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GET YOUR MONEY BACK! Misconduct and malpractice. Investment industry "best and worst practices". Information to improve public protection. Expert witness services for industry and investors. Forensic investment analysis. • View topic - Breach of Trust

Breach of Trust

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Re: Breach of Trust

Postby admin » Tue Sep 01, 2009 11:44 pm

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I started out within the investment industry, complaining from time to time when I saw investors rights get stepped on in favor of commissions. My voice was not welcome within my firm RBC. Revenues came first, as my suit against them will show.

It then became unbearable to stay within that industry once I learned how far they were willing to go to abuse clients and to support commission generation. I foolishly still stayed long years after I should have left.

Finally, after I realized how damaging it was to my health, and my family to stay an odd man inside of an uneven system, I left, and blogged and sobbed a bit here and there. Until I learned in hindsight just what they had been doing so I took up the torch again and began my fight for honesty and ethics anew.

At first it was about bad sales practices. In the millions of dollars here and there.

Then as I learned and progressed, I learned it went well beyond sales practices into management.
Then I learned it went all the way to the top of the company.
Then I learned that entire companies were built on nothing more than "slightly" taking financial advantage of each and every investment customer to get rich. It then became about that.
Then I learned it went all the way to the top of the self regulators.
Then I learned that it went all the way to the top of the provincial regulators.
Then when I thought a mutual fund company skimming $800 million was the biggest thing I had ever seen.
Then I learned that it (the coverup) went all the way up to provincial ministers who oversaw (oversight?) the provincial regulators.
Then when I had spent three or four years documenting the largest crime I had found which was documented perfectly..........
Along came the Asset Backed Commercial Paper crisis, and a $32 billion dollar theft is dropped onto the scene.

I cannot even keep up in Canada. The system is so "worst practices" here that the number of scams, skims, and thefts of the public through the investment industry is sucking up more money than each and every other crime in the country, according to justice Canada stats.

Police and self police are at about 1980, while the crimes committed today are here and now. Police are definitely not here, and they are not now. Neither are all the authority figures in Canada. I am afraid that it is a system built on feeding and preserving the system. I only hope we can catch up some day, just to disclosure of todays crimes, much less catching and stopping them.

Now I know how wiley coyote feels. The fraudsters and banksters in Canada are a fast and smart as the Road Runner, whilst our attempts at catching them are as futile as something purchased from Acme Explosives Ltd.
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Re: Breach of Trust

Postby admin » Mon Aug 03, 2009 8:03 pm

FINANCIAL ABUSE

Many forms of financial exploitation or financial abuse are crimes. The following Criminal Code offences may apply in these situations:



theft (section 322)
theft by person holding power of attorney (section 331)
criminal breach of trust (conversion by trustee) (section 331)
forgery (section 366)
extortion (section 346)
fraud (sections 386, 387, 388)
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Postby admin » Fri Nov 09, 2007 5:07 pm

http://www.abstractmuse.com/intro.swf

view the video section of this site for an early demo or trailer for BREACH OF TRUST
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Postby admin » Tue Oct 09, 2007 11:53 pm

Imagine getting abused financially, and when push comes to shove with the financial firm you complain to, getting abused by the corporations and then getting legal abuse on top of the other.

It is threats, bullying, intimidation, and gag orders that rule the day in Canadian financial services. We should look forward to the day when credible companies like Presidents Choice, Canadian Tire and others enter this field. Perhaps they will add some honesty, integrity and competition to the current financial plunderers. Heck, the Mafia entering this field would raise the integrity up a notch.

see Barry Critchley of the financial post article below on just one firm's approach to bullying victims of financial abuse into silence


Berkshire accused of legal piling on

Barry Critchley
Financial Post

Friday, October 05, 2007
In most sports, there are various rules regarding piling on. Those who disregard them are penalized.

A group of disaffected clients of the Berkshire Group -- specifically, those who put their faith in Ian Thow, the firm's former senior executive based in Vancouver -- feel similar rules should apply to the way large and well-funded financial institutions deal with complaints.

Those clients -- who are part of a larger group who claim they lost $32-million over a period ending in the early summer of 2005 -- feel Berkshire, now owned by Manulife Financial Corp., is piling on by making them go through interminable delays, be it through the courts or through dealings with various regulatory bodies, to get satisfaction.

For instance, next Friday Berkshire was scheduled to bring a series of motions against Brad Goodwin, one of Thow's former clients, for allegedly disclosing information to a journalist. (The matter has been adjourned.) Goodwin, who along with his family has filed a lawsuit against Thow and Berkshire, has so far spent more than $200,000 on legal bills and his case has yet to reach discovery. "It's just corporate bullying," said Goodwin. "They want to get our lawyers tied up in there for three days and just bleed the life out of us. It's so expensive to fight these motions. They are absolutely doing everything they can to bury us. ?They're beating us down."

A number of Thow's former clients say they're upset, claiming Berkshire hasn't been reined in by Manulife, one of the country's most respected financial institutions. Many felt Manulife, usually lightning fast at stamping out fires, would have taken a more hands-on approach and sought to put the matter behind it after it bought Berkshire in August. As Doug MacKay, the prosecutor for the British Columbia Securities Commission said at its hearing into Thow: "He [Thow] intentionally and systematically stole millions of dollars from his clients, many of whom were elderly and apparently vulnerable to Thow's apparent charms."

Other examples of piling on:

▌According to people who have filed complaints, Berkshire has refused to co-operate with the Ombudsman for Banking Services and Investments, an independent agency whose mission is to fix conflicts between participating banking and investment firms and their customers. For the OBSI to complete its work, it needs some input from Berkshire.

▌Last January, Mr. Justice R. Goepel criticized the way Berkshire was behaving in a court case brought by George Thomson, a Nanaimo businessman and also a former client of Thow. "Berkshire's failure to comply with the rules of court and various court orders made during the course of this application is not acceptable," Judge Goepel said.

At least one body seems to be breaking free of the pile.

The Mutual Fund Dealers Association announced yesterday it has issued a notice of settlement hearing against Berkshire. The proposed settlement agreement concerns allegations that Berkshire "failed to conduct reasonable supervisory investigations of Thow, and to take such reasonable supervisory and disciplinary measures as would be warranted by the results of its investigations," contrary to two specific MFDA rules.

The MFDA has the real power over Berkshire's fate and future operations.

The hearing is scheduled for Oct. 22 in Vancouver.

bcritchley@nationalpost.com

© National Post 2007

Ian Thow

The regulators' approach can be characterized as "too little, too late," enforcement actions were too slow to be effective and rules haven't been followed. As one frustrated investor asked yesterday: What good have the regulatory bodies done?- National Post, Thow a useful teaching tool, 20 June 2007

"Like a thief in the night" - BUSINESS EXAMINER
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Postby admin » Tue Oct 09, 2007 11:48 pm

the previous post shows an article quoting CSA studies of 1 million Canadians affected by fraud

Canadian business editorials describe how RCMP IMET commercial crime units in Canada have managed to convict ONE person with two fraud charges during the last five or so years time.......while spending $100 million to accomplish this.

Thus I have to conclude that the odds are about one million to one AGAINST getting caught for fraud in Canada.
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Postby admin » Tue Oct 02, 2007 9:12 pm

Million Canadians victims of fraud: Survey
Only a minority filed complaints with most feeling authorities are too lenient with the perpetrators
TORONTO STAR
October 02, 2007
James Daw
Business Columnist

Canadians are sickened by fraud and have little confidence that authorities will catch and punish the perpetrators severely, a new survey has found.

The national poll suggests 1 million adults fell victim to investment fraud in the past 20 years and many lost more than money.

A substantial proportion of the sampling of victims surveyed report suffering both social and health consequences. Yet a small minority bothered to file complaints. Many of those who did complain felt authorities did not act.

Among those victims surveyed:

▌Two-thirds said they lost trust in others, and became less willing to invest.

▌A third became stressed and angry, a fifth depressed and isolated and a tenth or more experienced extreme weight changes, anxiety attacks or more frequent illness.

▌Between a tenth and a fifth withdrew from social and family activities, from friends and volunteer activities.

▌Nearly twice the frequency of problems was reported by those who lost $10,000 or more, and by the friends and family of victims.

Some 2,000 adults were polled earlier this summer for Canadian Securities Administrators, to bore deeper into some findings from a 2006 survey that gauged investor knowledge and practices. Results were released today as a kick-off to investor education month.

The Small Investor Protection Association argues that a two-year limitation period for filing civil lawsuits - down from six years previously - penalizes victims who suffer emotional and health effects.

The new survey by Innovative Research Group Inc. reveals that many Canadians do not know about securities commissions, and that most of those surveyed feel unprotected.

"Canadians are concerned the `system' takes fraud too lightly," the authors report.

Nearly everyone surveyed said fraud should be treated as seriously as other crimes, but more than half (51 per cent) feel it's not. Two-thirds feel fraud artists get away with their crimes, and those who get caught are given a light sentence.

A fifth of respondent reported being approached with what they believe was an investment fraud in the past three years; more when obvious email spam was counted.

Loss of trust was the leading consequence of fraud because half recent victims were introduced through a friend, neighbour, co-worker or family member.

Yet a quarter of victims admitted falling for a bogus investment scheme more than once. Three-quarters of victims never recovered their money.

Fraud, and attempts at fraud, went unreported by about three-quarters of victims. Top reasons given included embarrassment, the small sum of money involved, the time it takes to make a complaint, a lack of proof or the fact the fraudsters were based offshore, or were bankrupt.

The way 2,000 Canadians respond to different questions is considered an accurate reflection of national thinking, at least within 1.28 percentage points, 19 times out of 20.


(advocate comments : the documentary film BREACH OF TRUST is in post production. view rough cuts as they progress at www.breachoftrust.ca)
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Postby admin » Tue Sep 18, 2007 8:53 am

The violence of white-collar crime
Date: Wednesday, August 29 @ 00:00:00 EDT
Topic: Investor Education

“.. Mr. Diekmeyer, 73, says he lost $800,000 - his life's savings - when Bre-X collapsed. He also saw his personal friend and stock broker kill himself in 1997, riddled with guilt about his clients' losses."I survived with great difficulty and a friend of mine committed suicide over it," says Mr. Diekmeyer, who lives in a modest apartment in Beaconsfield, west of Montreal. "I only know this story. I'm fairly certain there are others that are equally disastrous…"

Source: J. McFarland, No winners in this case, Globe and Mail, Aug. 2, 2007


[John Felderhof, the former vice chairman and Chief geologist of Bre-X, the gold company rocked by a scandal that wiped out billions of investor dollars almost 10 years ago, had been accused by the Commission of selling $84 million worth of stock between April and October 1996, while having material information not disclosed to investors. Felderhof was acquitted on July on 8 counts of illegal insider trading and authorizing misleading news releases 7 years after his lengthy trial began. During the trial, the court heard extensive testimony that Felderhof ignored nearly two dozen signs that the amount of gold at Busang, Indonesia was insignificant. The OSC will not appeal the ruling, so in the end no one will be held accountable but small investors pain will continue for decades ]


White-collar crime is a generic term for crimes involving commercial fraud, cheating investors and consumers, insider trading, embezzlement and other forms of dishonest business schemes. The term comes from the perception that these fraudsters wear white shirts and don’t use physical force in effecting their devastating schemes. Someone who mugs a victim on the street by threatening to knife them, and steals $300, might very likely be punished with a more severe sentence than a Bre-X executive who cheats shareholders out of billions of dollars. There is an impression that white-collar crime in Canada is rare. We've all heard of Enron but how often is Nortel cited as an example of thousands of innocent people losing a large share of their life savings? The last few years, thanks to the media, Canadians are now hearing about home grown penny stock scams, Hollinger, YBM Magnex, Atlas Cold Storage (accounting fraud) and of course the infamous mutual fund market timing scandal. Lately, we've all witnessed the tail end of the Bre-X fraud that cost hapless investors $6 billion with no one held accountable.


Many more examples could be cited including the numerous business income trust implosions like FMF, the Portus hedge fund fiasco and the infamous Norbourg funds disaster. About 9,200 investors in mutual funds managed by Quebec based Norbourg Asset Management Ltd lost their money due to management malfeasance Allegedly, $130 million was misappropriated. Retail investor’s lives were turned upside down.


There were huge losses but was violence involved? We’re always hearing that white-collar crime is non-violent, no one is actually hurt-it’s “only” money. Punishments should be minimal; it’s not as if someone was beaten or knifed. Well, we use the term financial assault to describe the unsavoury actions of fraudsters, scam artists, devilish corporate executives, stock promoters and greedy salespersons who knowingly put investors at huge financial and personal risk for economic gain. The toxic combination of financial loss coupled with the corresponding psychological and physiological impact often makes the assault an unbearable experience.


We've become conditioned to reading about the billions of retail investor dollars unduly vaporizing each year in Canada. Unfortunately we’ve also grown accustomed to a lack of enforcement by regulators and the success stories of perpetrators who walk away “Not guilty” Well, we think, at least nobody was killed or required 20 stitches. It is “only “ white-collar crimes. So even if this culprits are caught, they should get wrist slap penalties, easy bail and maybe short jail terms. These are not thugs that should be incarcerated. No real harm done, right?


Think again. White-collar crime is a devastating form of financial assault


Take these two examples:

1. A woman in her early seventies had been sold some internet infrastructure and e-business technology funds in 1999. The salesman had befriended her while she was recovering in hospital from heart attack. Within the year, the funds were down 85% and most of her life's savings with them. When she found out, she had a relapse. She was dead within a month.


2.An engineer in his fifties was on a five-year assignment in Africa assisting local authorities develop a mine. His trusted adviser back in Montréal was sent the tax-free earnings and given the authority to invest in conservative securities. When he returned, his $1.5 million had been melted down to $146,000. He ended up getting divorced and suffered from depression for the rest of his life. He was never able to trust anyone again. He died a broken man existing month –to-month in a tiny one-room apartment.


Stan Buell, president of the Small Investor Protection Association likes to refer to financial assault cases as adverse life- altering events. The loss of one's nest egg is a shock that leaves many small investors stunned and immobilized. For seniors and retirees the loss is irrecoverable as time is not on their side. The real negative impact is the physical and emotional collateral damage that white collar crime causes.


Some examples from a variety of interviews, media reports and victim impact statements:


One man, who lost $400,000, had to return to work at age 72 to a physically demanding job working the night shift.


"I believe my first reactions were shock, disbelief and denial, followed by rage, resentment, guilt and then utter depression," one elderly woman observed.


"To know these people used our hard-earned money - they even took money so far back as when I was 10 years old on a paper route. The pain and hurt and always thinking of what was done to you just doesn't go away. I have nightmares"


One man and his wife were using the $2,500 interest paid out monthly on their investment to make a special vaccine from his wife's blood to fight her leukemia. But soon the payments dried up and the investment was gone. "We tried for as long as our finances would allow the treatment. It was impossible to keep up financially". His wife has since died.


“ We have been honest and trustworthy people and expected the same from others," one couple wrote. "We have many sleepless nights thinking about how we would not be able to retire as soon as we wanted."


One man, who lost his life savings of $175,000, said his golden years are shattered. "It hurts to look at your wife and tell her that we cannot afford to do much but sit around and wait for the end of our lives."


Several experienced nervous breakdowns and chronic illness since losing their nest eggs


On July 6, 2006 Madam Justice Petra Newton sentenced the 63-year-old swindler, Earl Crackower, a former financial planner at Toronto-based Worldsource Financial Management Inc., to a 5-year term behind bars and ordered him to pay $3.4 million in restitution to 43 former clients and their families. "Your conduct deprived these people of dignity and respect and the ability to care for their families and themselves in their sunset years." Crown attorney Donna Gillespie told the court that the veteran financial planner artfully manipulated and plotted "the financial, emotional and physical destruction" of his clients, including many elderly women, from 1989 to 2003, Newton told a packed courtroom filled with seniors. Besides losing their life’s savings, how were the victims affected by this life-altering event?


Adversely impacted their health and accelerated their ageing


Eliminated their capacity to trust other people


Destroyed their sense of self- respect and their dignity


Created a sense of hopelessness -an abyss of shame and self-doubt


Paved the road for many of them to near destitution.


Caused terrible stress within families


Caused them to have to get part-time jobs to help make up for the losses, despite their ill-health


Made it impossible to ever buy any gifts for their grandchildren –living with a broken heart


Destroyed any hope of leaving a legacy to family members


In other cases we’ve also heard of marital breakdown, severe emotional distress, nervous breakdowns, heart attacks, drug over-dose and even suicide.


Former Enron employees who thought they'd be well off have abandoned retirement visions that included taking pleasure trips and financing philanthropic projects. Some, at the end of their careers, have started over again in new jobs - but working harder to keep up with younger co-workers. They've turned to churches and food banks to eat, sold homes they could no longer pay for, and endured financial stresses that frayed and ultimately destroyed their marriages. One Enron employee lost it all: his job, the money in the stock and his pension plan that held Enron stock. He was laid off, and he and his wife got by on $1,200 a month in unemployment until that ran out after six months. His wife, a hairdresser, was disabled and couldn't work. He was out of work for more than two years. The family house was put into foreclosure, a home they had owned for 25 years. He remains a bitter man. A number of cases have been documented involving suicide resulting directly from the Enron collapse.


The pain is amplified should a determined investor seek to obtain restitution.


"I don't know if I'll ever be able to recover my life after losing $800,000. I feel I have been living in hell for the last few years. The determined defense of the firm’s ombudsman wore me down emotionally. After 3 years I decided to back out but it has taken a terrible toll on me. I’m now on a permanent pill popping regime to keep me from depression After losing my home and my wife, I now live in a tough neighbourhood and fear for my safety ”


The journey to a successful complaint conclusion can be aggravating, time consuming and add stress to an already stressful situation. Restitution claims require diligence, persistence, determination and a thick skin. You’ll be made to look stupid or greedy by the financial institution. The case will be drawn out with carefully crafted letters that make you look unreasonable. If the firm drags out the proceedings long enough you could lose your right to civil litigation thanks to shortened statute of limitation periods introduced in 2004.


Regulators will refer you to the MFDA and IDA. They in turn will advise you that they may be able to fine or sanction those involved but they can’t get you your money back. If you attempt civil litigation, expect to spend thousands of dollars in legal bills with an uncertain result. You can try industry-sponsored OBSI but don’t expect a quick answer or a high probability of ever seeing your hard earned money back. Assuming all has gone well, a rare event, you'll have to sign a settlement release order in order to receive compensation. Part of this may be a “ gag” order preventing you from discussing the case or the terms of settlement with anyone else including others damaged by the scam. The entire process is designed to deter claims and frustrate resolution .It thus adds further to the pain and amplifies the anger and despair. No wonder so few bother to complain.

Insurance fraud, a variant of financial fraud, can have a devastating effect in that a persons life can be disrupted, expected insurance is not there when needed or when seriously ill people who purchased phony health insurance find their credit ruined when they couldn’t pay large medical bills after their policy refused to pay.http://www.insurancefraud.org/impact_statmnt.htm. The effects can be traumatic.


The horrific Eron Mortgage fraud is encapsulated in a classic study of the impact on victims-it’s a must read http://www.bcsc.bc.ca/uploadedFiles/Ero ... _Study.pdf

Let’s examine the role of securities commissions in dealing with white-collar crime. The provincial securities Acts are regulatory in nature and not penal. The focus of regulatory law is the protection of societal interests, not punishment of an individual's moral faults. The Portus hedge fund, Norburg mutual fund and the infamous mutual fund market timing cases demonstrates just how ineffective Canadian regulators are in dealing with white collar crime As the Supreme Court has stated: "While criminal offences are usually designed to condemn and punish past inherently wrongful conduct, regulatory measures are generally directed to the prevention of future harm through the enforcement of minimum standards of conduct and care." Basically this leaves victims of white-collar crime unprotected. Securities regulators typically deal with "capital market" offences such as insider trading, misrepresentations in public documents and illegal trading in securities. Their usual sanctions involve fines or orders restricting future activity, such as cease-trade orders or orders prohibiting an individual from serving as a director or officer. Big deal, if you’ve suffered huge financial losses and your life has been turned upside down.


White-collar crime, such as corporate fraud, typically spawns complex, time-consuming and document-intensive cases. Unfortunately, most prosecutors and judges (especially at the Provincial Court level) have little experience with such kinds of cases. Police forces and Crown prosecutors need to allocate the resources to pursue commercial crime with the same effort as violent crime. Parliament needs to adopt stricter sentencing guidelines so that judges can treat commercial crime with the same degree of seriousness as violent crime. A National regulator may make some minor improvements but that is not the real solution for retail investors. Until there is an appropriate response to criminal misconduct in Canada's capital markets i.e. for the federal and provincial governments to treat it as a criminal rather than a regulatory problem and assign to it the high priority and necessary resources which it requires, financial assault will remain unpunished and investors uncompensated. That’s the sad reality in Canada today. John Reynold’s book the Naked Investor makes this abundantly clear, so choose your investments and advisers as carefully as you would any other important element of your life. You are all alone and naked if things go wrong.

To learn more about the issue visit http://www.scamvictimsunited.com/ and read the Fraud Victims Manual at http://www.fraudaid.com/How-To-Deal-Wit ... /index.htm A U.K. Report worth a read is Research of impact of mass marketed scams (A summary of research into the impact of scams on UK consumers). December 2006; 83 pgs http://www.oft.gov.uk/shared_oft/report ... oft883.pdf.

And what makes robbers bold but too much lenity?[ leniency]


- William Shakespeare, Henry VI, part III

White-collar crime really does prove that the pen is mightier than the sword and its swath just as lethal. Hopefully, our broken justice system will soon catch up with this reality.


Ken Kivenko


kenkiv@sympatico.ca

Information contained herein is obtained from sources believed to be reliable, but the accuracy is not guaranteed. The material does not constitute a recommendation to buy, hold or sell. The purpose of this Document and others in the series is to educate investors by bringing together personal finance information from a variety of sources. It is not intended to provide legal, investment, accounting or tax advice and should not be relied upon in that regard. If legal or investment advice or other professional assistance is needed, the services of a competent professional should be obtained.

This article comes from Canadian Fund Watch
http://www.canadianfundwatch.com

The URL for this story is:
http://www.canadianfundwatch.com/module ... cle&sid=52
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Postby admin » Wed Aug 08, 2007 5:16 pm

Misrepresentation
From Wikipedia, the free encyclopedia
Jump to: navigation, search

In contract law, a misrepresentation is a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.

Types of misrepresentation
Four types of misrepresentations are identified with different remedies available:

Fraudulent misrepresentation (Derry v Peek) occurs when one makes representation with intent to deceive and with the knowledge that it is false. An action for fraudulent misrepresentation allows for a remedy of damages and rescission. One can also sue for fraudulent misrepresentation in a tort action. Fraudulent misrepresentation is capable of being made recklessly.[4]
Negligent misrepresentation at common law occurs when the defendant carelessly makes a representation while having no reasonable basis to believe it to be true. This type of misrepresentation is relatively new and was introduced to allow damages in situations where neither a collateral contract nor fraud is found. It was first seen in the case of Hedley Byrne v. Heller [1964] A.C. 465 where the court found that a statement made negligently that was relied upon can be actionable in tort. Lord Denning in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 108 however, transported the tort into contract law, stating the rule as:
if a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another…with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable
Negligent misrepresentation under Statute, enacted by the Misrepresentation Act 1967. When dealing with a negligent misrepresentation it is most lucrative[5] (joint with fraudulent misrepresentation, Contributory Negligence notwithstanding[6]) for an action to be brought under statute law as the burden of proof that is required passes to the person who made the statement. So it is for the person who made the negligent statement to prove that the statement was either not one of fact but opinion and that "had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true"[7] - the so-called innocent defence.
This creates an inconsistency of law due to the low burden and damages being calculated as extensive as those under fraudulent misrepresentation whereby a "wicked mind"[8] is the basis of action. It is, to use the words of Rix J, "a mighty weapon"[9]. Due to academic and judicial criticism in this area, the law is ripe for reform - probably adjusting the measure of damages to that of negligent misrepresentation at common law.[10]
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source www.canadianfundwatch.com

Postby admin » Wed Aug 01, 2007 5:13 pm

White collar crime has a very dark side

We’re always hearing that white-collar crime is non-violent, no one is actually hurt-it’s only money. Punishments should be minimal; it’s not as if someone was beaten or knifed or killed. Well, we use the term financial assault to describe the unsavoury actions of fraudsters, scam artists, devilish corporate executives, stock promoters and greedy salespersons who knowingly put investors at risk for high commissions. The toxic combination of financial loss coupled with psychological impact often makes the assault a truly life- altering event. A recent case involving the sentencing of former Saxton Group director Mark Allan Eizenga highlights some of the non-monetary effects of this form of assault] taken from several of the 200 victim impact statements presented at his trial]. Here’s but a few:
• One man, who lost $400,000, including half the value of his home, had to return to work at age 72.
• "I believe my first reactions were shock, disbelief and denial, followed by rage, resentment, guilt and then depression," one woman wrote.
• "I don't know if I'll ever be able to retire," said one man who lost $803,699. "I feel I have been living in hell for the last few years."
• "To know these people used our hard-earned money -- they even took money so far back as when I was 12 years old on a paper route. "The pain and hurt and always thinking of what was done to you just doesn't go away," he wrote.
• One man said he and his wife were using the $2,000 interest paid out monthly on their Saxton investment to make a special vaccine from his wife's blood to fight her leukemia. But soon the payments dried up and the investment was gone. "We tried for as long as our finances would allow . . . the treatment. It was impossible to keep up financially," he wrote. His wife has since died.
• “ We have been honest and trustworthy people and expected the same from others," one couple wrote. "We have many sleepless nights thinking about how we would not be able to retire as soon as we wanted."
• One man, who lost his life savings of $160,000, said his golden years are shattered. "It hurts to look at your wife and tell her that we cannot afford to do much but sit around and wait for the end of our lives."
• Others spoke of sleepless nights, nervous breakdowns and illness since losing their savings.
Of course we’ve also heard of marital breakdown, severe emotional distress, heart attacks and even suicide. Non-violent you say? Source: J. Sims, Cheated investors tell tragic tales of losses: Mark Allan Eizenga is sentenced to eight years in prison for a $40-million fraud scheme, London Free Press, July 18, 2007 To learn more about the issue visit http://www.scamvictimsunited.com/ and read the Fraud Victims Manual at http://www.fraudaid.com/How-To-Deal-Wit ... /index.htm


from www.canadianfundwatch.com
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Postby admin » Sun Jul 08, 2007 10:13 am

from the two previous posts, we get an impression (one mans impression) of the magnitude of how Canadians are being taken advantage of by financial professionals (or salesmen calling themselves professionals).

Below is an example of our sercurities police in action. When reading it, one of the items that comes out is that the securities police will only bring enforcement against small players. They are so captured (again my opinion) by the large dominant firms that their attention seems to turn toward regulating the little guys while acting to allow the large firms to be immune from the rules.

"ASC concludes settlement with Edmonton man


Starr fined $18,000 for illegal distribution of securities


Thursday, July 5, 2007


By IE Staff


Advertisement


An Edmonton man has reached a settlement with the Alberta Securities Commission (ASC) after admitting to breaching Alberta securities laws.

In a settlement agreement, Patrick Starr admitted that between 2004 and 2005 he raised approximately $249,000 from 35 Alberta investors through the illegal distribution of securities of Innovative Energy Solutions, Inc.

Under terms of the Settlement Agreement and Undertaking, Starr paid $18,000 to settle the ASC allegations against him and $3,000 towards investigation costs.

In addition, Starr will refrain for a period of three years from trading in or purchasing securities (with certain exceptions), or acting as a director or officer of any issuer in Alberta.

A copy of the settlement agreement is posted on the ASC website at www.albertasecurities.com. "


If there is accuracy to estimates of white collar abuse of the public in the tens of billions each year, then to read of these kinds of settlements by our securities police brings to my mind the image of fighting a forest fire using squirt guns.
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Postby admin » Tue Jun 26, 2007 2:58 pm

Totals $ 62.3 billion

With abusive practices amounting to near $40 bil per year, plus the income trust issues of some $24 bil etc, it would appear possible that the financial services industry has gouged Canadians to the tune of half a TRILLION dollars over the past decade. That might explain the ease with which these firms announce billion dollar profits, while paying executive compensation, fines, suits ($2.4 bil for Enron alone) of hundreds of millions. Now the only question is how much do they have to repay the Canadian public for this financial abuse, and who will force them to pay. Again, a Royal Commission is requested to firmly determine the damages.

Sources of data to follow:


Mutual fund fee source. “The $25-billion pension ‘haircut’” By Keith Ambachtsheer, Rotman Center, University of Toronto.
http://www.theglobeandmail.com/servlet/ ... robAgenda/


Mutual fund fee source. “Losing Ground”, SPRING 2007 • CANADIAN INVESTMENT REVIEW
BY KEITH AMBACHTSHEER AND ROB BAUER

Keith Ambachtsheer is director of the Rotman International Centre for Pension Management at the University of Toronto. Rob Bauer is professor of finance at the University of Maastricht in the Netherlands.

Mutual fund fee source. “Mutual Fund Fees Around the World”
Electronic copy available at:
http://ssrn.com/abstract=901023
Or
http://papers.ssrn.com/sol3/papers.cfm? ... _id=616981


Ajay Khorana, Henri Servaes, Peter Tufano
College of Management London Business School, Harvard Business School
Georgia Institute of Technology

Bad Income Trust sources. “Charge Trusts With Fraud, Groups Urge” National Post Friday, April 27, 2007 article by Jonathan Chevreau
http://www.investorvoice.ca/Regulators/PI/3025.htm



Bad Income Trust sources. Diane Urquhart presentation to House of Commons Finance Committee.
See document attached

Bad Income Trust sources.
http://www.canadianbusiness.com/columni ... 5459_85459


Underwriters acting as undeclared dual agent
Investment Bankers sell off unwanted or overpriced shares, while simultaneously offering them to their “retail” clients as choice and or undervalued investments, without clear disclosure of this conflicted role.
Question: How many junk issues have been dumped on Canadian clients by those underwriters knowingly?



Selling the “house brand” fund
See “Breach of Trust” documentary film yet to be released, in which research shows that the industry claims "twelve to twenty six times" greater revenue from selling proprietary (house-brand) funds than from selling independant funds. Changing to this business model (if you can stomach the abrogating of resposibility to the client interest first) can allow your firm to be worth many many times more money.
Combine this "house brand" fund trick with the fact that the street is paying twelve to fourteen times multiples for investment firms revenues means that if you convince your clients to dump independant funds, sell them the house brand, you are at least ten years closer to being able to sell your investment firm shares and put 50 to 100 million in your pocket. All of the above, meets with approval of, and is often assisted by provincial securities commissions.

Abuse of fee based accounts
No investigations so far in Canada, but see US Securities regulators for alerts to the problem and damage awards for US clients.
http://www.nasd.com/PressRoom/NewsRelea ... SDW_014804



Market timing $300 Million according to press accounts, and public record



Deferred Sales Charge abuse
Source of stats on DSC sales Investment Funds Institute of Canada
www.ific.ca

Source of improper nature of selling clients the highest compensation choice of fund class:
http://www.nasd.com/InvestorInformation ... SDW_005975

Discussion point: If approx $20 bil in mutual funds are sold each year, and the majority of these “sales” are done using the highest compensating choice to the “advisor”, does this constitute true advice or is the highest compensation choice a case of misleading the client to their detriment and to the advantage of the salesman?
Does the industry owe the Canadian public a 5% compensation payment for all mutual funds sold under this “highest comp scheme?” Were clients given a choice or sold the solution best suited to the “advisor”.
Last edited by admin on Sun Jul 08, 2007 10:26 am, edited 1 time in total.
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Postby admin » Mon Jun 25, 2007 7:44 pm

White collar crime in canada is more profitable than Oil, or
Vegas, or………

Executive summary:

Fraud, white collar crimes that go unreported, uninvestigated, or swept under the carpet by regulators co-operative with the industry, abuse of Canadians, abuse of trusting and vulnerable elderly investors, all the subtle systemic abuses that do not quite appear as criminal acts, and instead are shrugged off as somehow “normal” behavior……………………..

…………………….these injuries brought down upon everyday Canadians, by a financial system bent on self serving, assisted by a regulatory system feeding upon this industry…………………

………………these “acts” against the public good by an industry that promises trust and integrity, are costing Canadians the equivalent of $1000 to $2000 “per person” for every man woman and child in Canada each year.

Making undetected white-collar crime a greater moneymaker than all the gaming and casino operations in all of Nevada.

Making it annually “skim” enough capital from Canadians wallets to fund the budget for the province of Alberta for one or two years.


Method of Fraud....................Example.................Cost to Public


Mutual fund fees .............Top fees in world......$25 bil each year

Bad Income trust schemes........Selling junk to seniors.....$24 bil

Underwriters acting as..............Eaton’s etc., .....$10Bil/year
bad dual agents

Selling the “house brand” fund.......Proprietary funds............$1 bil

Abuse of fee based accounts.........double dipping.....$1 bil per year
Putting buy and hold
clients in fee accounts


Market timing ................firms manipulating funds.....$300 mil

Deferred Sales Charge abuse.......selling clients the high cost choice..............$1 bil per year

Totals $ 62.3 billion


Sources of data to follow
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Postby admin » Thu Jun 14, 2007 11:53 pm

It is funny how time fly's when you are having fun.

Breach of Trust continues to grow and get closer to becoming something. See www.breachoftrust.ca site for some preview stuff.

Also clear, from the research and study, is that Canadians are being gouged to quite a tune by our financial services system. I am not talk ing about, nor am i interested in run of the mill criminals, who break the law, steal things etc. Those should be no brainers for a seven year old to figure out.

I am more concerned with fraud and systemic abuse of clients, by professionals, by entire industries, major corporations, and regulators.
These things cause lives to be altered, persons to be used and abused, without the recourse of a normal crime. Police look the other way, since it "appears" that all is well. Politicians are not properly informed.

Breach of Trust, the film is getting around to understanding some of the numbers, but for now, and to be rather conservative, facts would appear to support a statement like this:

"Abuse of clients, in subtle, often invisible self serving ways by financial service industry professionals, or those claiming professional status in this industry is responsible for enough cost to pay every man, woman and child in Canada at least $1000 dollars." "Each year."

Think about this the next time you hear of the quarterly profit figures announced by your favorite financial institution.

Self dealing
Misrepresentation
Self policing
Double dipping
acting on both sides of underwriting transactions (dual agency) without disclosure
Underwriting of "please dump this shit" products like some income trusts, Eatons.........................$25 bil on some income trust analysis
intentionally tainted research to support underwritings.....Nortel?
Mutual fund fees found to be 2% to 3% higher in Canada than world average costs......$15 to $22 bil each year
Proprietary funds....(selling your "house brand")........$1 bil each year
DSC "HIGHEST COMP" selling of funds..........$1 bil each year
legal exemptions granted to help move junk off the shelf........$X billions per yr


It would be rather easy to find $33 bil in annual costs to Canadians for this kind of "intentionally tainted" investment product. The product is advice, and when the advice given is in the interests of the giver and not the person asking, paying, or receiving the advice, it is tainted.

No other industry in the world (outside of China) is allowed to get away with putting so much "tainted product" on the market knowingly.

A full Royal Commission into white collar crimes, frauds, financial abuses by the very industry that is promising to serve Canadians is necessary to clean up this industry and this country.

Last, but not least, this fact. With every mutual fund survey done this year by independant universities from around the world suggesting that Canadians have the distinction of paying the highest mutual fund fees in the world........BY FAR..........here is the cost to you.

Squeezing just 2% more profit from each client's mutual fund portfolio (which is included in every investment firms unwritten marketing strategy) will do the following two things:

1. it will cut IN HALF the amount of money each given dollar you invest can grow to after 35 years time.

2. it will place the other half of this cut in the hands of your trusted financial firm.

Results. If your personal retirement target amount was $1 million dollars, and you were on track to obtain that amount.........this simple 2% trick (which every firm is working hard on) will cut your future nest egg in half and put the other $500,000 into the hands of your retirement planner.

Now you know how those firms announce billion dollar profits.

Ask, no, TELL your member of parliament you want to see a public inquiry into the matter of Canadians being abused by white collar crime, fraud and financial abuse. Or vote for the party that acts like they care about this topic.
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Postby admin » Thu Oct 12, 2006 10:23 pm

editing continues on Breach of Trust. We may need some additional help to keep up with the time frame or we risk running behind a bit.

The film is changing as it unfolds, as history is being written while we film. The study of mutual fund fees comes out supporting much of what investment critics, and public advocates have been saying for some time. Legal cases and headlines are being made repeatedly by those in the industry who are of interest to this film. Financial predators are of special interest, and they continue to make themselves front and center with a strange conbination of greed, hubris and whatever else drives em.

Regulators still fail to protect the public interest in Canada, and instead seem determined to mine the job for a six figure salary and for the potential to gain with the next job posting to the very industry they are supposed to protect us from.

Self regulation (delegating rule enforcement to industry associations) continues to be like asking the hells angels to "take care" of all cocaine offenses in the country. It would save the police a ton of time, wouldn't it?

Clients keep suffering from abusive, misrepresentative treatment from an industry that cannot decide if it is firstly a "profession, and secondly a profit center, or vice versa.

The best minds in the business estimate that between 50% and 80% of people who make a living from sales or from asset gathering (fees) in the investment products game are either falling to the lure of self interest before client interest, or if not outright "bad apples", they just do not know the job well enough to know the responsibilities to the public that they carry with them.

The film hopes it will be given a chance to change some of the above. If it does not, then perhaps someone who sees the film will learn from it, and maybe that person will do something to lessen the abuse taking place on members of the public.

Finally, if you think abuse is too strong a word, read the Harvard, London Business School, Georgia Tech joint study on world mutual fund fees.
http://icf.som.yale.edu/pdf/seminars05-06/Servaes.pdf

They discuss how Canadians pay triple to quadruple the kind of costs that our neighbors to the south pay for mutual funds. And they are not even considering the proprietary funds that nearly each investment seller is now trying to get clients to buy. If you can get 2% to 4% or higher fees from clients in Canada due to dysfunctional and fractured regulators, imagine if you can start to "manufacture" your own mutual funds and put the entire fee into your own firms pocket instead of paying independant mutuals.
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Postby admin » Thu Sep 21, 2006 9:48 pm

finally a moment to update the breach of trust topic

it has turned into a fascinating journey across the country, interviewing people from all avenues. A documentary film is the expected and hoped for outcome, and we have 80% of it in the bag.

Now it is editing, cutting and putting things together. It will be shocking to the vast majority of Canadians if my early reactions are any indication. The public is just not aware of the magnitude and the magnetic attraction of the money business, and they truly want to believe that it works the way those in it say it works.

That is what we hope will create such a stir for the film.

Early screenings of rough cuts etc, are planned, to host MP's, senators, media persons, legislators. They will be part of a campaign to have a judical review or commission of inquiry appointed on one or more of the topic areas that the film touches.
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