including information about the type of alleged violation and the amount of money paid in settlements. This study is the first to attempt to document and analyze all major pharmaceutical company settlements with both federal and state governments, the authors said.
Nationally, former pharmaceutical company employees and other whistleblowers have been instrumental in bringing to light the most egregious violations; they have initiated the largest number of federal settlements in the past decade. The number of federal settlements arising from whistleblower cases has more than doubled over the past five years, yielding total payouts more than two and a half times higher than in the previous 15 years combined.
Needed remedies include imposing steeper financial penalties and criminally prosecuting company leadership, including jail sentences, if merited.
"The danger to public safety and loss of state and federal dollars that comes with these violations require a more robust response," Wolfe said.
To read the full report, visit http://www.citizen.org/hrg1924.
###
Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.
Thursday, December 09, 2010
"Yes" Men are a Dime a Dozen
I just sat in what one person in the audience called an "infomercial" for the Alberta Law Society. Put on by a very experienced, knowledgable and ethical member of the society, but an infomercial none the less.
His talk repeated the words "in the public interest" enough times to almost make one believe it was intended to make us believe that to be so. It also pointed out to us how "no one is above the law", a point which was scoffed at around our small table of eight very ordinary people.
It came across as a self serving cheerleading session intended to build public support for the idea of lawyers policing lawyers. Or self regulation. I am not an expert on the law society but I am an expert on self regulation and it usually turns out to be a great deal for the industry seeking to police themselves, and a less great deal for the "public interest". That is my own experience. I think of the young finance industry whistleblower who took his own life after learning the hard way that some people "are" more above the law than others. (see www.breachoftrust.ca video chapter six ) He found out the hard way that the law society is actually there more to protect lawyers interests than the public interest. At least that is what I found out when I complained about the lawyer who misled a calgary judge and had him sign off a private search warrant (Anton Piller order) that took away the young man's rights to even talk to police. I am sure the law society did not want that to get out when they dismissed the complaint.
Others at my table had similar feelings, one 70ish lady gave me her favorite quote about the law, which was this, "The law can be used to keep justice away".
Another pointed out the obvious which was that "of course some people are above the law". The speaker had no response to this other than to say his system is not perfect but that it had to strive for perfect ideals.
Then he should have not shown up to mislead us with his infomercial. He could instead of been an honest, candid speaker of the problems, and the initiatives they undertake to try to solve those problems. Instead he appeared as a simple 'talking Yes man" for the industry, rather than attempting to create sound, helpful discourse.
The world already has enough "yes" men. They are the most common human on the planet. When will we see an industry participant who actually questions his industry, questions poor practices, solves self serving issues?
When will we be able to listen to a speaker who has something to say, beyond how great they are, how great their profession is?
What a waste. Still. Nice guy. He just does not even know that he has assigned himself a role, an "actor" if you will, in a stage show where his is more on the side of the problem, instead of being on the side of solution.
below is a link to a 15 year old child who is doing a far better job for society:
http://dailybail.com/home/and-a-child-shall-lead-them.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheDailyBail+%28The+Daily+Bail%29
His talk repeated the words "in the public interest" enough times to almost make one believe it was intended to make us believe that to be so. It also pointed out to us how "no one is above the law", a point which was scoffed at around our small table of eight very ordinary people.
It came across as a self serving cheerleading session intended to build public support for the idea of lawyers policing lawyers. Or self regulation. I am not an expert on the law society but I am an expert on self regulation and it usually turns out to be a great deal for the industry seeking to police themselves, and a less great deal for the "public interest". That is my own experience. I think of the young finance industry whistleblower who took his own life after learning the hard way that some people "are" more above the law than others. (see www.breachoftrust.ca video chapter six ) He found out the hard way that the law society is actually there more to protect lawyers interests than the public interest. At least that is what I found out when I complained about the lawyer who misled a calgary judge and had him sign off a private search warrant (Anton Piller order) that took away the young man's rights to even talk to police. I am sure the law society did not want that to get out when they dismissed the complaint.
Others at my table had similar feelings, one 70ish lady gave me her favorite quote about the law, which was this, "The law can be used to keep justice away".
Another pointed out the obvious which was that "of course some people are above the law". The speaker had no response to this other than to say his system is not perfect but that it had to strive for perfect ideals.
Then he should have not shown up to mislead us with his infomercial. He could instead of been an honest, candid speaker of the problems, and the initiatives they undertake to try to solve those problems. Instead he appeared as a simple 'talking Yes man" for the industry, rather than attempting to create sound, helpful discourse.
The world already has enough "yes" men. They are the most common human on the planet. When will we see an industry participant who actually questions his industry, questions poor practices, solves self serving issues?
When will we be able to listen to a speaker who has something to say, beyond how great they are, how great their profession is?
What a waste. Still. Nice guy. He just does not even know that he has assigned himself a role, an "actor" if you will, in a stage show where his is more on the side of the problem, instead of being on the side of solution.
below is a link to a 15 year old child who is doing a far better job for society:
http://dailybail.com/home/and-a-child-shall-lead-them.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheDailyBail+%28The+Daily+Bail%29
Friday, November 26, 2010
middle class angst
While we are talking about financial abuse, I have just started to notice a long term trend of late.
It is only my own observation and is extremely unscientific, but it strikes me as interesting info to file away in the old noggin.
It goes like this:
When my dad was raising his family, the times allowed a single spouse to support an average middle class life. When I was raising a family, it seemed necessary for both spouses to work in order to support the average middle class life. Looking at my children now grown and on their own, it appears as if some may need to hold more than one job to support their middle class dream.
How far will it go before the middle class is eliminated, or simply enslaved economically to those at the top of the food chain?
I could be very wrong, but I am starting to suspect that government, taxation, financial schemers, bankers and such, are those people who are riding in the wagon. The middle class is pulling the wagon. Those in the wagon, keep taking more and more from those pulling the wagon, seeking greater and greater riches and ease. We keep paying for their leisure.
It is just my impression. I could be wrong. But I also see others writing things on blogs etc, like "never before in history have so few people, taken so much, from so many", referring to recent economic pillage we have undergone to make wall street and bay street richer. To think that this pillage has been helped by financial regulators or people who pose as regulators, and ultimately by politicians who back the regulators. Sad.
I hope the Industry of Accountability will develop far enough and strong enough to start holding some of these crooked folk to account, before it is too late.
My effort at the Industry of Accountability is found at www.albertafraud.com
check it out to see how billions get stolen each and every year by "trusted criminals" who do not have to follow the same rules as you and I. Join my facebook group and lets hold a few of them to account. Even if just "name and shame".
It is only my own observation and is extremely unscientific, but it strikes me as interesting info to file away in the old noggin.
It goes like this:
When my dad was raising his family, the times allowed a single spouse to support an average middle class life. When I was raising a family, it seemed necessary for both spouses to work in order to support the average middle class life. Looking at my children now grown and on their own, it appears as if some may need to hold more than one job to support their middle class dream.
How far will it go before the middle class is eliminated, or simply enslaved economically to those at the top of the food chain?
I could be very wrong, but I am starting to suspect that government, taxation, financial schemers, bankers and such, are those people who are riding in the wagon. The middle class is pulling the wagon. Those in the wagon, keep taking more and more from those pulling the wagon, seeking greater and greater riches and ease. We keep paying for their leisure.
It is just my impression. I could be wrong. But I also see others writing things on blogs etc, like "never before in history have so few people, taken so much, from so many", referring to recent economic pillage we have undergone to make wall street and bay street richer. To think that this pillage has been helped by financial regulators or people who pose as regulators, and ultimately by politicians who back the regulators. Sad.
I hope the Industry of Accountability will develop far enough and strong enough to start holding some of these crooked folk to account, before it is too late.
My effort at the Industry of Accountability is found at www.albertafraud.com
check it out to see how billions get stolen each and every year by "trusted criminals" who do not have to follow the same rules as you and I. Join my facebook group and lets hold a few of them to account. Even if just "name and shame".
Wednesday, November 24, 2010
Getting away with financial murder, financial rape and other crimes against the public
What a set of headlines to find today. I just got back from a 1000 km journey to Grande Prairie and back, and found my newspapers stacked up for me to read.
From Nov 21, 2010 Lethbridge Herald cover story came this headline "PM TARGETS AFGAN CORRUPTION"
I had to take a few breaths and slow myself down from getting upset and angry at the thought of our prime minister working to prevent corruption in a foreign land, while I spend my time here in Canada trying to make the public aware of the extent of corruption at home. It seems bizarre, dishonest and misleading, but I am slowly learning that the job of our leaders is to lie to us and to distract us from the major issues. Like a pickpocket who has an accomplice "bump" or distract you so another can pick your pocket, I am starting to feel as if that is the role of our government.
Then , further into my reading a photo of a homeless man sleeping on the sidewalk in downtown Toronto, in front of the major bank towers. I found the photo striking since I made a video journey film titled BREACH OF TRUST, The Unique Violence of White Collar Crime. One of the premises of the film is that predators (mostly financiers) take advantage of those lower than them on the economic or political food chain, thereby causing financial violence which knows no end upon those poor victims. They have zero recourse against their abusers (somewhat like an eight year old child verses the Catholic church circa 1960) and the net result is a lifetime of self sabotaging behaviours. I will try to obtain the image and post it.
Then as I went shopping at my local supermarket, speaking to the meat counter guy about a certain cut of meat, I saw the posters and photos near the back about "meat thieves". Never seen or heard that term before, but here is was, big as life. Photos of surveillance camera shots showing people who were known meat thieves. All I can say here is pure profanity. The frustration of seeing our system so able to "see" crime at the bottom of the food chain, and "see no evil" for those at the top of the economic and political food chain. Pure profanity. Pure Profanity. (even as far as me saying "George W Bush" which to me is like saying the fuck word)
I will end with this: "I want to live in a country where predators and abusers (from any station in life) can be held to account for the damage they do to other humans, to the economy, or to the planet". Today I do NOT live in such a country. I live in a so called free country where politicians and bankers and a few others (corporations, resource companies, drug companies) from the highest echelons of society can nearly get away with any abuse they happen to specialize in. They do not have to follow the same rules as you and I, and the laws of the land are not strong enough to reach upwards against gravity high enough to reach their stations in life. George W. Bush, George W. Bush, George W. Bush
From Nov 21, 2010 Lethbridge Herald cover story came this headline "PM TARGETS AFGAN CORRUPTION"
I had to take a few breaths and slow myself down from getting upset and angry at the thought of our prime minister working to prevent corruption in a foreign land, while I spend my time here in Canada trying to make the public aware of the extent of corruption at home. It seems bizarre, dishonest and misleading, but I am slowly learning that the job of our leaders is to lie to us and to distract us from the major issues. Like a pickpocket who has an accomplice "bump" or distract you so another can pick your pocket, I am starting to feel as if that is the role of our government.
Then , further into my reading a photo of a homeless man sleeping on the sidewalk in downtown Toronto, in front of the major bank towers. I found the photo striking since I made a video journey film titled BREACH OF TRUST, The Unique Violence of White Collar Crime. One of the premises of the film is that predators (mostly financiers) take advantage of those lower than them on the economic or political food chain, thereby causing financial violence which knows no end upon those poor victims. They have zero recourse against their abusers (somewhat like an eight year old child verses the Catholic church circa 1960) and the net result is a lifetime of self sabotaging behaviours. I will try to obtain the image and post it.
Then as I went shopping at my local supermarket, speaking to the meat counter guy about a certain cut of meat, I saw the posters and photos near the back about "meat thieves". Never seen or heard that term before, but here is was, big as life. Photos of surveillance camera shots showing people who were known meat thieves. All I can say here is pure profanity. The frustration of seeing our system so able to "see" crime at the bottom of the food chain, and "see no evil" for those at the top of the economic and political food chain. Pure profanity. Pure Profanity. (even as far as me saying "George W Bush" which to me is like saying the fuck word)
I will end with this: "I want to live in a country where predators and abusers (from any station in life) can be held to account for the damage they do to other humans, to the economy, or to the planet". Today I do NOT live in such a country. I live in a so called free country where politicians and bankers and a few others (corporations, resource companies, drug companies) from the highest echelons of society can nearly get away with any abuse they happen to specialize in. They do not have to follow the same rules as you and I, and the laws of the land are not strong enough to reach upwards against gravity high enough to reach their stations in life. George W. Bush, George W. Bush, George W. Bush
Saturday, November 20, 2010
Billions Stolen annually by people who don't need to follow rules or laws
The web site linked here lists just one example of persons who are exempt from following rules and laws designed to protect consumers.
Imagine a special class of people who can get permission to violate the law. To do things that are ordinarily illegal. Now imagine that they can do this to your investment advice and products, to taint the advice and the products that they sell you.
Now imagine that this happens about 500 times a year in every province in Canada.
Now imagine that they get to do this in secret, so you may never find out who they are and how they violate you financially.
Welcome to the Canadian predatory financial system, and 13 Canadian Securities Commissions.
Get busy, get a class action lawyer, and get all of your money back if you have lost due to negligence, gross negligence of conscious wrongdoing of a Canadian regulator.
Imagine a special class of people who can get permission to violate the law. To do things that are ordinarily illegal. Now imagine that they can do this to your investment advice and products, to taint the advice and the products that they sell you.
Now imagine that this happens about 500 times a year in every province in Canada.
Now imagine that they get to do this in secret, so you may never find out who they are and how they violate you financially.
Welcome to the Canadian predatory financial system, and 13 Canadian Securities Commissions.
Get busy, get a class action lawyer, and get all of your money back if you have lost due to negligence, gross negligence of conscious wrongdoing of a Canadian regulator.
Tuesday, June 01, 2010
Where do you invest?
With the economy turned bad, CEO's turned bad in many cases, regulators turned corrupt or morally blind in far too many cases, banks turned from financial servants to financial predators, and so on...........what is an investor supposed to do to protect their future. Where do you invest safely?
One expert answered this to me by saying "Invest in what you know and are familiar with larry. Whether that is land, business inventory, things where you have some expertise etc. This expert went on to explain how the best and brightest company in the land can be brought down today with "financial weapons of mass distruction" (quote by Warren Buffet) like credit default swaps, and a host of other derivative type instruments that wall street and bay street alchemists use to try and generate new and larger fees for themselves. Whatever stock you invest in can nowadays be subject to failure due to the creative use of these instruments.
The other risk that we have begun to see far too much of is the internal raping of the company by the very management hired to run the place for shareholders. Think Nortel, think Conrad Black type of managers, as well as the many names in the US.
So while stocks are historically considered one of the safest long term investments (for buy and hold people like Warren Buffet, who stick with quality), there is a new move afoot that brings white collar crime and derivative speculation right into that security type.
Which brings me to one of the most important suggestions I can give: Invest in regions where securities laws are enforced and where independent police investigations are allowed to proceed into financial crime. The largest pension fund in Canada used to be run by Claude Lemorouix, and his quote in the National Post a few years back suggested that he would not buy any Canadian company unless it was listed on a US exchange, since buying it there placed US authorities in a position to prosecute crimes by CEO's etc.
In Canada, all financial markets and securities are "self regulating" which means we are trusting our clever, cunning financiers to police themselves. While they have set up more than one hundred "protective" organizations and agencies, there is so far not one single, recognized agency in Canada that is not getting it's salary (and it's people) from the investment industry. What that means is that if you have a compliant against a large Canadian player like a bank for example, you are screwed, to use a technical term. If you have complaint against a small player, sometimes the self regulators will take that organization down to help their larger supporters (not to help you, the abused investor) but the end result is that the self regulators will keep your money if any is recovered. I shit you not, that is how they operate. Research it yourself. These people are not working for the benefit of the public interest.
So buyer beware with even the best stocks in Canada, from the top dealers in the land.
Speaking of dealers, do they owe you a duty to place your interests first and foremost? Their marketing material would suggest yes. Their behavior suggests otherwise. For example:
Over 80% of mutual funds sold by these "reputable dealers" have in the past been sold using the highest cost commission structure possible, despite lower cost choices available. It that trusted professional advice? No.
More recently (2009 I believe) 92% of all funds sold in Canada were sold into something called WRAP accounts, usually funds of other funds, or proprietary funds. (house brands) These cause fees upon fees, or fees kept in house in the case of the house brand, so profits can be up to 26 times greater if they sell you the house fund. Who cares if they perform better, worse, or even, if the company is getting up to 26 times more profit, it is about them and not about you. Otherwise why the 92% of sales capture rate.
Speaking of sales, did you know that your trusted advisor has less training to be licensed that your hairdresser or your plumber? Or that their license with the government was officially listing them as "salesperson" up until sept 29, 2009?
No you did not know this because despite securities Commission laws saying they must tell you this info, they never do and the laws never get enforced. Remember that bit about self regulating?
After Sept 29, 2009, your financial seller is now listed as a "dealing representative", but you can bet they will also never properly disclose this to you. Fraudulent misrepresentation is the simplest description I can apply to what your financial seller does to you in Canada.
So where are we at choosing what to invest in? The banks have turned predatory. The CEO's are corrupt at worst and self serving at best, despite being professionaly paid to behave otherwise. 80% plus of sellers are predatory sellers, trying to fool the public into the belief and the trust that they are professional and their to help. Wrong.
The markets are subject to some financial manipulations by some of the craziest financial products ever invented, ie, credit default swaps allow them to do the equivalent of buying insurance on the neighbors home, then burning the home down to collect the insurance.
Regualtors are on the take and paid 100% by those very same financial wizards.
Politicians (like Ted Morton, Alberta Finance Minister, and twelve others) feel they owe a greater duty of loyalty to their kingdoms., er their securities commissions, thus the politicians seem also to be owned by those with the money, and not serving those they are sworn to serve.
I hate to sound so pessimistic, but that is the way it works........or does not work, depending upon which side of the fence you are on.
I keep the solutions to myself, as well as the types of investments where your money cannot be taken from you by fast talking, self policing shysters in suits. Other than some ranting here and there on the web, and elsewhere, it is too difficult to tell people where to invest unless one is face to face, and fully informed as to what each persons individual situation is. It occurrs to me that this world should employ "financial bodyguards" and I hope to find myself fully employed in that capacity at some point. For now I am quite happy to work like this where I can, and the rest of the time give my experience away freely to governments, legislators, media, public speaking and helping abused investors.
I have a section on my film site titled "private financial investigator", which is something available to those who wish to hire someone with thirty years of hard earned experience, combined with not a single product to sell, nor a single bank or other institution to have to misrepresent to my clients.
Thanks for reading this far along.
One expert answered this to me by saying "Invest in what you know and are familiar with larry. Whether that is land, business inventory, things where you have some expertise etc. This expert went on to explain how the best and brightest company in the land can be brought down today with "financial weapons of mass distruction" (quote by Warren Buffet) like credit default swaps, and a host of other derivative type instruments that wall street and bay street alchemists use to try and generate new and larger fees for themselves. Whatever stock you invest in can nowadays be subject to failure due to the creative use of these instruments.
The other risk that we have begun to see far too much of is the internal raping of the company by the very management hired to run the place for shareholders. Think Nortel, think Conrad Black type of managers, as well as the many names in the US.
So while stocks are historically considered one of the safest long term investments (for buy and hold people like Warren Buffet, who stick with quality), there is a new move afoot that brings white collar crime and derivative speculation right into that security type.
Which brings me to one of the most important suggestions I can give: Invest in regions where securities laws are enforced and where independent police investigations are allowed to proceed into financial crime. The largest pension fund in Canada used to be run by Claude Lemorouix, and his quote in the National Post a few years back suggested that he would not buy any Canadian company unless it was listed on a US exchange, since buying it there placed US authorities in a position to prosecute crimes by CEO's etc.
In Canada, all financial markets and securities are "self regulating" which means we are trusting our clever, cunning financiers to police themselves. While they have set up more than one hundred "protective" organizations and agencies, there is so far not one single, recognized agency in Canada that is not getting it's salary (and it's people) from the investment industry. What that means is that if you have a compliant against a large Canadian player like a bank for example, you are screwed, to use a technical term. If you have complaint against a small player, sometimes the self regulators will take that organization down to help their larger supporters (not to help you, the abused investor) but the end result is that the self regulators will keep your money if any is recovered. I shit you not, that is how they operate. Research it yourself. These people are not working for the benefit of the public interest.
So buyer beware with even the best stocks in Canada, from the top dealers in the land.
Speaking of dealers, do they owe you a duty to place your interests first and foremost? Their marketing material would suggest yes. Their behavior suggests otherwise. For example:
Over 80% of mutual funds sold by these "reputable dealers" have in the past been sold using the highest cost commission structure possible, despite lower cost choices available. It that trusted professional advice? No.
More recently (2009 I believe) 92% of all funds sold in Canada were sold into something called WRAP accounts, usually funds of other funds, or proprietary funds. (house brands) These cause fees upon fees, or fees kept in house in the case of the house brand, so profits can be up to 26 times greater if they sell you the house fund. Who cares if they perform better, worse, or even, if the company is getting up to 26 times more profit, it is about them and not about you. Otherwise why the 92% of sales capture rate.
Speaking of sales, did you know that your trusted advisor has less training to be licensed that your hairdresser or your plumber? Or that their license with the government was officially listing them as "salesperson" up until sept 29, 2009?
No you did not know this because despite securities Commission laws saying they must tell you this info, they never do and the laws never get enforced. Remember that bit about self regulating?
After Sept 29, 2009, your financial seller is now listed as a "dealing representative", but you can bet they will also never properly disclose this to you. Fraudulent misrepresentation is the simplest description I can apply to what your financial seller does to you in Canada.
So where are we at choosing what to invest in? The banks have turned predatory. The CEO's are corrupt at worst and self serving at best, despite being professionaly paid to behave otherwise. 80% plus of sellers are predatory sellers, trying to fool the public into the belief and the trust that they are professional and their to help. Wrong.
The markets are subject to some financial manipulations by some of the craziest financial products ever invented, ie, credit default swaps allow them to do the equivalent of buying insurance on the neighbors home, then burning the home down to collect the insurance.
Regualtors are on the take and paid 100% by those very same financial wizards.
Politicians (like Ted Morton, Alberta Finance Minister, and twelve others) feel they owe a greater duty of loyalty to their kingdoms., er their securities commissions, thus the politicians seem also to be owned by those with the money, and not serving those they are sworn to serve.
I hate to sound so pessimistic, but that is the way it works........or does not work, depending upon which side of the fence you are on.
I keep the solutions to myself, as well as the types of investments where your money cannot be taken from you by fast talking, self policing shysters in suits. Other than some ranting here and there on the web, and elsewhere, it is too difficult to tell people where to invest unless one is face to face, and fully informed as to what each persons individual situation is. It occurrs to me that this world should employ "financial bodyguards" and I hope to find myself fully employed in that capacity at some point. For now I am quite happy to work like this where I can, and the rest of the time give my experience away freely to governments, legislators, media, public speaking and helping abused investors.
I have a section on my film site titled "private financial investigator", which is something available to those who wish to hire someone with thirty years of hard earned experience, combined with not a single product to sell, nor a single bank or other institution to have to misrepresent to my clients.
Thanks for reading this far along.
Thursday, April 22, 2010
CIBC exposed in defrauding elderly clients
From Maisonneuve Magazine, comes this fearless article to illustrate complete failure in Canada to regulate and protect investors. The story speaks to a captured culture of deceit that Canadians should be aware of to protect themselves against predatory financial behaviors.
http://docs.google.com/fileview?id=0BzE_LMPDi9UONzY5NTk3YjktZDlmZi00MWM3LWFlNDMtNTY1NDczZjk4Yzhi&hl=en
"The Incredible True Story Of Mr. Markarian"
http://docs.google.com/fileview?id=0BzE_LMPDi9UONzY5NTk3YjktZDlmZi00MWM3LWFlNDMtNTY1NDczZjk4Yzhi&hl=en
Thursday, April 15, 2010
I think there will be an entirely new industry created in the next decade or two. I call it the "industry of accountability", and it will be an entire system of specialties created to instill ethical behavior and integrity into a world which today is run on the premise that the man who lies the best wins. Or the man who steals the best wins. Or the man who destroys others the best wins.
Any number of situations, financial, political, business enterprise, all run the best by those who lie, cheat and steal the best. That simply must change. The industry of accountability is my hope for that change.
After our next great depression (which we are now creating) I hope that people in North America will have learned enough about letting foxes run the henhouse. I hope there is a huge backlash against people who choose self interest over the public interest. Yes, I know, we all do that, and there is no stopping it. But where it is done by our political leaders, business leaders, etc, we have the right to enforce breach of trust and negligence laws and put them in jail.
That is the industry of accountability. Instead of employing lawyers and accountants to help crooks to cheat the system, there will be an entire workforce of professionals employed in protecting the public interest, monitoring public servants, and holding them accountable and responsible for their lies and for their damages.
Just like today, we no longer accept and remain quiet about types of abuses. Just like today we question the Catholic church and how they hurt people. I believe that given time, north americans will have had enough of lying cheating stealing and "organized crime" by our trusted leaders. When we start to put these people in jail and take away their money and property, then we will begin down the road to a safer, more prosperous society.
That is my story and I am sticking to it. I am Larry Elford and I work in the industry of accountability. I am a financial investigator, specializing in investment abuses, and my work on behalf of the public interest can be found freely at www.investoradvocates.ca (industry tricks of the trade)
and
www.breachoftrust.ca (investment industry abusing employees and customers)
Alberta Finance Minister (new) Ted Morton, just cannot come any cleaner than his predecesor Iris Evans.
Ed and Ted’s Adventures
Recent news revealed a world renowned institution caught “protecting itself”, instead of “protecting its victims”. I see identical hubris with our premier and finance minister.
Over one billion dollars of Albertan’s money is missing in toxic investments. Two western Canadians are dead by suicide. You would think that Ted and Ed would be honest with the public, but no. They act similar to how my two year old nephew does when he has a bathroom “accident”. First try to hide it. Then deny it. Then perhaps put on an angry face of indignation. This forgiveable behavior for a two year old, but for Ted and Ed? It seems evident of persons who should not be in leadership nor trusted with money.
For those who are out of the loop, this investment paper turned out to be junk that was sold by investment salesmen, and the assets were then pledged to foreign banks (Deutsche bank in our case), in a complicated insurance process called a credit default swap. Not many people know or care what a credit default swap is, but imagine if you and your friends could buy insurance on your neighbors home. Then imagine if someone were to burn that home so that you and your friends could collect the insurance money. Apply that pathology to finance and you know the basics and the dangers of credit default swaps. They can be financial weapons of mass destruction.
$32 million of city tax revenues were lost in these by our city treasurer. Another billion or so from other Albertan’s.
Ed and Ted’s excellent financial regulators gave investment firms permission to sell this toxic junk in Alberta. It granted them permission to violate Alberta Securities Laws to do so. It has given several thousand such permissions without a single notice to the public. And neither Ed nor Ted is willing to tell us why. After all it is only billions of your money. Ted has not lost a nickel so why should he care? Ted now informs me that he will not answer this question of “why”. Nor will he tell why secret deals like this are done without any public notice. An accident Ted? Hiding something from the public?
Contact the writer at lelford@shaw.ca if you would like to become part of the solution.
Larry Elford
Friday, October 02, 2009
The industry of accountability would pay for itself. An entire league of accountants, lawyers, police, investigators., etc, would be employed to rein in rampant and runaway damage to our planet and the people on it, by those who are a bit over-enthusiastic in the accumulation of money. Overenthusiastic to the point where they will hurt others in order to get ahead. That must be curtailed. The industry of accountability would pay for itself in savings by those who today get away with rampant greed, and rampant destruction of the environment. We are now paying billions if not trillions to support an industry of greed, of fraud, of ruin. We just need to take this excess "energy" and see it spent on positive, proactive and protective measures, rather than on selfish, self destructive measures.
On the other hand, people who want to help others, make a fortune, improve the planet, etc, are welcome to become as wealthy as the world allows. No limits. Complete freedom, just as Milton Freidman would have wanted. It just has to be done without making others suffer.
That is my wish for capitalism today. Not, as Michael Moore might suggest, that it needs to be put to sleep. Not that we need convert to socialism, communism, alcoholsim or any other form of ism that might make us feel good for a day. We might just start with the part that Milton left out. With freedom.......comes responsibility. Starting now.
Humanism. A new form of capitalism
The name is HUMANISM.
The game is how to improve Capitalism so that it can function as it should, without resorting to so much financial cannibalism of each other. So much greed, and so much financial abuse.
We have seen Communism. We have seen Socialism. We have seen Capitalism. They could all be defined this way:
In the first one, man is allowed to exploit his fellow man. In the other two it is just the opposite.
Humanism, on the other hand, is where human beings and human lives are given a place of importance. A priority if you will. How?
Humanism is Capitalism with accountability. With responsibility for ones actions. Not simply the kind we have now were the man with the most lawyers beats up the other man with the least. But real, societal support for fairness, and accountability. Where when one man is beaten or abused by another by capitalistic means, the entire society acts in a manner to correct this. Where predators are not simply allowed to prey on the weakest members of society at will.
Milton Freidman, the Nobel winning economist, with his "FREE TO CHOOSE" motto, left only one small item out. That item is the fact that with freedom comes responsibility. As we all tell our 16 year old when we first give him the keys to the family car. We need to put together a world where every one of us is told the same thing; "with economic freedom, comes a responsibility to behave in a manner appropriate". If you do not, you will be held to account.
Greed is good.......but not it if is used to hurt others. It all too often is allowed to.
Accountability means an entire new industry being introduced. An industry to ensure responsible humane behavior. To curtail the financially insane. To hold them to account for the damage done to other humans, or to the planet. It is an attempt to make our economy sustainable, and sustainable for more than just the top 1% of the population.
Sunday, March 22, 2009
Finance Minister Iris Evans "sees no evil", protects her job
The economic meltdown is being analyzed to determine what caused it and how our preventative systems failed us. After three decades of working inside, or studying the financial services industry I offer the following as what I have discovered along the way.
Of course a human tendency towards greed is an obvious cause, that includes the people who took the money that they may (or may not) have known was impossible to repay. I blame those persons to a certain extent since we are always responsible for our actions. However lets go up one level and see if there is a greater duty of care with the service providers.
The folks who pushed, promoted, or "gave away" the farm with mortgages to those who were not qualified are in the business of lending. They are supposed professionals, and as a result of this I hold them to a higher standard, a higher duty of care, to the public they serve. They cannot say that they did not know better, as is the case for some of their customers. They are a huge cause of what went wrong.
Next up the scale of accountability we look at the financial "meth labs", investment firms who are always on the lookout for the next great product to sell. Like the original lenders, these banksters and brokers also had no interest in whether the investments were any good or not, they were simply interested in the commissions from selling them to the next poor soul. This is a pretty good indicator of whether or not your investment firm is truly trying to place your interests first, as they promise. They too, should be held to account, since their constant promise to the public is that they are "professionals", and not merely "hucksters". It looks like they lied to us.
Then comes the bond rating agencies, who were hired and paid (by those investment firms) to fudge the ratings on tainted products. They have sold their souls for short term profits and have thus lost the moral right to be considered professional.
Remarkably, our own financial watchdogs are next on the list of those persons or agencies who participated in the public fraud. Here, with thirteen provincial and territorial securities commissions, all thirteen of those agencies granted "approximately 20" passes to investment firms to violate the Securities Act in each jurisdiction. No public input. No public notice. But when we learn that each commission is paid by the investment industry, based on fees and charges for such "work" as granting legal exemptions, it should come as no surprise.
Finally we get to the level of government ministers, who are responsible for those government agencies, which are responsible for inspecting, protecting and preventing investment fraud towards the public. The federal government passes the buck back down to the provinces, saying that each province is responsible for matters of investment in their jurisdiction.
That gets us to Iris Evan, the finance minister for my province of Alberta. The second from the top person who is supposedly responsible for all of the acts of those agencies and persons beneath her jurisdiction. How does she react to the systemic failures? By looking the other way unfortunately. By ignoring the entire event as if nothing happened and by protecting her job, rather than protecting the public. She joins the list of all of the so called "professionals", who choose their own self interests over the interests that a professional is supposed to be serving.
Failure at nearly each and every level, by nearly each and every person in a position of control or authority.
My strongest shock registers to those in government, who are charged with protecting us. Our finance minister, and our securities commission. Instead of getting rich by failing to do their jobs professionally, they simply stand to "not lose face", over their lack of ability to perform the job. Maybe that is the same thing as money to a politician.
Either way, it is a breach of trust. A criminal offense. An offense punishable by jail. As is criminal negligence.
If we cannot hold our public officers accountable and responsible for their acts against the public.........and if the police cannot hold financial firms accountable or responsible for frauds against the public then we are due to repeat financial fraud over and over and over. until our country can no longer tolerate the abuse and our economy fails. All due to the people at the top who cannot do their job. Iris Evan, will you please do your job? Or premier Ed Stelmach will you please place someone in the position of Finance Minister who can do this important job?
www.investoradvocates.ca
www.investorvoice.ca
web.me.com/lelford
Friday, March 07, 2008
legal exemptions handed out by crown corp
How to exempt yourself from the law………and win!
Lately the Ferguson (RCMP officer tried three times) case and the motorcycle riding Sikh fellow who wished to be exempt from the law on wearing a helmet, were in the news. Most people I suspect are not well informed on how to obtain an exemption to the law. None, in fact can imagine asking the police for an exemption to, lets say, drive from Lethbridge to Calgary at 200 kilometers per hour, no matter how important your trip is.
What I found amazing, however, is that any bank, investment dealer or investment sponsor, is able to approach our provincial securities commission and apply for an exemption to the law. Want to sell house brand funds to all your clients? Apply for an exemption to the laws that protect them from such predatory practices. Need to give commission kickbacks to get clients to move to certain products? Get an exemption from the laws against commission rebating. Have a poorly selling income trust or other new issue? Apply for exemptive relief from the law so that the firm can use (or abuse) client’s mutual fund assets, and dump the offensive product into their funds without their knowledge. Want to change the title of thousands of licensed “salespersons” and make them instantly appear as “advisors”? Apply for an exemption to the laws against misuse of registration and license. Viola! Solve nearly any little problem with some paperwork and an application to the securities regulator.
It has all been done, and according to the largest database in Canada on the topic, done thousands of times in recent years. I had no idea that something like this was even possible. I suspect that clients are even less well informed.
How, you ask? Because investments are handled by another set of laws, called the Securities Act, and the police are not always informed of criminal violations in this other area. I have seen forgery brushed aside as “not always forgery”, fraud dismissed, breach of trust ignored. The police are assuming, perhaps incorrectly, that your provincial securities commission has matters in hand. Or they are never even notified.
The site that contains the most comprehensive data on exemptions to the law is found at:
http://www.osc.gov.on.ca/Regulation/Orders/2008/ord_2008_index.jsp or you can just go to the OSC (Ontario Securities Commission) site and look at the section on “orders, rulings and decisions”. It includes exemptions passed in Alberta and other provinces.
All of these exemptions were granted without public input. No involvement of a judge, no public notice, and no consumer representation in the decision making process. If you browse, you just may find an investment you own that was sold to you without this disclosure. You may be entitled to know why.The various Securities Commissions refuse to answer how some of these exemptions are in the public interest. They feel they do not have to tell you. Some have been badly abused to hurt the interests of consumers. In Alberta, our provincial commission, a crown corporation, which is responsible to the legislature, recently spent over $1 million dollars on legal fees to try and avoid public audit by the Alberta government auditor. It was discovered that they had something to hide. Yet this practice continues to this day.As a consumer you will get more notice if your neighbor plans to build a garage too close to your property, than you will get if your financial firm chooses to dump certain investment products on you using a legal exemption. Because of hidden legal games such as this, Canada is damaging its reputation by allowing the manufacture and sale to the public of known “tainted” or bad products. Former Bank of Canada governor David Dodge was quoted as saying that Canada has a “WILD WEST” reputation globally on matters relating to investments. Legal exemptions and self-regulation are two root causes. They are part of a flawed foundation upon which our system is built. Some folks think they have been gouged by electrical industry de-regulation. Just try and imagine what goes on behind the curtains in the financial industry where they are allowed to self-regulate? This is just part of many reasons why Canadians suffer from “One Million Frauds”, (Globe and Mail Oct 3, 2007) with only one person convicted until the end of 2007 (Canadian Business editorial Aug 13/27 2007). It also may help explain why ex RCMP IMET commercial crime experts say that Canada is a “A Good Country for Crooks”, (Canadian Business Sept 24, 2007) The United States is coming to grips with sub prime mortgages, mortgage fraud, Enron, WorldCom, Tyco, etc., which are repeatedly costing the United States more than the entire 1929 market crash and resulting depression. Similar investments, frauds, crimes, and damages reside here in Canada. The difference is that in Canada we have effectively no enforcement. What possible agency would there be to bring enforcement action, when our own securities commission is assisting firms to skirt the law? This is the ultimate example of having foxes guarding the henhouse. It is the ultimate example of self-regulation turned into “self serving”.Please ask your local MLA to show me where I may be wrong on these matters by bringing about a Provincial Inquiry, to see if these claims have merit? I can assure you that a Provincial Inquiry will turn up issues that are costing Albertan’s billions.
Larry Elford
Lethbridge
Lately the Ferguson (RCMP officer tried three times) case and the motorcycle riding Sikh fellow who wished to be exempt from the law on wearing a helmet, were in the news. Most people I suspect are not well informed on how to obtain an exemption to the law. None, in fact can imagine asking the police for an exemption to, lets say, drive from Lethbridge to Calgary at 200 kilometers per hour, no matter how important your trip is.
What I found amazing, however, is that any bank, investment dealer or investment sponsor, is able to approach our provincial securities commission and apply for an exemption to the law. Want to sell house brand funds to all your clients? Apply for an exemption to the laws that protect them from such predatory practices. Need to give commission kickbacks to get clients to move to certain products? Get an exemption from the laws against commission rebating. Have a poorly selling income trust or other new issue? Apply for exemptive relief from the law so that the firm can use (or abuse) client’s mutual fund assets, and dump the offensive product into their funds without their knowledge. Want to change the title of thousands of licensed “salespersons” and make them instantly appear as “advisors”? Apply for an exemption to the laws against misuse of registration and license. Viola! Solve nearly any little problem with some paperwork and an application to the securities regulator.
It has all been done, and according to the largest database in Canada on the topic, done thousands of times in recent years. I had no idea that something like this was even possible. I suspect that clients are even less well informed.
How, you ask? Because investments are handled by another set of laws, called the Securities Act, and the police are not always informed of criminal violations in this other area. I have seen forgery brushed aside as “not always forgery”, fraud dismissed, breach of trust ignored. The police are assuming, perhaps incorrectly, that your provincial securities commission has matters in hand. Or they are never even notified.
The site that contains the most comprehensive data on exemptions to the law is found at:
http://www.osc.gov.on.ca/Regulation/Orders/2008/ord_2008_index.jsp or you can just go to the OSC (Ontario Securities Commission) site and look at the section on “orders, rulings and decisions”. It includes exemptions passed in Alberta and other provinces.
All of these exemptions were granted without public input. No involvement of a judge, no public notice, and no consumer representation in the decision making process. If you browse, you just may find an investment you own that was sold to you without this disclosure. You may be entitled to know why.The various Securities Commissions refuse to answer how some of these exemptions are in the public interest. They feel they do not have to tell you. Some have been badly abused to hurt the interests of consumers. In Alberta, our provincial commission, a crown corporation, which is responsible to the legislature, recently spent over $1 million dollars on legal fees to try and avoid public audit by the Alberta government auditor. It was discovered that they had something to hide. Yet this practice continues to this day.As a consumer you will get more notice if your neighbor plans to build a garage too close to your property, than you will get if your financial firm chooses to dump certain investment products on you using a legal exemption. Because of hidden legal games such as this, Canada is damaging its reputation by allowing the manufacture and sale to the public of known “tainted” or bad products. Former Bank of Canada governor David Dodge was quoted as saying that Canada has a “WILD WEST” reputation globally on matters relating to investments. Legal exemptions and self-regulation are two root causes. They are part of a flawed foundation upon which our system is built. Some folks think they have been gouged by electrical industry de-regulation. Just try and imagine what goes on behind the curtains in the financial industry where they are allowed to self-regulate? This is just part of many reasons why Canadians suffer from “One Million Frauds”, (Globe and Mail Oct 3, 2007) with only one person convicted until the end of 2007 (Canadian Business editorial Aug 13/27 2007). It also may help explain why ex RCMP IMET commercial crime experts say that Canada is a “A Good Country for Crooks”, (Canadian Business Sept 24, 2007) The United States is coming to grips with sub prime mortgages, mortgage fraud, Enron, WorldCom, Tyco, etc., which are repeatedly costing the United States more than the entire 1929 market crash and resulting depression. Similar investments, frauds, crimes, and damages reside here in Canada. The difference is that in Canada we have effectively no enforcement. What possible agency would there be to bring enforcement action, when our own securities commission is assisting firms to skirt the law? This is the ultimate example of having foxes guarding the henhouse. It is the ultimate example of self-regulation turned into “self serving”.Please ask your local MLA to show me where I may be wrong on these matters by bringing about a Provincial Inquiry, to see if these claims have merit? I can assure you that a Provincial Inquiry will turn up issues that are costing Albertan’s billions.
Larry Elford
Lethbridge
Thursday, February 28, 2008
busy busy busy
you might find me out of touch for lengthy periods.
Working on BREACH OF TRUST has taken some of my time. You will find a web site devoted to this project at web.mac.com/lelford
(just type it in like that and it will take you there)
Doc films take longer that one would think to prepare.
Another site with a few clips and a few questions the film will try and answer is found at http://www.breachoftrust.ca/
check them out and keep in touch
Working on BREACH OF TRUST has taken some of my time. You will find a web site devoted to this project at web.mac.com/lelford
(just type it in like that and it will take you there)
Doc films take longer that one would think to prepare.
Another site with a few clips and a few questions the film will try and answer is found at http://www.breachoftrust.ca/
check them out and keep in touch
Four out of five financial advisors agree. "Screw the client"
From the Investment Funds Institute ( http://www.ific.ca/ ) we see that mutual fund wrap accounts consist of only 17% of total mutual fund industry assets. That makes sense since they are the new kid on the block, and most people have their money in tried and true, regular, independent mutual funds.
Recent sales statistics, however, indicate that 91% of today’s sales are moving client assets into wrap accounts……..presumably a large percentage of which consist of “house brand” or proprietary products. Are these the new fad, fashion, or are they a such a vast improvement over the old?
The answer is yes and no. No for clients. Yes for salespersons. The Ontario Securities Commission has produced studies which show that by advising clients to purchase the “house brand” fund, (wrap accounts included) the firm and the salesperson share in increased revenues of between twelve to twenty six times. (OSC Fair Dealing Model, Appendix F, on compensation bias in mutual fund sales)
If you have recently been "advised" by your financial professional to move your assets into a house branded product, you have to consider the conflicts they have lept over to get you there. One, they have placed themselves (not you) in a position where twelve to twenty six times more profit goes to them and their firm. Is this good for you? Maybe. Maybe not. Time will only tell. Is it good for them? You bet. 100% guaranteed for them.
Two, they have crossed the line from being your financial "doctor" who prescribes the best solution for you, and they have also become your financial "pharmacist", the person who dispenses the solution. When the doctor and the pharmacist start prescribing to you only house brand medicines, that they are mixing up in the back room, rather than independant products with proven track records, you can be sure your interests have "left the building". Unfortunately that may be what is happening today to 90% plus of Canadians. Time will tell.
Of course the industry made sure that the Fair Dealing Model was never put into place. It was felt that it was too…………..well um,………..fair.
It is factors such as this (among several others) which lead me to conclude that four out of five investment “advisors” are misrepresenting this title and are in fact acting with a selfish sales interest.
This misrepresentation is illegal, unethical, and not in the public interest. Further evidence to this argument can be found by searching for the exact registration category of each “advisor” registered in Canada. Four out of five of these will be found to be also using the “advisor” title improperly, and they are in fact licensed and legally registered in the category of “salesperson”.
Recent sales statistics, however, indicate that 91% of today’s sales are moving client assets into wrap accounts……..presumably a large percentage of which consist of “house brand” or proprietary products. Are these the new fad, fashion, or are they a such a vast improvement over the old?
The answer is yes and no. No for clients. Yes for salespersons. The Ontario Securities Commission has produced studies which show that by advising clients to purchase the “house brand” fund, (wrap accounts included) the firm and the salesperson share in increased revenues of between twelve to twenty six times. (OSC Fair Dealing Model, Appendix F, on compensation bias in mutual fund sales)
If you have recently been "advised" by your financial professional to move your assets into a house branded product, you have to consider the conflicts they have lept over to get you there. One, they have placed themselves (not you) in a position where twelve to twenty six times more profit goes to them and their firm. Is this good for you? Maybe. Maybe not. Time will only tell. Is it good for them? You bet. 100% guaranteed for them.
Two, they have crossed the line from being your financial "doctor" who prescribes the best solution for you, and they have also become your financial "pharmacist", the person who dispenses the solution. When the doctor and the pharmacist start prescribing to you only house brand medicines, that they are mixing up in the back room, rather than independant products with proven track records, you can be sure your interests have "left the building". Unfortunately that may be what is happening today to 90% plus of Canadians. Time will tell.
Of course the industry made sure that the Fair Dealing Model was never put into place. It was felt that it was too…………..well um,………..fair.
It is factors such as this (among several others) which lead me to conclude that four out of five investment “advisors” are misrepresenting this title and are in fact acting with a selfish sales interest.
This misrepresentation is illegal, unethical, and not in the public interest. Further evidence to this argument can be found by searching for the exact registration category of each “advisor” registered in Canada. Four out of five of these will be found to be also using the “advisor” title improperly, and they are in fact licensed and legally registered in the category of “salesperson”.
Bank Robs Client! Gets permission from the law
If I rob a bank, I find myself in conflict with the criminal code of Canada.
If a bank or financial institution wishes to rob consumers in some way, they can go to our own Crown Corporation, The Alberta Securities Commission, and apply for an exemption to the law.
Why? Because investments are handled by another set of laws, called the Securities Act, and the police are not always informed of criminal violations in this “other” area. The police are assuming, perhaps incorrectly, that the provincial securities commission has matters in hand.
There were thousands of “exemptions to the law” granted in Alberta over recent years. Many of them involve investments you hold. Stocks, mutual funds, Royalty Trusts., etc. All of them granted without public input. No involvement of a judge, no public notice, and no consumer representation in the decision making process.
The Alberta Securities Commission refuses to answer how some exemptions are in the public interest. Some have truly hurt the interests of consumers. This same crown corporation, which is responsible to you, the taxpayer, and supposedly answerable to the legislature, recently spent over $1 million dollars on legal fees to try to avoid audit by the Alberta government’s auditor. It was discovered that they had something to hide.
As a consumer you will get more notice if your neighbor plans to build a garage too close to your property, than you will get if your financial advisory firm chooses to dump tainted products on you using a legal exemption. Because of legal tricks, Canada is in second place behind only China, in damaging its reputation by allowing the manufacture of known tainted products. Investment products are the tainted goods specialty of Canada. Legal exemptions and self-regulation are two major causes. (If you think you have been gouged by the electrical industry “de-regulation”, just try and imagine what goes on behind the curtains in your financial industry where they are allowed to “self-regulate”?) If you are having a hard time picturing it, just imagine the your money and the “honor system” handed to men like Conrad Black.)
This is part of the many reasons why Canadians suffer from “One Million Frauds”, (Globe and Mail Oct 3, 2007) with only one person convicted until the end of last year (Canadian Business editorial Aug 13/27 2007). It also may help explain why ex RCMP IMET commercial crime experts say that Canada is a “A Good Country for Crooks”, (Canadian Business Sept 24, 2007)
The United States is coming to grips with subprime mortgages and mortgage fraud, Enrons, Worldcom, Tyco, etc., which are costing the United States more than the entire 1929 market crash and resulting depression. These investments, frauds, crimes, and damages are long infecting Canada as well. With no punishment here. Remember, we are on the “honor system”.
Will your new role government now help bring about a Provincial Inquiry into violations of the public trust by our Alberta Securities Commission, to see if these claims have merit? I can assure you that a Provincial Inquiry will turn up issues that are costing Albertan’s billions. I can also assure you that if you fail to call for an inquiry, that the conditions that allow this will live on.
From: Larry Elford, (former CFP CIM FCSI Associate Portfolio Manager, retired)
founder of http://www.investoradvocates.ca/ Representing the interests of several hundred ethically proven investment industry professionals, and several hundred thousand investment consumers.lelford@shaw.ca
If a bank or financial institution wishes to rob consumers in some way, they can go to our own Crown Corporation, The Alberta Securities Commission, and apply for an exemption to the law.
Why? Because investments are handled by another set of laws, called the Securities Act, and the police are not always informed of criminal violations in this “other” area. The police are assuming, perhaps incorrectly, that the provincial securities commission has matters in hand.
There were thousands of “exemptions to the law” granted in Alberta over recent years. Many of them involve investments you hold. Stocks, mutual funds, Royalty Trusts., etc. All of them granted without public input. No involvement of a judge, no public notice, and no consumer representation in the decision making process.
The Alberta Securities Commission refuses to answer how some exemptions are in the public interest. Some have truly hurt the interests of consumers. This same crown corporation, which is responsible to you, the taxpayer, and supposedly answerable to the legislature, recently spent over $1 million dollars on legal fees to try to avoid audit by the Alberta government’s auditor. It was discovered that they had something to hide.
As a consumer you will get more notice if your neighbor plans to build a garage too close to your property, than you will get if your financial advisory firm chooses to dump tainted products on you using a legal exemption. Because of legal tricks, Canada is in second place behind only China, in damaging its reputation by allowing the manufacture of known tainted products. Investment products are the tainted goods specialty of Canada. Legal exemptions and self-regulation are two major causes. (If you think you have been gouged by the electrical industry “de-regulation”, just try and imagine what goes on behind the curtains in your financial industry where they are allowed to “self-regulate”?) If you are having a hard time picturing it, just imagine the your money and the “honor system” handed to men like Conrad Black.)
This is part of the many reasons why Canadians suffer from “One Million Frauds”, (Globe and Mail Oct 3, 2007) with only one person convicted until the end of last year (Canadian Business editorial Aug 13/27 2007). It also may help explain why ex RCMP IMET commercial crime experts say that Canada is a “A Good Country for Crooks”, (Canadian Business Sept 24, 2007)
The United States is coming to grips with subprime mortgages and mortgage fraud, Enrons, Worldcom, Tyco, etc., which are costing the United States more than the entire 1929 market crash and resulting depression. These investments, frauds, crimes, and damages are long infecting Canada as well. With no punishment here. Remember, we are on the “honor system”.
Will your new role government now help bring about a Provincial Inquiry into violations of the public trust by our Alberta Securities Commission, to see if these claims have merit? I can assure you that a Provincial Inquiry will turn up issues that are costing Albertan’s billions. I can also assure you that if you fail to call for an inquiry, that the conditions that allow this will live on.
From: Larry Elford, (former CFP CIM FCSI Associate Portfolio Manager, retired)
founder of http://www.investoradvocates.ca/ Representing the interests of several hundred ethically proven investment industry professionals, and several hundred thousand investment consumers.lelford@shaw.ca
Alberta Securities Commission helps out fraud?
Feb 25, 2008
Media Release and key question for Alberta Provincial Election Candidates
From: Larry Elford, founder of http://www.investoradvocates.ca/ Representing the interests of several hundred ethically proven investment industry professionals, and several hundred thousand investment consumers.
Fact #1 Financial industry dealers are allowed to self regulate (police themselves) in Alberta.
Fact #2 Financial industry participants are allowed direct access to the law and to the Alberta Securities Commission (the ASC). In contrast, consumers are directed to a non-government body.
Fact #3 If you were to approach the ASC with a complaint, you would be referred to “self-regulatory” agencies, which are private, funded, paid, and responsible only to the industry the consumer is complaining of. Consumers are not only denied access to the protection of Securities Law in Alberta, they are forced to report financial abuse directly to the association of dealers that they are complaining of.
Fact #4 If consumers wanted to rob a financial institution, they would not be allowed to alter the law to make their robbery “legal”. When financial institutions wish to rob consumers, they are allowed to go to the Alberta Securities Commission and apply for “exemptive relief” from the law. This makes anything they do to you, under this exemption “legal”.
Fact #5 There have been several thousand such exemptions to the law in Alberta over the years. All done with no public input, no involvement of a judge, no public notice, and no consumer representation in the actual decision making process. The Alberta Securities Commission refuses to provide reasons to show how those exemptions are in the public interest in any way. As a consumer you will get more notice of your neighbor’s plan to build a garage too close to your fence, than you will get if your financial advisory firm chooses to dump bad products on you using a legal exemption.
Fact #6 The Alberta Securities Commission is partially funded by financial dealers, and part time commissioners earn $180,000 per year. Top-level salaries at our ASC are above $500,000. Does this explain why our securities law gets “adjusted” for dealers?
Fact #7 Police are rarely invited to prosecute these kinds of financial crimes or frauds. Other criminal code violations get treated and handled by police agencies, while Securities Act violations are handled by an industry policy of letting the “financial industry look after the financial industry”. Fraud, forgery, breach of trust, etc., are among the types of illegal acts which fall under the “we look after ourselves” category. These acts will continue to occur unless we do something about it.
I ask candidates to call for a public inquiry under the Provincial Inquiries Act. An inquiry into failure to protect Albertans and failure to give the public access to the law. One case alone consists of an alleged $800 million dollar abuse of customers. Would you support such an initiative, and will you ask for public inquiry into these failures on behalf of all Albertan’s?
Larry Elford, (former CFP, CIM, FCSI, Associate Portfolio Manager, retired, 2004 after twenty years of trying without success to improve conditions in the industry)
lelford@shaw.ca
Media Release and key question for Alberta Provincial Election Candidates
From: Larry Elford, founder of http://www.investoradvocates.ca/ Representing the interests of several hundred ethically proven investment industry professionals, and several hundred thousand investment consumers.
Fact #1 Financial industry dealers are allowed to self regulate (police themselves) in Alberta.
Fact #2 Financial industry participants are allowed direct access to the law and to the Alberta Securities Commission (the ASC). In contrast, consumers are directed to a non-government body.
Fact #3 If you were to approach the ASC with a complaint, you would be referred to “self-regulatory” agencies, which are private, funded, paid, and responsible only to the industry the consumer is complaining of. Consumers are not only denied access to the protection of Securities Law in Alberta, they are forced to report financial abuse directly to the association of dealers that they are complaining of.
Fact #4 If consumers wanted to rob a financial institution, they would not be allowed to alter the law to make their robbery “legal”. When financial institutions wish to rob consumers, they are allowed to go to the Alberta Securities Commission and apply for “exemptive relief” from the law. This makes anything they do to you, under this exemption “legal”.
Fact #5 There have been several thousand such exemptions to the law in Alberta over the years. All done with no public input, no involvement of a judge, no public notice, and no consumer representation in the actual decision making process. The Alberta Securities Commission refuses to provide reasons to show how those exemptions are in the public interest in any way. As a consumer you will get more notice of your neighbor’s plan to build a garage too close to your fence, than you will get if your financial advisory firm chooses to dump bad products on you using a legal exemption.
Fact #6 The Alberta Securities Commission is partially funded by financial dealers, and part time commissioners earn $180,000 per year. Top-level salaries at our ASC are above $500,000. Does this explain why our securities law gets “adjusted” for dealers?
Fact #7 Police are rarely invited to prosecute these kinds of financial crimes or frauds. Other criminal code violations get treated and handled by police agencies, while Securities Act violations are handled by an industry policy of letting the “financial industry look after the financial industry”. Fraud, forgery, breach of trust, etc., are among the types of illegal acts which fall under the “we look after ourselves” category. These acts will continue to occur unless we do something about it.
I ask candidates to call for a public inquiry under the Provincial Inquiries Act. An inquiry into failure to protect Albertans and failure to give the public access to the law. One case alone consists of an alleged $800 million dollar abuse of customers. Would you support such an initiative, and will you ask for public inquiry into these failures on behalf of all Albertan’s?
Larry Elford, (former CFP, CIM, FCSI, Associate Portfolio Manager, retired, 2004 after twenty years of trying without success to improve conditions in the industry)
lelford@shaw.ca
Sunday, October 14, 2007
Adam Smith had "best practices" figured out 200 years ago
"The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public.
To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they would naturally be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.
The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.
It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have upon many occasions, both deceived and oppressed it."
The above comes from ADAM SMITH (1776) over 230 years ago. From "THE WEALTH OF NATIONS"
As I continue to research how and why the investment industry is the way it is I am struck by the lines above by Adam Smith. They are so simple, and so obvious, and yet so far from how the financial system in Canada is operated.
I guess I am just upset and amazed at how far smart men will stray from known best practices when pushed or pulled by self interest. By my calculations (with help from Harvard, Osgood School of business, Georgia Tech, London Business School and others) Canada is being taken advantage of by between $30 billion and $60 billion each and every year due to financial people serving themselves. Not accidently serving themselves over the clients they promise to serve. "Knowingly" serving themselves first. Knowingly selling products and advice to clients which is false, misleading and not in the interests of the clients who are paying for the advice in good faith. The bargain they are getting in return is that they are being taken advantage of. Abused financially. That is what self regulation in Canada has given us, and it will not be corrected by one securities commission or one hundred. Correcting self dealing, self serving, self regulation requires taking away the priviledge of regulating themselves. It means no longer being able to "babysit" themselves, now that they have demonstrated they are not responsible enough. It means having independant oversight placed upon the industry.
Failure to follow known best practices. Failure to identify known conflicts of interest. This leads to a failure to place client interests first, and self regulation allows this to flourish time and time again. Witness the recent Asset Backed Commercial Paper crisis, which turned out so differently in Canada, than in other countries.
So the bog here will relate to best practices, as compared to not so good practices, and will try and look at a few examples to let you decide which category gets more business in Canada. Why am I bothering? Because this was my industry, my career, my passion. What is my motivation now? I tried for ten years to work within the industry to embrace best practices, and to encourage the industry to live up to its wish to be called a profession. I failed. I was punished for trying to place the interests of clients first. I am here to try and prove that it is still the right thing to do, to place clients interest first. That is my position, that is my bias. If I need a label placed on my mission it is that.
My first awakening that something was wrong, occured in the early 1990's. The Globe and Mail was writing about a mutual fund industry practice of sending the big seller's of funds off on free trips to exotic locations. From my position within the industry this was clearly a conflict of interest in the game of giving envestment advice. I thought that others would agree and want the bad practice revealed and removed. I was wrong. My manager at that time, was attending the Indy 500 each year, courtesy of Mackenzie mutual funds, and he told me that "anyone who talks about this is fired". Not only him, I learned later, that the entire company was on alert against letting the press find out about this practice, including internal telephone record monitoring of calls to the Globe and Mail etc. It was my first eye opener that told me the industry did not necessarily walk the talk they promise.
I began to campaign quietly within the company to separate the roles of "salesperson" from the role (and the title) of "investment advisor". This separation was not welcome. In fact, rather than help move toward any form of higher education requirement, and higher duty of care for the client, I found that my bank owned firm was moving in exactly the opposite direction. They had internal plans to keep the 1000 or so, "advisors" that they already had, but to also convert the 15,000 or so, bank employees who were acting as account mangers over to financial planners and investment advisors. They were "renaming" the entire workforce as professional advisors, without so much as meeting the educational or the experience requirements. In a self regulating industry this is not so much of a problem.
Today, we find from web site http://www.osc.gov.on.ca/ on the topic of "registration", that about 90 plus percent of people in Canada calling themselves investment advisors, are actually (and legally) registered with the government as "salespersons". This is an illegal and unlawful practice according to the law, as well as the self regulatory standards, not to mention that it misrepresents to the public (illegal to misrepresent under the competition act of Canada). None-the-less, it is accepted in an industry where self regulation allows it to occur.
This is example number one of 'knowingly" using poor industry practices when best practices are overlooked in favor of profits.
To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they would naturally be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.
The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.
It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have upon many occasions, both deceived and oppressed it."
The above comes from ADAM SMITH (1776) over 230 years ago. From "THE WEALTH OF NATIONS"
As I continue to research how and why the investment industry is the way it is I am struck by the lines above by Adam Smith. They are so simple, and so obvious, and yet so far from how the financial system in Canada is operated.
I guess I am just upset and amazed at how far smart men will stray from known best practices when pushed or pulled by self interest. By my calculations (with help from Harvard, Osgood School of business, Georgia Tech, London Business School and others) Canada is being taken advantage of by between $30 billion and $60 billion each and every year due to financial people serving themselves. Not accidently serving themselves over the clients they promise to serve. "Knowingly" serving themselves first. Knowingly selling products and advice to clients which is false, misleading and not in the interests of the clients who are paying for the advice in good faith. The bargain they are getting in return is that they are being taken advantage of. Abused financially. That is what self regulation in Canada has given us, and it will not be corrected by one securities commission or one hundred. Correcting self dealing, self serving, self regulation requires taking away the priviledge of regulating themselves. It means no longer being able to "babysit" themselves, now that they have demonstrated they are not responsible enough. It means having independant oversight placed upon the industry.
Failure to follow known best practices. Failure to identify known conflicts of interest. This leads to a failure to place client interests first, and self regulation allows this to flourish time and time again. Witness the recent Asset Backed Commercial Paper crisis, which turned out so differently in Canada, than in other countries.
So the bog here will relate to best practices, as compared to not so good practices, and will try and look at a few examples to let you decide which category gets more business in Canada. Why am I bothering? Because this was my industry, my career, my passion. What is my motivation now? I tried for ten years to work within the industry to embrace best practices, and to encourage the industry to live up to its wish to be called a profession. I failed. I was punished for trying to place the interests of clients first. I am here to try and prove that it is still the right thing to do, to place clients interest first. That is my position, that is my bias. If I need a label placed on my mission it is that.
My first awakening that something was wrong, occured in the early 1990's. The Globe and Mail was writing about a mutual fund industry practice of sending the big seller's of funds off on free trips to exotic locations. From my position within the industry this was clearly a conflict of interest in the game of giving envestment advice. I thought that others would agree and want the bad practice revealed and removed. I was wrong. My manager at that time, was attending the Indy 500 each year, courtesy of Mackenzie mutual funds, and he told me that "anyone who talks about this is fired". Not only him, I learned later, that the entire company was on alert against letting the press find out about this practice, including internal telephone record monitoring of calls to the Globe and Mail etc. It was my first eye opener that told me the industry did not necessarily walk the talk they promise.
I began to campaign quietly within the company to separate the roles of "salesperson" from the role (and the title) of "investment advisor". This separation was not welcome. In fact, rather than help move toward any form of higher education requirement, and higher duty of care for the client, I found that my bank owned firm was moving in exactly the opposite direction. They had internal plans to keep the 1000 or so, "advisors" that they already had, but to also convert the 15,000 or so, bank employees who were acting as account mangers over to financial planners and investment advisors. They were "renaming" the entire workforce as professional advisors, without so much as meeting the educational or the experience requirements. In a self regulating industry this is not so much of a problem.
Today, we find from web site http://www.osc.gov.on.ca/ on the topic of "registration", that about 90 plus percent of people in Canada calling themselves investment advisors, are actually (and legally) registered with the government as "salespersons". This is an illegal and unlawful practice according to the law, as well as the self regulatory standards, not to mention that it misrepresents to the public (illegal to misrepresent under the competition act of Canada). None-the-less, it is accepted in an industry where self regulation allows it to occur.
This is example number one of 'knowingly" using poor industry practices when best practices are overlooked in favor of profits.
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