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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 - Fraudsters in the US get caught. In Canada they get rich.

Fraudsters in the US get caught. In Canada they get rich.

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Postby admin » Thu May 04, 2006 10:43 am

according to Rueters News ("US Securities Lawsuits Fall, Payouts Soar, Globe and Mail Wednesday, May 3, 2006)

The number of private securities suits fell in 2005, to the lowest number in nine years, but the dollar value of settlements was up 156%.

The suggest that a partial reason may be the effects of Sarbanes Oxley and more aggressive actions by government regulators and law enforcement officials at cracking down on white collar and securities crime, while the reason for the increase in dolalr value, is attributed to increased pesisitence of investors, and institutional investors who are less likely to be beaten in court by an imbalance of legal might. The dollars are getting large enough to not be able to settle with a weaker opponent for pennies on the dollar.

Without counting Enron or Worldcom,, in 2005 there were 29 cases settled for more than $20 million, and 20 of those were for over $60 million. Eleven cases were for over $100 mil. (CIBC paid over $2 bil out for Enron)

"The level of fraud see in the past ten years in corporate america goes far beyond what any plaintiff's lawyer ever imagined", said Richard Schiffrin or Pennsylvania law firm Schiffrin & Barroway.

Advocate comments....................compare these settlements to wrongdoings in Canada. There are virtually no settlements like this. There are virtually no Security agency settlements, and no law enforcement prosecutions. When one considers that the provincial securities commisions, the IDA, the MFDA, MRS, IFIC, etc., etc are all sponsored or funded by the industry, it is no surprise that clients are not getting impartial and effective securities regulation in Canada.
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Captains Quarters - Canadian Court's on Corruption

Postby urquhart » Sat Mar 04, 2006 8:39 am

Brault Capitulates
Yesterday, key Adscam figure Jean Brault pleaded guilty to almost all of the charges filed against him but curiously chose to fight the conspiracy charge that remained. This curious legal strategy intrigued the Canadian press, who discovered that he did not get a deal from prosecutors in exchange for the plea:

Jean Brault, an advertising executive who founded Groupaction Marketing, has pleaded guilty to five of six fraud-related charges against him in the sponsorship scandal.
Brault is one of three high level executives who face charges in the scandal.

Brault pleaded not guilty to the remaining charge of conspiracy and will go to trial on that charge at a later date.

Brault did not seek a plea bargain, said his lawyer, Jacques Dagenais.

"There was no bargain,'' Dagenais told the Canadian Press after the court appearance. "As you can see the charges are all there.''


This seems rather strange. Why plead guilty to all of the other charges without any agreement on sentencing while planning on fighting the one charge left standing? Why not just fight them all?

No matter how strange that legal strategy may seem, it still doesn't get worse than that chosen by Chuck Guité. The other co-defendant in the indictment told the court yesterday that he planned to represent himself. Guité explained that he cannot afford an attorney for his defense. After all of the information that the Gomery report has found, Guité probably can't afford not to have an attorney.

On the other hand, given the light sentence that Paul Coffin got -- two years in the community and a commitment to speak out on ethics -- perhaps neither of them particularly worry about the adverse consequences of their decisions. Canadian courts do not seem to take corruption very seriously.

Posted by Captain Ed at 11:46 AM | Comments (6) | TrackBack (0)
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Another trial that you have never seen in Canada.......

Postby admin » Fri Mar 03, 2006 9:32 am

Here is an article about the Enron Trial. The point I try to make with articles like this is that here in Canada, trials like this do not exist. Not because white collar crime does not exist in Canada, but because our particular Canadian system allows white collar crime, almost encourages it. Regualtors cannot and will not stand up to some of the powerful and concentrated interests in Canada. I look forward to the day when this may change.


Posted 3/1/2006 11:16 PM Updated 3/2/2006 2:07 PM

Ex-Enron exec says he was "in denial" about fraud

By Greg Farrell, USA TODAY

HOUSTON — A key witness in the government's trial of former Enron CEOs Ken Lay and Jeff Skilling explained Thursday morning how he went from being in "denial" about Enron's manipulation of its earnings statements to acceptance that he was guilty of participating in a fraud.
David Delainey, 40, the former head of Enron Energy Services (EES), described how he met with the FBI several times after Enron's collapse and how he tried to avoid incriminating himself. "I was in denial as to the conduct I was involved in," he said under cross-examination by Lay attorney Mike Ramsey. "I was very hopeful that the whole thing would pass me by, but it didn't."

Ramsey suggested that the only reason Delainey pleaded guilty to one count of inside trading was not because he had committed any crime, but because he didn't want to defend himself from multiple charges in a long trial. But Delainey insisted he was guilty and that he would have been convicted if brought to trial.

"I was taking responsibility for my actions," he said. "My dad told me a long time ago, if you're in a hole, quit digging."

At another point in his cross-examination, Ramsey described as a "nutcake" a disgruntled former employee who had figured out that Enron Energy Services was hiding losses.

That former employee, Margaret Ceconi, had written a long letter to Enron's board of directors in August 2001 citing millions of dollars in EES losses that had been magically scrubbed from the division's books. But rather than tackle any of the substantive issues raised by the letter, Ramsey asked Delainey about a confrontation he had with Ceconi at a bar in July 2001, shortly after she'd been dismissed.

Delainey testified that he was having a drink with several colleagues at Mia Luna in a fashionable section of Houston. Ceconi approached him, he recalled, and said, "I don't know how you guys made your second quarter numbers. You must have manipulated results."

The verbal exchange led to a shoving match outside the restaurant between Ceconi and an EES employee, Angela Schwartz. Ramsey suggested the confrontation was a "fistfight," but Delainey, who stayed inside, only said he'd heard there was some shoving.

On re-direct, prosecutor Kathryn Ruemmler asked about Ceconi's whistle-blowing letter to the board. She showed Delainey an email chain showing that the memo had been passed to CEO Ken Lay, CFO Andrew Fastow, and Enron president Greg Whalley.

"This letter, from the 'nut job,'" asked Ruemmler sarcastically, "is being circulated to the highest levels of Enron, isn't it?"

"It appears so, yes," said Delainey.

Kevin Hannon, another former Enron executive who has pleaded guilty and is cooperating with the government, was scheduled to testify Thursday afternoon.

The trial is proceeding so quickly that prosecutors said Wednesday they probably wolud be finished presenting their case by the end of March, two months ahead of the original schedule.

As part of the accelerated schedule, prosecutors said they plan to call their star witness, former Enron chief financial officer Andrew Fastow, early next week.

The disclosures followed a full day of cross-examination of government witnesses by defense lawyers. Daniel Petrocelli, Skilling's lead attorney, spent Wednesday afternoon hammering at statements made Tuesday by David Delainey, former head of Enron Energy Services.

Delainey, a boyish-looking Canadian who rose rapidly through Enron's management ranks from 1998 to 2001, admitted that he lied repeatedly to employees and the investing public during his tenure at Enron.

Petrocelli tried frequently to rattle him by pointing out inconsistencies between statements made before and after his decision to plead guilty to one count of inside trading. But Delainey stood by his allegations that Skilling headed a conspiracy to hide the true financial condition of the Enron from analysts and the investing public.

In particular, Delainey pointed to a meeting in Skilling's office on March 29, 2001, as a moment he regretted. At that meeting, he, Skilling and other managers sat around a table and agreed to move the operations of EES over to the company's wholesale group. Delainey maintained that the entire reason for the move was to hide $200 million in EES losses from investors.

"I wish on my kids' lives that I had stepped up from that table and walked away," he said.

Petrocelli showed the witness a copy of the accounting rule that allowed companies to move operations from one business segment to another if it made sense. Didn't Enron have a strong reason to combine its retail business with its wholesale operations, he asked.

"It wasn't very strong," Delainey replied. "It was completely outrageous at the end of the day."

Delainey admitted that when he first heard of the plan to transfer the losses from his division to another Enron unit, it seemed like a clever way of solving the problem.

"But over the following 24 hours, it seemed we were using accounting as an excuse not to tell our shareholders what was going on," Delainey testified Wednesday. "After thinking about it for 24 hours, I knew it was wrong."

The government has accused Lay and Skilling of heading a conspiracy in 2000 and 2001 to deceive investors about the financial condition of Enron. In the first five weeks of the trial, prosecutors have focused on bullish statements the two men made about Enron Broadband Services and EES. Several witnesses have testified that the two units were bleeding money.
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Fraudsters in the US get caught. In Canada they get rich.

Postby admin » Sun Jan 29, 2006 11:41 pm

2. Investment bank error in your favor. Collect an additional $1.43 billion.


The judge in billionaire Ronald Perelman's lawsuit against Morgan Stanley, exasperated by the latter's delays in handing over documents, instructs jurors to assume that the firm committed fraud. The bank insists it isn't stonewalling, just running into technology glitches. The jury awards Perelman -- who had sued Morgan over its role in his sale of Coleman to Sunbeam for stock that became worthless after an accounting scandal led to bankruptcy -- $1.45 billion in damages. Perelman had reportedly offered to settle for $20 million.

http://money.cnn.com/magazines/business ... full_list/
Last edited by admin on Sun Oct 19, 2008 1:40 pm, edited 1 time in total.
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