Self Regulation is "decriminalization", lets count the ways

Index of forum topics, talk to us.

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Mon Jul 06, 2020 5:37 pm

200625055642-wirecard-germany-0624-large-169.jpg (11.96 KiB) Viewed 1169 times ... -oversight

Wirecard Exposes Gaping Holes in Germany’s Financial Oversight
By Nicholas Comfort and Birgit Jennen
June 29, 2020, 5:50 AM EDT
Updated on June 29, 2020, 6:36 AM EDT
Germany splits accounting enforcement between several entities
BaFin’s role to expand as private-sector watchdog pushed aside
Wirecard AG’s collapse has laid bare significant cracks in Germany’s financial oversight, increasing pressure on Chancellor Angela Merkel’s government after one of the country’s biggest corporate failures.

Even with ample warning, German authorities failed to catch accounting issues at the digital-payments company. Slow decision-making, insufficient oversight and fragmented responsibilities created cracks that allowed Wirecard’s problems go undetected by officials.

Germany is one of relatively few countries to split accounting enforcement between a private-sector watchdog and its markets regulator, while the investigation of money laundering at non-financial companies is handled by regional authorities. With the fallout risking the country’s reputation as a place to do business, the government is now pushing for reform.

The financial regulator, known as BaFin, has come under fire for being slow to respond to allegations and temporarily banning short selling of Wirecard stock last year, an unprecedented step that appeared to back Wirecard. But the inefficient delegation of supervision duties helps explain why it failed to dig up problems at the company.

Wirecard Vows to Continue With Activities Amid Insolvency Steps
Wirecard’s Creditors Prepare for Battle Over Missing Billions
Wirecard Scandal a ‘Complete Disaster,’ Says Germany’s Bafin
How German Fintech Darling Wirecard Fell From Grace: QuickTake
The government will cancel its contract with the accounting watchdog, called FREP, a spokesman for the Justice Ministry said on Monday. The contract is set to run another 18 months, according to Bild am Sonntag.

The contract cancellation is the first step toward a new financial supervision concept, Kristina Wogatzki, a Finance Ministry spokeswoman, said Monday at a regulator press conference.

To consolidate financial enforcement, BaFin will be given the power to start investigations into company accounts, the Financial Timesreported on Sunday.

“Self-regulation by the auditors doesn’t work properly,” Deputy Finance Minister Joerg Kukies told the FT. The ministry “will inevitably have to question whether the bodies that currently regulate the industry should continue to do so in their current form,” he said.

No Feedback

BaFin received documents alleging irregularities at Wirecard in January 2019, yet it took more than a year to ask prosecutors to follow up on suspicions of market manipulation.

The regulator asked FREP in February 2019 to investigate, and since made multiple follow-up requests but hadn’t received a report on Wirecard’s accounting, said a spokeswoman for the regulator.

FREP assigned just one person to probe Wirecard, according to Frankfurter Allgemeine Sonntagszeitung. The organization didn’t immediately respond to a request for comment.

In the meantime, KPMG’s special audit, published in April this year, couldn’t verify much of Wirecard’s historic revenue and profits.

Once lauded as one of Germany’s fintech stars, Wirecard filed for insolvency last week after saying that 1.9 billion euros ($2.1 billion) previously reported as cash on its balance sheet probably doesn’t exist.

With traditional lenders Deutsche Bank AGand Commerzbank AG struggling with their own problems, the scandal has raised questions over how to rescue Germany’s role in modern finance after Wirecard’s demise.

“It is very important to us that the business is saved and a German company can continue to run it,” said Andreas Laemmel, the lead lawmaker for economic affairs in Merkel’s Christian Democratic causcus, told Bloomberg. “But Wirecard’s name cannot persist, it’s burned.”

— With assistance by Arne Delfs
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Tue Apr 25, 2017 6:49 pm ... ted-bodies

Screen Shot 2017-04-25 at 7.47.28 PM.png

Labour productivity among Canadian professionals is in the bottom fifth among all sectors

A cautionary tale for Canada is unfolding in a U.S. Supreme Court case that pits a David (small businesses that provide teeth whitening) against a Goliath (professional dentists) who wants them to stop. Could a similar case arise in Canada that involves shutting the door on competition? Yes, unless the provinces enact rules to ensure professional bodies don’t push the limits of their power to prevent or lessen competition in their lines of business.

The U.S. Supreme Court case may dramatically alter the landscape for professionals in that country. Enter the North Carolina State Board of Dental Examiners, who has initiated a legal fight over the fact that more people are whitening their teeth at spas and kiosks using cosmetic products instead of going to dentists who charge considerably more for their services. The Board began sending cease-and-desist letters to cosmetologists. Cosmetologists responded by complaining to the Federal Trade Commission, which commenced anti-trust action against the Board. The Board bases its authority to restrict cosmetologist’s teeth whitening on a 1943 Supreme Court decision that provides it with certain immunity from antitrust prosecutions.

In Canada, we have plenty of potential Goliaths. There are hundreds of self-regulated bodies that derive their authority to restrict economic activity within their space, mostly from provincial governments. Such bodies have immunity from competition laws, just as North Carolina’s dentists believe they have immunity under case law dealing with competition and regulation. Immunity from competition law allows them to act as de facto monopolies, in the case of the Dental Examiners claiming the exclusive right to practice a cosmetic procedure that most would consider ancillary or only tangential to the core expertise involved in provision of dental services.

Many professions are well-recognized fields, which include designations such as chartered accounting, law, medicine, etc. The number of self-regulating organizations is growing. The Ontario government, for example, has delegated administrative or quasi-judicial functions to more than 80 bodies, and plans to do more delegation through the Delegated Administrative Authorities Act. These groups have the power to devise and enforce the rules governing a professional’s relationship with her clients.

The capacity to self-regulate is a highly sought after power among occupations aspiring towards the status of professionalism. The mere fact of self-regulation enhances the credibility and standing of an occupation and its members in the eyes of consumers. Rulemaking or rule-enforcing powers grant autonomy and self-determination to professionals.

But problems can arise from self-regulation. Self-regulatory rules can grant economic power to such groups beyond the ability to certify, discipline or maintain the competence of their members. The case from North Carolina illustrates the ever-present problem with rent-seeking by a professional organization and the zealous desire by professional associations to protect their rents by relying on self-regulatory powers.

When self-regulating bodies have rulemaking or discretionary powers over professionals, they can often take steps that do not help consumers or, at worst, are directly contrary to their interests. The result can be undue limits on innovation, restrictions on competition or entry, and accumulation of economic power in the hands of small, politically established groups of professionals.

What’s the economic result? A recent study by the Competition Bureau found that labour productivity among Canadian professionals is in the bottom fifth of labour productivity among all sectors in the economy.

We expect that professional bodies make decisions that enhance economic outcomes for all Canadians. There is a certain social and political responsibility that comes with the status of professional, in many cases a fiduciary obligation. Many Canadian governments are only giving token consideration to consumers when enacting legislation that delegates rulemaking or rule-enforcing authority, to an increasing number of occupations.

When we stop to examine the incentives at play, Canadians should be asking if delegation and self-regulation are the most consumer-friendly options. Should professionals of all stripes be granted more autonomy?

Consumers and small businesses should be paying attention to this issue as it has a direct impact on affordability of many services purchased by them, including things as diverse as hairstyling and real estate (the former will see more heated enforcement against unlicensed hairstylists with dubious rationales for public protection).

Provincial governments should take stronger steps to ensure that self-regulating organizations are using their rights and privileges to promote the public interest and not to restrict competition or limit innovation in the service sector. These steps include consultation with the Competition Bureau and other consumer protection organizations on the delegation of statutory powers and the possible effects that such delegation can have on competition. Provinces should ensure that any regulations created or enforced by self-regulating organizations are minimally restrictive to competition.

If the public is to have continued faith in professionals and professionalism, provincial governments should ensure that the rules governing self-regulating professionals do not put the interests of industry insiders ahead of consumers.

Robert Mysicka is the author of a recent C.D. Howe Institute Commentary “Who Watches the Watchmen? The Role of the Self-Regulator.”
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri May 22, 2015 4:20 pm

A "best-practices" expert in the US, gives perhaps the best explanation I have seen on my view that "self-regulation is de-criminalization".

In the article from march 2013, Mark D. Mensack, investment industry expert with a proven track record of standing tall for protection of the public interest, explains in simple 2000 year old terms how self regulators operate.

It is my view that the current lobbying by ADVOCIS chair Pollock, resembles this quest:
(full article found here )


Excerpt: Insulation from Risk and Plato’s Ring of Gyges

While these mortgage companies were able to transfer the risk off their books shortly after a mortgage was sold, there is a second, more disturbing aspect to this moral hazard that Plato described in the Republic.

Gyges was a shepherd for the king of the land. One day, there was an earthquake while Gyges was out in the fields, and he noticed that a cave had opened up on the side of a mountain. When he went to investigate, he discovered the tomb of an ancient King, and on the finger of the corpse was a gold ring. He took the ring and soon discovered that it allowed the wearer to become invisible. Gyges realized that if he was invisible, he could do whatever he desired with no fear of punishment. The next time he went to the palace to give the king a report about his sheep, he put the ring on, killed the king, seduced the queen, and ruled the land.

In every philosophy course I teach, I survey my students on the following question, if you actually received that ring today and knew you were insulated from the risk of punishment for your actions, what would you do today that you would not have done yesterday when there was risk of punishment? An honorable person would probably think to themselves that they would do nothing different because they do the right thing, because it is the right thing to do. Unfortunately, Plato feared that most people would only do the right thing because they feared punishment.

Given the absence of criminal prosecution of Wall Street executives,
it’s not a stretch to realize that the SEC and FINRA have given Wall Street, or at least the big players on Wall Street, the Ring of Gyges.
SEC and FINRA critic Larry Doyle makes this argument often, albeit without mentioning the Ring of Gyges, in his Sense on Cents blog. He notes that
prosecutions of financial frauds are at a 20 year low and also argues that this free pass is “the cause of so much underlying rage and anxiety in our country.”

In a blog entitled “Preet Bharara On Too Big to Prosecute” I think Doyle captures how this moral hazard has damaged America’s trust when he writes,
“I firmly believe that the overwhelming majority of people in our nation embrace the principle of fair play and understand when that principle has been violated. In the process of that violation, people want justice to be served.”

The Ring of Gyges is Real

My argument that the SEC and FINRA have given Wall Street the Ring of Gyges might merely be an analogy; however, the Supreme Court of the United States giving FINRA the Ring is fact.
Most Americans don’t realize that FINRA is a private corporation, not a government agency. FINRA has governmental powers, but it is not subject to the Administrative Procedures Act and can deny American citizens their constitutional right to due process.
In Standard Investment Chartered, Inc. v. FINRA the Supreme Court ruled that FINRA is immune from prosecution! 10
So long as any organization in America stands above the Constitution, particularly one who’s “chief role is to protect investors by maintaining the fairness of the US capital markets is supposed to the foundation of the capital markets” the Ring of Gyges will exist in America.11

(InvestorAdvocate comment: My view is that the proposals sought by ADVOCIS lobbying, is to give themselves the "Ring of Gyges", the cloak of invisibility, of invincibility and of immunity from being accountable for their actions. This is triply important to reject since their up front proposals seeks to form a self regulatory body with full authority over regulation of "advisors", whilst at the same time strongly opposing the best advisory client protection practices in the land.

In my view that is clearly a simple quest to claim the Ring of Gyges, for themselves, and not for any benefit to the public. Let legislators beware of those who seek power and authority over Canadians money, without bringing even an "A" game of good practices…..)

Screen Shot 2015-05-22 at 5.25.04 PM.png

Source of the full article titled THE MORAL HAZARD OF UNINFORMED CONSENT
Mark D. Mensack, AIFA®, GFS®
Independent Fiduciary Consultant

CEFEX Analyst

A Fiduciary Plan Governance, LLC affiliate

What does a Prudent Champion do? See Your Money: A One-man Army
856 HIT 401K (856-448-4015)
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Feb 13, 2015 10:02 am



This insightful comment about an IIROC settlement agreement was forwarded to me, and I felt it worth sharing with others. The writer understands well, the role of self regulators as protectors and apologists for industry abusive acts. With Canadian investment regulators, it is like we have given the Hells Angels the privilege of "self" regulation over their most valuable criminal acts….

Dear Ken:

After a 33 month investigation by IIROC that started in May of 2012, a settlement agreement was reached between Donald “Earl” Phillips and IIROC.

Although according to all industry regulations and securities legislation, Wellington West Capital is ultimately responsible for ensuring that a suitability assessment is performed prior to approving the opening of any new account and for properly supervising Earl Phillips, to date, they have NOT been investigated concerning this matter.

IIROC stated that Earl failed to use due diligence to learn and remain informed of the essential facts relative to 11 of his clients and that he made unsuitable recommendations to these 11 clients. However, according to IIROC Rules concerning Know Your Client and Suitability, it is ultimately the responsibility and obligation for the Dealer Member (WWC) to perform a suitability assessment prior to approving any new account. More importantly, this matter involved upwards of 100 clients and not 11, and IIROC knew this.

The IIROC statement “the Respondent earned approximately $6,450.00 commissions from the accounts of the 11 clients. This represents 30% of the related commissions compared to KM who received 70%.” This statement is incredibly misleading for a couple of reasons.
· Wellington West Capital kept the 1st 50% of the commissions paid and the balance typically went to the salespersons to split. As explained to me this is the arrangement that was set up between Wellington West Capital and Wellington West Financial;
· There were other factors involved for which Phillips likely received 100% credit. i.e. Credits for office space, credits towards grid levels, secretarial assistance, marketing allowances, life insurance and disability benefits, etc. Typical for the industry.
Clearly 50% of the commissions went to WWC and IIROC is letting them keep it.

This investigation by IIROC and the results are a complete farce! OSC overseers know this. IIROC purporting to “Protect Investors” is a complete sham and this investigation and settlement agreement is the proof! I’m sure the Management Team at National Bank (certainly in Winnipeg) has all of their “Investment Advisors” in the boardroom this week to review this decision and letting them know that it’s open season on senior investors. And the advisors who bag the most senior citizens will get to go on the company’s President’s Counsel trip to an exotic destination and might even win an award like a Mr. Grant White did as Rookie of the Year in 2013.

So how exactly does IIROC “Protect Investors and Foster Fair, Efficient and Competitive Capital Markets across Canada”? What possible deterrent is there to prevent this type of action on the part of National Bank (formerly Wellington West Capital)?

And now, National Bank’s Investment Advisors in Winnipeg (and likely right across Canada) abuse vulnerable senior ( hundreds if not thousands of others) by placing their investments 1st into proprietary National Bank products and then move them into fee based programs where they can charge fees of up to 200% more for no recognizable or discernible economic benefit to these investors. Although extremely detailed and irrefutable evidence has been provided by victims to IIROC, some provincial securities commissions, OBSI and the CSA, absolutely no investigation of the evidence presented has been acted upon.

This is precisely why Canada needs a National Securities Regulator! Otherwise, investors do not stand a chance in the current system against unscrupulous companies and Registered Representatives who decide to take advantage of investors due to the knowledge asymmetries that exist knowing the current patchwork Investor Protection system is designed to put investors through a maze where they are bounced from the Company, to IIROC, to their Provincial Securities Commission, to OBSI over a period of months and years only to have all these regulators do nothing to protect them and in many instances put the blame back on them for signing documents without reading them or for not checking their statements more carefully.

Are investors rights better protected by a financial planner who refers their investment management to an Investment Counsel firm where their money is managed by Portfolio Managers who have attained the CFA designation who have a fiduciary duty to act in their best interests or by “Investment Advisors” registered with the provincial securities commissions who have passed the Canadian Securities Course are only held to a “suitability” standard? It’s time for fundamental reform


============ ... -1.2953972

IIROC settlement agreement:

Wealth Professional article ... 88123.aspx
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Tue Feb 10, 2015 11:10 pm

In Canada, there are literally thousands of lawyers and industry mouthpieces, paid millions and millions of dollars to ensure that deception and fraud crimes of your "trusted" investment dealer and salespersons will never see a policeman or a prosecutor. Self regulation is mafia-like decriminalization…… ... ment-37661

Here is a great article from a US expert who describes how it works…..something you will never see written in any Canadian media.

Screen Shot 2015-02-10 at 11.09.28 PM.png

The mafia would love this arrangement. It gets to rob you and if it is caught your only recourse is a court that is controlled by the mafia. This sounds far-fetched, but this is the way Wall Street operates. It can sell you toxic mortgages and IF it is caught your only recourse is an arbitration process that is controlled by FINRA. In case you don’t know this, FINRA is funded by Wall Street and it is what is called an SRO (Self-Regulatory Organization). That’s right Wall Street regulates itself. The SEC goes along with it because Wall Street special interests control the politicians who control the SEC. Like I said, the mafia would love this arrangement. There is no downside, except fines, if they are caught. And, the payment of fines is a cost of doing business. See The Street’s Due-Process Joke by Jim Tague.

How do they get away with it? The service agreements that you sign limit your recourse to an arbitration process that is controlled by FINRA that is controlled by Wall Street. Does this sound like a stacked deck? You bet it is and there is nothing you can do about it except not buy from their salesmen.

The bigger question is why do you let Wall Street get away with it? One simple answer is you need what they are selling – investment expertise, advice, and services. This is what you see on TV, but this is not what you get. 75% of all the financial experts who sell their products are salesmen who tell you they are experts to facilitate the sale of high and low quality investment products.

I think there is a second more basic reason. Wall Street figured out a long time ago that money is a relationship business. You tend to follow the advice of people you like because you trust people you like. You have trouble believing people you like will rip you off to make more money. Consequently, a top requirement when they recruits salesmen is a friendly personality that masks the real intent of the advisor – maximize revenue from your assets.

Why is a nice advisor such a big risk? If you are like 80% of investors you do not even read the service agreement (contract) that contains the arbitration restriction. You trust your nice, friendly financial advisor who says he will always do what is best for you. Based on assumed trustworthiness there is no reason to read an agreement that is loaded with legal and investment jargon

You better select a real financial expert you can trust. Your recourse is limited if you select the wrong advisor. And, this is just the way Wall Street wants it.

Tell Us What You Think!

Tags: financial advisor, Financial experts, investment, investors, Wall Street Jack Waymire, PaladinRegistry, Paladin Registry

About the Author

Jack Waymire worked in the financial services industry for 28 years. For 21 years he was the president and chief investment officer of a registered investment advisory firm with more than 50,000 clients. He left the industry in 2003 when his book (Who's Watching Your Money?) was published by John Wiley. That same year he launched an investor information website ( that was based on the principles in his book. Jack is a columnist for Worth magazine, a frequent blogger on major financial sites, and widely quoted in the media including the Wall Street Journal, Forbes, BusinessWeek, Bloomberg, and Kiplinger.
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Sat Oct 04, 2014 5:22 pm

Screen Shot 2014-10-04 at 6.21.02 PM.png

Industry paid sycophant version (official party line):

"The fee-for-advice pay structure common in the United States offers less transparency to investors than the Canadian embedded-fee model for mutual funds, according to research carried out by Investor Economics and Strategic Insight for the Investment Funds Institute of Canada (IFIC)."

English fair and honest translation:

"We will look you in the eyes and sincerely suggest that someone who charges a set fee, known in advance, is "less transparent" than our friends who prefer to embed (hide:) their costs and keep secret their incentive schemes".

(a simply amazing example of obfuscation and industry ability to lie and mislead the public for the right money or other selfish, less than professional loyalties) IFIC sure makes it obvious………(Investment Funds Institute of Canada, lobby group) Article found at link below: ... fic-110018

The fee-for-advice pay structure common in the United States offers less transparency to investors than the Canadian embedded-fee model for mutual funds, according to research carried out by Investor Economics and Strategic Insight for the Investment Funds Institute of Canada (IFIC).

The report suggests:

The landscapes in both Canada and the U.S. have shifted from having fund investors pay for their financial advisor’s services at the time of purchase, to paying over the duration of the investment. However, in Canada, advisor fees are embedded within funds’ expense ratios, while in the U.S., compensation to financial advisors has moved to a fee-for-advice model with fees charged to fund investors separately and in addition to disclosed fund expenses;

Neither U.S. nor Canadian regulators require fees-for-service to be disclosed explicitly, with the result that fees for advice charged outside the fund’s expense ratio are seldom captured in analyses of investors’ total costs;
The U.S. fee-for-advice model offers less transparency of fund investors’ total costs than the Canadian model. Canadian fund fees, with embedded dealer/advisor fees, are disclosed and are easily compared across funds. In the U.S., it is up to each advisor-assisted investor to estimate his/her total cost of fund ownership, and no benchmarking of total costs is available across wealth managers;
When all of the costs are factored in, the cost of ownership of funds in advised relationships in Canada is at a comparable level to the average cost of ownership incurred by a typical advised relationship in the U.S.
On a tax-adjusted basis (no HST in the U.S.) the asset-weighted cost of ownership in Canadian advice channels is estimated to be 2.02% of invested assets compared to the level of approximately 2% in the U.S.; and
There is no evidence that unbundling of fees in the U.S. (separate fees for investment management and advice) has resulted in lower costs to U.S. investors; rather, for many advisor-assisted U.S. investors, total costs over the life of the ownership of the investments may have increased.
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Thu Sep 25, 2014 4:11 pm ... 9592282508



Screen Shot 2014-09-25 at 5.09.15 PM.png

Dealer Member Rules
Rule 42 — Conflicts of Interest
×RuleØ ×42Ø — Conflicts of Interest




×42Ø.1. Responsibility to identify conflicts of interest

(1) Each Dealer Member and, where applicable, Approved Person shall take reasonable steps to identify existing and potential material conflicts of interest between the interests of the Dealer Member or Approved Person and the interests of the client.

(2) Where an Approved Person becomes aware of an existing or potential material conflict of interest, the existing or potential conflict shall be reported immediately to the Dealer Member.


×42Ø.2. Approved Person responsibility to address conflicts of interest

(1) The Approved Person must consider the implications of any existing or potential material conflicts of interest between the Approved Person and the client.

(2) The Approved Person must address all existing or potential material conflicts of interest between the Approved Person and the client in a fair, equitable and transparent manner, and consistent with the best interests of the client or clients.

(3) Any existing or potential material conflict of interest between the Approved Person and the client that cannot be addressed in a fair, equitable and transparent manner, and consistent with the best interests of the client or clients, must be avoided.


×42Ø.3. Dealer Member responsibility to address conflicts of interest

(1) The Dealer Member must consider the implications of any existing or potential material conflicts of interest between the Dealer Member and the client.

(2) The Dealer Member must address the existing or potential material conflict of interest in a fair, equitable and transparent manner, and considering the best interests of the client or clients.

(3) Any existing or potential material conflict of interest between the Dealer Member and the client that cannot be addressed in a fair, equitable and transparent manner, and considering the best interests of the client or clients, must be avoided.

(4) The Dealer Member must adequately supervise how existing or potential material conflicts of interest between the Approved Person and the client are addressed by its Approved Persons pursuant to section ×42Ø.2.


×42Ø.4. Responsibility to disclose conflicts of interest

(1) Unless avoided, an existing or potential material conflict of interest must be disclosed to the client in all cases where a reasonable client would expect to be informed:

(a) for new clients, prior to opening an account for the client; and

(b) for existing clients, either as the conflict of interest occurs or, in the case of a transaction related conflict of interest, prior to entering into the transaction with the client.


×42Ø.5. Conflicts of interest policies and procedures

(1) Each Dealer Member shall develop and maintain written policies and procedures to be followed in identifying, avoiding, disclosing and addressing material conflict of interest situations.
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Mon Aug 11, 2014 8:28 am

Further to violation #48ish "call yourself anything you want", even if it misleads or misrepresents (or hides) your motivations to the customer.......

Screen shot 2012-02-24 at 5.34.46 PM.png
click once to enlarge, twice to zoom in

IIROC "self" regulation turns a blind eye to misrepresentation of 150,000 persons who are licensed and registered in a category legally titled "dealing representative" (formerly called "salesperson" until Sept 2009)…….and who wish to avoid the label of salesperson and instead use a title of "advisor".

(adviser is a regulated title, and is both clear and unclear whether they are two spelling versions of the same thing (which would be misrepresentation) or two totally different titles. (either way IIROC lets members who do not have the registration and HAVE another registration use whichever title they prefer for marketing and trust building. (Fair, honest, good faith?)


From IIROC Rules Notice Guidance Note Dealer Member Rules
Use of Business Titles and Financial Designations

Joe Yassi
Vice President, Business Conduct Compliance 416-943-6903
Use of Business Titles and Financial Designations
Internal Audit Legal and Compliance Operations Registration Research Retail Senior Management Training
14-0073 March 24, 2014

No IIROC Approved Person should hold his or herself out to the public in any manner, including without limitation, by the use of a business title or designation of qualifications or professional experience that deceives or misleads, or could reasonably be expected to deceive or mislead, a client or any other person as to the IIROC approval they hold, their proficiency or qualifications. (fair, honest, good faith)

1 “Registered Representative” refers to the name of an individual IIROC approval category. An individual approved by IIROC to act as a Registered Representative is permitted to trade and provide advice to retail customers with respect to securities.
2 “Investment Representative” refers to the name of an individual IIROC approval category. An individual approved by IIROC to act as an Investment Representative is permitted to trade in securities for retail customers. An Investment Representative is not permitted, however, to provide investment advice.
3 The term “financial designation” is used generically throughout this notice to include credentials that are used to indicate that the individual has specialized knowledge or expertise in an area gained through education and/or experience. ... b67_en.pdf
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Thu Jun 13, 2013 10:42 am

Just one more example of the phoney "we are a regulator and we can help" run-around handed to seniors or any investor who wishes to infiltrate the system enough to get their complaint handled fairly.

One of dozens in the circle jerk of pretend investor help. Acting as industry damage control and abuse concealment instead.

email from a senior:

Dear Ms Morris, could please let us know if OBSI has jurisdiction with regard to handling complaints about the conduct of the TD-CT Bank Ombudsman. Originally we were referred to OBSI by the TD-CT Bank Ombudsman.

Apparently the TD-CT Bank Ombudsman is not under the jurisdiction of IIROC. As a division of the TD Bank Financial Group, which is a federally regulated financial institution, we are told that the TD-CT Bank Ombudsman is under the jurisdiction of the Federal Consumer Agency of Canada.

Thank you

Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Dec 21, 2012 3:53 pm

Screen Shot 2012-12-21 at 3.49.25 PM.png ... &tocID=559

800.13. No transaction with a client which involves an agreement to purchase or repurchase a security, an agreement to sell or resell a security or the granting of a put, call or similar option involving a security shall be entered into unless all terms relevant to the transaction are stated in writing on the face of the contract.  (If necessary, part of such terms may be set forth on an additional page attached to the contract provided that they are referred to on the face of the contract.)

(Comment. I have never seen a DSC (Deferred Sales Charge) mutual fund sold in which the provisions of this rule are met.)

DSC funds were the easiest method of letting salespeople "fool" customers into the belief that this investment would "not cost them a thing". Between those salespersons who used this sales method (obfuscation and lying by omission) and the "simplified prospectus" which clients generally do not read (why would they, if they have an "advisor" to do this for them???) it was the best trick invented to gain at the expense of the customer.

Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Mon Oct 22, 2012 9:43 pm

Screen Shot 2012-10-22 at 10.42.47 PM.png

This is incredible for a professional Association but actually believable based on my interactions with them

For example according to their financial statement they spent on $990,283 on Marketing and $ 27,715 on Enforcement

Screen Shot 2012-10-22 at 10.45.11 PM.png


see FPSC ANNUAL REPORT 2010-2011 page 17 ... port_0.pdf

THANKS to Ken K for this heads up to the public.
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Tue Jun 12, 2012 9:14 pm

Screen shot 2012-06-12 at 10.08.04 PM.png
click to enlarge
Screen shot 2012-06-12 at 10.08.17 PM.png
"COMMISSIONS" involved in up to 85% of the activities of CFP "professionals". I wonder who gave them the title "professionals"? Themselves?
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Tue Jun 12, 2012 8:56 am

Screen shot 2012-06-12 at 9.45.52 AM.png

Wow, these guys are good.........with over 17,000 CFP's in Canada, they only have one disciplinary action a year. ... 2011_0.pdf ... s_2010.pdf ... 2009_0.pdf

A stellar record to say the least.

My concern is that mutual fund sales records (mutual funds are the largest product group sold by CFP's) show that over the years, "four out of five" salespeople will place their customers into the highest commission paying product choice, even when a lower cost, identical product would serve the client's investment performance better. I have to wonder why there are no CFP disciplinary hearings to address this abuse of customer's financial interests?

See “Pink Slime” investment sales techniques? Nine broker tricks you should know. An article and video about tricks played on customers at
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Tue Mar 06, 2012 10:39 pm

violation #48ish "call yourself anything you want", even if it misleads or misrepresents (or hides) your motivations to the customer.......

Screen shot 2012-03-06 at 10.30.31 PM.png ... ns-ethical

"It's Regulated, Right?" Research Reveals Canadians in the Dark Regarding Qualifications, Ethical Obligations of Financial Planners and Advisors
FPSC Calls on Canadians to Hire Smart with Better "Hiring Literacy"

February 21, 2012, Toronto, ON — Financial Planning Standards Council (FPSC®) is urging Canadians to improve their 'hiring literacy' when engaging financial planners. This is a time when Canadians could greatly benefit from competent and ethical advice and guidance for their financial affairs.

Unfortunately, many Canadians operate on blind trust when choosing whom to engage for this assistance. According to new research conducted by The Strategic Counsel on behalf of FPSC, far too many Canadians are misinformed about the required qualifications and ethical obligations of their planners. For instance, an overwhelming majority (70%) of survey respondents falsely believe that individuals must be licensed in order to call themselves a financial planner.

As part of its campaign to encourage Canadians to hire smart, FPSC (the standards setting and enforcement body that oversees CFP® certification) is sharing this research to debunk some of the myths Canadians hold regarding financial advice.

"With the exception of Quebec, anyone in any province can call themselves a financial planner without meeting any minimum qualifications or standards," says Cary List, President & CEO, FPSC.

"We strongly encourage Canadians to seek advice for their financial planning needs, but also to make sure they hire smart. Poor 'hiring literacy' can put Canadians at risk of engaging individuals who may not be appropriately qualified to meet their needs; individuals who may deliberately or inadvertently misrepresent their qualifications as well as their ethical and professional commitments" adds List.

MYTH: "All financial advisors are accountable to an oversight body which ensures they provide ethical and competent service to their clients." More than half (54%) of respondents falsely believe this statement to be true. Nearly one third (29%) are 'not sure' and fewer than 1 in 5 (17%) respondents disagreed with this statement.

FACT: Financial advice is largely unregulated in Canada. To sell products, advisors must have appropriate licenses; however, when it comes to financial planning advice, there is no government enforced standard or mandatory professional oversight for competent, ethical and professional behavior. Current regulation is piece-meal and is product based (i.e. stocks, mutual funds, insurance). Only individuals who have voluntarily stepped up to earn a professional credential such as the CFP designation are held accountable to a professional oversight body with standards for ethical and competent financial planning advice and service.

MYTH: "Individuals must be licensed to call themselves financial planners. There are strict regulations in all provinces regarding who can refer to themselves as financial planners". 70% believe individuals must be licensed to call themselves "financial planner". And 42% of Canadians believe there are strict regulations in all provinces regarding who can refer to themselves as financial planners.

FACT: With the exception of Quebec, anyone in Canada can call themselves a financial planner without meeting any requirements for competence or ethics. Credentials that ensure high standards for competence and ethical behavior such as the CFP designation are strictly voluntary.

Individuals who earn the CFP credential must meet rigorous standards of professional responsibilityand demonstrate competence through rigorous standardized national examinations before earning the CFP credential. After earning the designation, CFP professionals must commit to continuing education, professional standards of ethics and competent performance and are held accountable to FPSC's professional oversight.

HIRE SMART: "Canadians put themselves in the driver's seat when they hire smart. There are many professionals who offer highly competent and ethical service, always putting their clients first. But in absence of common national standards that require all financial planners to meet professional qualifications and be accountable to oversight, Canadians must protect themselves by ensuring they're hiring appropriate qualified and credentialed professionals. It's critical they ask the right questions of their potential planner, and know what the red flags are," says List.

In encouraging Canadians to learn more about what to look for in a financial planner and what to expect from a professional, ethical engagement, FPSC offers the 10 Tips for Choosing a Planner,Questions to Ask A Planner and other resources at Additionally, the Standards of Professional Responsibility provides a guide for consumers of what to expect from a CFP professional.

*ABOUT THE RESEARCH: The Strategic Counsel conducted a survey among an online panel of English Canadians (outside Quebec) over the age of 18 who have used some financial planning services offered by financial advisors, and those who have not used financial planning services from financial advisors. The survey was conducted between September 11th, 2011 and September 30th 2011. This panel has been established to measure the value of financial planning over a five-year period. These survey results are based on the responses of 1,079 respondents.

FPSC Executives Available to Discuss:
In absence of regulation, how can Canadians equip themselves with the know-how and 'hiring' literacy when engaging planners? What should they look for, ask about, check into?
What are some of the professional and ethical obligations expected of a CFP professional?

About Financial Planning Standards Council
Financial Planning Standards Council (FPSC®) is a not-for-profit organization which develops, promotes and enforces professional standards in financial planning through CERTIFIED FINANCIAL PLANNER® certification, and raises Canadians' awareness of the importance of financial planning. FPSC's vision is to see Canadians improve their lives by engaging in financial planning. Currently, there are more than 17,500 CFP professionals in Canada and more than 140,000 CFP certificants in 24 countries worldwide. See for more information.


For more information and to arrange interviews please contact:

Eileen Chadnick
Chadnick Communications (for FPSC)
416.631.7437 or

Heather Mills
416.593.8587 x 235 or
CFP®, CERTIFIED FINANCIAL PLANNER® and CFP (with flame logo)® are trademarks owned outside the U.S. by Financial Planning Standards Board Ltd. Financial Planning Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB. FPSC, FPSC and logo and Financial Planning Standards Council are trademarks of Financial Planning Standards Council

(advocate comment: The CFA designation is the strongest indicator you have found an investment professional,especially if they will show you their exact duty of care to you, or fiduciary duty.......while the CFP is the most common designation among commission sellers of investment products, and it is a matter of some debate, and very much wiggle room, whether or not you are owed any duty of care at would be appropriate for the FPSC to clear this up and for the rest of the industry to come clean as well. See topic in this forum titles "solutions, self defence and best practices")
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Feb 24, 2012 9:45 pm

A client doing research (an abused client seeking redress) dug these rules up and I thought I would post them to make things easier for the next abused client.....or the next thousand ... EN-web.pdf

6.1 MFDA Requirements and Guidelines
Policies and Procedures
MFDA Rule 2.10- Policies and Procedures Manual MFDA Market Regulation Notice MR-0008 –Policies and Procedures Manual MFDA Bulletin #0395-C – Policies and Procedures Manual Reference Guide
MFDA Rule 2.2.1 – Know-Your-Client MFDA Policy 2 – Minimum Standards for Account Supervision MFDA Market Regulation Notice – Know-Your-Product
Supervision of Accounts
MFDA Policy 2 – Minimum Standards for Account Supervision MFDA Market Regulation Notice MR-0069 – Suitability Guidelines MFDA Bulletin #0431-C - Leverage Guide, Leverage Review Worksheet & Approved Person Leveraging Analysis Template
MFDA Rule 2.2-Client Accounts MFDA Market Regulation Notice MR-0069 – Suitability Guidelines
Leverage Disclosure
MFDA Rule 2.6 Borrowing for Securities Purchases MFDA Market Regulation Notice MR-0064 – Maintaining Evidence of Disclosure MFDA Market Regulation Notice MR-0070 – Misleading Communications Regarding Leverage MFDA Market Regulation Notice MR -0074 – Leverage Risk Disclosure

6.2 IIROC Requirements and Guidelines
Policies and Procedures
IIROC Rule 38.1
IIROC Rule 1300.1 IIROC Rule 1300.2 IIROC Rule 2900 Part I
Supervision of Accounts
IIROC Rule 1300 – Supervision of Accounts
Rule 1300.1(p) – Suitability Generally Rule 1300.1(q) – Suitability Determination Required When Recommendation Provided IIROC Guidance Note 09-0172- Sales Practice Obligations Relating to Leveraged and Inverse Exchange-Traded Funds
Leverage Disclosure
IIROC Rule 29.26(1)

They pertain to various requirements of behaviour for the industry. For abused investors, proof of violation of many of these rules is usually quite easy as this point in time, as the self regulated nature of the industry, and the "too big to prosecute" problem, has allowed them to operate as if these rules do not even exist in most cases. Self regulation has truly allowed a "free for all", almost a client abuse party, and early and serious litigants should have little problem showing a flagrant disregard for most of the industry rules. Why? This is Canada, nobody has ever challenged them before............
Site Admin
Posts: 3048
Joined: Fri May 06, 2005 9:05 am
Location: Canada


Return to Click here to view forums

Who is online

Users browsing this forum: No registered users and 2 guests