Solutions, Self Defense and Best Practices

[admin]

A few things come to mind as I read the previous column by Stephen Sibold.

First is appreciation, that someone with industry experience is having the courage to speak to how the industry really is, and that there is shortcomings that cause crimes to go unpunished against Canadians.

Second is anger that this was not the approach taken during the tenure when this same writer was earning a mid six figure income as one of the top cops in this same industry. I feel grateful for honesty today, but still resent the fact that so many Canadians have been hurt by a lack of honesty from those on the "inside". (Several of Stephen Sibold's former employees at the Alberta Securities Commission are out of the agency with lives and careers damaged for similarly trying to speak their truths while employed there)

Third is relief, in that the writer is as much as admitting that the system is out of touch with reality, and needs to be fixed.

Lastly, I am saddened for all the Canadians over the past several decades who have suffered financially, been taken advantage of, abused or defrauded, and have had to suffer the further crimes of a self regulatory system which forces them to go without compensation, retribution or justice. Lives have been ruined.

I wonder if any of the other Securities Commissions in Canada will stand up and speak candidly on investor protection, or will they remain comfortably tucked under a $500,000 salary blanket while Canadians are frozen out of the justice they deserve?


They seem to want to leave things much as they are, and I wonder who they are truly thinking of?

(Breach of Trust is a criminal offense under section 122 of the Canadian criminal code, and it roughly pertains to an official serving himself or others at the preference or expense of the public interest)

[admin]

Want U.S.-style regulation?
STEPHEN SIBOLD

Stephen Sibold is a lawyer with Bennett Jones LLP in Calgary, currently studying at the University of California, Berkeley as a 2007-2008 Canada-U.S. Fulbright Scholar. He is a former chair of the Alberta Securities Commission and former chair of the Canadian Securities Administrators.

August 20, 2007 at 6:20 AM EDT

If we wish to "get tough" with criminal misconduct in Canada's capital markets, governments need to begin treating this conduct as a matter of criminal law rather than securities regulatory law.

The recent convictions in the Hollinger case in the United States have, predictably, fuelled debate in Canada as to whether similar cases would have been pursued here - let alone concluded - with the same vigour. Critics frequently cite the absence of a single national securities regulator as the root cause of the perception that Canada does not have as strong - or fearsome - a commitment to enforcing securities laws as does the United States.

While the attention of commentators has been focused primarily on the enforcement record of securities regulators, I believe that the more fundamental issue to address is how Canada deals with serious "white-collar" or commercial crime in its capital markets as a matter of criminal law.

First, we need to understand the fundamental differences between regulatory law and criminal law. Unlike the Criminal Code, 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. 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."

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.

It is important to appreciate that all of the recent high-profile corporate scandals in the United States - Enron, WorldCom, Tyco and Adelphia, to name a few - have involved prosecutions of criminal law, not enforcement of securities legislation. The accused in those cases were charged by prosecutors under criminal laws and convicted of criminal offences, fraud being common to all.

Second, we need to understand some critical differences between the treatment of white-collar crime under the respective criminal justice systems in the United States and Canada. Unlike Canada, strict sentencing guidelines exist in the U.S. for federal offences. For example, Bernard Ebbers of WorldCom fame could have been sentenced to 30 years imprisonment under U.S. federal sentencing guidelines (rather than the 25 years that he received).

While U.S. state judges have more latitude in sentencing, the state judge in Tyco sent a strong message by his sentencing of Dennis Kozlowski to 81/3 to 25 years imprisonment. In Canada, no such sentencing guidelines exist and there is little precedent for lengthy prison sentences for individuals convicted of commercial fraud.

Indeed, last year, a Quebec judge sentenced Chuck Guité to 3½years in prison for his conviction on five counts of fraud. The United States - at both the federal and state levels - takes a much tougher approach than Canada to white-collar crime.

So, what must be done in Canada if we wish to "get tough" with criminal misconduct in our capital markets? We must first acknowledge that serious white-collar crime is properly the purview of the criminal justice system and not the securities regulators. The federal and provincial governments then need to make enforcement of white-collar crime a higher priority and allocate appropriate resources to it. For example, police forces, prosecutors and judges need specialized training. 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 had little opportunity to acquire 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.

The appropriate response to criminal misconduct in Canada's capital markets is 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.

source Aug 20, 2007 Globe and Mail newspaper

[Stan Buell]

Last spring I met with Dan Braniff, founder of the Common Front for Pension Splitting. Dan has a history of success with single issues and having been successful the Common Front was looking for a new iniative.
Dan felt that SIPA initiatives were interesting and invited us to meet with members of the Common Front in Collingwood to discuss initiatives.

The meeting proved conclusive and it was agreed that the Common Front would take on a new initiative Retiremnet Security. This iniative comprises many of the issues that SIPA has been pursuing and so we are pleased to participate with the Common Front.

Dan is a man with energy and imagination and a background of success in achieving goals. His work with the front has made him familiar to Government and will will ably lead this group on this new venture.

A press release gained attention across the country and you will hear much more in future as additional organizations join the Common Front. There are now 18 organizations represneting millions of voters so we expect politicians will begin to pay heed.

For additional up-to-date information visit the CFRS website at www.RetirementSecurity.ca

[admin]

see a lawyer if you feel you have been misled, misinformed, or abused financially. Even if you feel foolish or feel like you have just been duped by a fast talking salesman, I suggest you inquire or more than one lawyer.
They will better understand the "duty of care" required of a professional. You will not be thinking as clearly or as objectively as they will. Sit down and tell them what happened to you, as you understand it. They will likely charge you nothing for an initial visit. What have you got to lose but some pride?

If you decide to go through the "proper" regulatory channels, that also may have to be done, but understand that the industry, the self regulators, and the regulators all come from the same pool. They swim together, work together, and circulate freely. Many experts have suggested (as I do) that the regulators are suffering from something called "regulatory capture". I wont go into detail, but suffice it to say in my opinion, none will be on your side. Their job security takes priority over your situation.

[admin]

Here is what to do if you would like to ensure that your investment account is not used as a dumping ground for ill conceived or poorly constructed, high commission investment products.

Write a letter to your investment firm, and state that you are assuming they will act in YOUR interests, and not in the interests of the firm and the salesman. Tell them you are RELYING on the advertising promise of YOU FIRST or TRUST US or any of the many forms of advertising that the industry uses to gain clients.

Tell them another three or four things which tend to be used in court to determine if they owe you a duty of care:

Tell them you trust them to act professionally and in your interests.
Tell them you are vulnerable to the different levels of knowledge they posess verses yourself on matters such as fees, returns, risks.
Tell them you trust that they will honor and follow BEST practices in matters of codes of ethics, mission statements, and professional rules and regulations.

Above all tell them you are NOT looking for a salesman, or a relationship of buyer beware. You may not grant them discretion (total authority) over your account, but that aside from this one aspect, the other four tests of duty are involved, and you expect them to act in your interests, not firstly theirs.

Sadly, if you fail to clarify these expectations, you may be in a position of many seniors, who after being taken advantage of by salespersons posing as advisors, faced a legal defense that depends on the above to tell the client that "they did not owe you a duty of care". (contrary to what the advertising and codes say)

If you fail to get a satisfactory response, a response where the firm seems to understand, agree and admit that they owe you (the customer) a duty of professional care, then you must ask yourself the questions. The questions are: How is this response different from the promises that their advertising contains? Does it coincide or contradict?
If the advertising promise differs from the duty of care response, then you may be dealing with a firm whose words do not match their deeds. Buyer beware if that is the case.

for further info on what the industry claims when push comes to shove see case law such as:
Cosgrove V RBC
Hunt V TD Waterhouse
cases found at www.investorvoice.ca

[admin]

One national securities regulator for Canada.

Not thirteen in an economy the size of Texas.

Not thirteen for investment issuers to have to strugle through.

Not thirteen where the chairman of each is paid in some cases over $600,000 per year.

Not thirteen, who combined cannot even find a manner of causing restitution to agrieved or abused investors.

One. Uno.

Not founded by industry.

Not funded by industry.

Not fathered by industry.

Not feathered by industry.

Not fettered by industry. (is fettered even a word?)

[admin]

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