To unravel the perfect crime...

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Peddling Influence

What if the OSC is the provincial government equivalent of SNC....?

With news coming out of late that Ontario is going to set the stage for "new rules” (meaning lower standards:) for persons who give financial advice, I ran across this today, and thought I would share it:

Sent to me from an investment industry expert who is deeply concerned about the watering-down of public protections:

"Yes they are siblings!"
Victor Fedeli was born in North Bay on August 8, 1956. He is married to Patty (Kelly), another North Bay native. His mother Lena still lives in North Bay. His brother Peter, wife Elizabeth, and their daughter Maggie also make North Bay their home.His sister Teresa and her family live in Montreal. http://fedeli.com/meet-vic/extended-biography/

The Minister of Finance in Ontario has a brother who is a Financial Advisor with CIBC.
From a published online profile of Peter Fideli:
Peter Fedeli
Titles & Designations
Investment Advisor
Bachelor of Commerce
Master of Business Administration
Canadian Investment Manager

=======

The problem with this is that Peter Fedeli, who claims to be an Investment advisor with CIBC, is only registered in the category of a “Dealing Representative” which is the registration of a salesperson (a representative for CIBC) and not an “Advising Representative” (with a higher duty of care for investors)

click on image to zoom in, click on “back” button to go back

The key difference of course is that selling products is NOT giving impartial advice, and giving impartial advice is NOT selling products....and never the twain shall meet...however CIBC and Peter Fedeli would prefer to not inform investors of this particular aspect of the business.

Notwithstanding that it is not allowed under Ontario Securities Law, to misrepresent ones license or registration category (much less under principles of honesty and good faith)

click on image to zoom in, click on “back” button to go back

The problem is that these investment sales agents, legally registered as “Dealing representatives” (agents who represent the dealer) can take in more money from clients if they give clients the impression (mistakenly or otherwise) that clients are dealing with a trusted, regulated, (perhaps fiduciary quality) financial professional. Clients hope and expect that someone like this would treat them like a “Doctor” treats their patient's, and not like a commission sales agent.

Commission investment sales agents often hide their true credentials behind false titles since it makes more money for the banks...or rather it makes getting trust and money from the public easier, even if it a false representation, and even if it is against the law. This is just plain wrong and the word fraud comes to mind, but when was the last time you ever heard or saw of a bank being held to the law...in public.

Vic Fedeli is working very hard to change things so that people (like his brother) can further confuse the public, with new government proposals coming soon, on credentials so that people like his brother can have their cake and eat it too. They will soon announce that all persons formerly known as “dealing representatives” (which was the “salesperson” category until the word “Salesperson” was deleted in Sept 2009 by the CSA)...will be granted a new, professional sounding name/title, which will allow them to further confuse the public into giving their money and trust away to people who pretend to have a professional duty to protect the client...when nothing will be further from the truth.

This crony, self-dealing game of government minsters being handmaidens to financial corporations is getting more comedic every day.

https://www.youtube.com/watch?v=qH0UGSG2wX0

CBC Comedy writers cover the laughing-stock that foreshadow what we can expect more of...from Finance Minister Fedeli in 1 min 40 seconds. See how it looks today (before Mr. Fedeli enshrines the fraud into law...) in under 2 minutes at the YouTube link above. What a gift to comedy writers of the world. Have fun and enjoy your soon to be crafted Ontario financial...advisoir’s?

[admin]

https://www.cbc.ca/news/canada/nova-sco ... -1.4357154

Critics question settlement program for banks that overcharged fees

Some say the process isn’t transparent and doesn’t act as enough of a deterrent
Yvonne Colbert · CBC News · Posted: Oct 18, 2017 6:00 AM AT | Last Updated: October 19, 2017

Questions are being raised about allowing settlements with the banks and other investment firms that overcharged Canadians $354M (CBC)

As investors await refunds from banks and other financial institutions for hundreds of millions of dollars in excess fees and unpaid interest, critics are questioning the process around how the unwarranted charges were dealt with by their regulator.

Scotiabank, Royal, TD, CIBC and BMO, along with others, have all come forward to disclose they accumulated a total of $354 million in excess fees or unpaid interest on mutual funds and other investments.

TD had been charging the excess fees for 14 years, CIBC for 10 years, while others had been charging them for six to eight years. The largest amount of investor compensation came from CI Investments, which failed to pay $156 million in interest on some clients' mutual funds over a six-year period.

Canada's big banks admit they overcharged customers — what went wrong?

Financial institutions must issue refunds within two years of their settlement date. That deadline has already passed for some, while the process is ongoing for others.

Canadians learned of the unwarranted fees from the Ontario Securities Commission (OSC) after secret negotiations between the financial institutions and the OSC, the body that regulates them. The disclosures are the result of something called a no-contest settlement program introduced by the OSC in 2014.

No admission of guilt required

Those settlements mean none of the offenders had to admit wrongdoing or guilt; they simply agreed to fix the problem, pay back their customers and pay a fine.

It's a program the OSC's director of enforcement, Jeff Kehoe, calls "a huge success." But some are raising questions about it.

Stan Buell, president of the Small Investor Protection Association (SIPA), says these settlements are one more reason why his non-profit group, created to educate and advocate for consumers, feels there should be a public inquiry into the investment industry.

Stan Buell, president of the Small Investor Protection Association, says there should be a public inquiry into the investment industry.

"These no-contest settlements are absolving the industry of the responsibilities for the last 10 years,"

he said.

"I mean, how can regulators claim that they protect investors when these companies have been doing this for 10 years undetected?"

Buell asks, calling the settlements just a part of the "deception" of the investment industry.

'An easy out'

A former director of the OSC is also speaking out about the secret agreements.

"I haven't been a fan of [no-contest settlements] because I think it provides an easy out for people who have been involved in misconduct,"

Michael Watson, a former director of enforcement with the OSC, told CBC News. Watson is now a special adviser to the RCMP's integrated market enforcement program.

I think it provides an easy out for people who have been involved in misconduct.
- Michael Watson, former director of enforcement with the OSC
Watson said he has trouble seeing an appropriate resolution to such cases when no one is required to admit wrongdoing.

"I guess I was always concerned that if people were not prepared to stand up and admit they'd done something wrong that they might not see the harm in doing again,"

he said.

An adequate deterrent?

Lawyer Anita Anand, the J.R. Kimber chair in investor protection and corporate governance at the University of Toronto faculty of law, worries these agreements won't stop future wrongdoing.

"That is positive for the financial institution [but] it's not so positive for deterrence in terms of sending a message to the market that a certain type of behavior is simply not going to be permitted in Canada's capital markets,"

Anand said. "The law has to be seen to be fair and it is this perception of fairness that is my main worry."

New investment rules fail to reveal some hidden fees
Anand, like Watson, can see the benefits of the program in that the case doesn't drag on for years and investors do get refunds. Watson calls it a trade-off, adding it depends on what your objective is.

He points out the number of businesses coming forward to acknowledge overcharging clients speaks to the benefit of the program, since these are cases "that probably wouldn't have otherwise" become public.

Transparency issues

Anand wonders, though, whether the process is transparent enough and should be reviewed.

"The process occurs behind closed doors," she said. "It's not a trial. It's not a hearing. It's not a case in which you're going to have the public have access to proceedings in the way that you would with a trial or hearing. So there's less information coming forward on a daily basis about what is the process and the basis on which this no-contest settlement was reached."

Scotiabank, Royal, TD, CIBC and BMO, along with others, have all disclosed that they charged a total of $354 million in excess fees on mutual funds and other investments. (Kevin Frayer/Canadian Press)
Anand acknowledges the OSC does release no-contest settlement agreements, but not all documents leading to the agreements are made public "so again there is a transparency issue or at least a potential transparency issue there."

She said the U.S. Securities and Exchange Commission's decision to pull back from using the settlements indicates "there are valid issues to be discussed here relating to transparency and legitimacy and ultimately the public's interest."

Kehoe says the OSC uses such agreements in limited circumstances and argues they do serve to prevent future problems, adding the settlements were introduced as a way of "getting the case done in a timely way, getting investor harm remediated and fixing the problems."

Royal Bank to pay back $22M in investment fees it overcharged

He said a no-contest settlement has all the hallmarks of every other hearing they do.

"A fine is a stigma and a deterrence no matter how you label it."

Just about every major investment firm has entered into a no-contest settlement.

Financial institutions that have compensated Canadians as a result of no-settlement agreements. (CBC)
What should investors do?

It is now up to the financial institutions to identify affected clients, determine how much each is owed, make "reasonable efforts" to contact those who have been overcharged and reimburse them. There is no established method for those clients to determine on their own whether they are owed money or how much. Investors with questions should contact their bank or investment firm.

Anand said there is no strong reason to believe the amounts that have been calculated are incorrect.

Manulife in settlement deal with OSC after clients wrongly paid excess fees
"They likely are [correct] but the process itself is somewhat disconcerting," she said, adding it doesn't inspire public confidence "given that we have so very little information about the process by which the so-called compensation plans are calculated."

Anand's advice to investors is to become more knowledgeable about their investments and Canada's capital markets. She said while financial literacy is important, it doesn't relieve regulators of their responsibility to protect investors and ensure a fair market.

[admin]

Re: Securities law "exemptions". A license to steal?
Postby admin » 31 Jan 2019 03:01 pm

510 Exemptions granted by the OSC in 2017 and 410 in 2018 according to OSC staff

(Information as to number of public notices issued, or legislative required tests and documented procedures regarding protection of the public interest when granting exemptions, will be sought, and previously asked questions in this regard have not provided answers. In addition it will be asked how many exemption applications were received and rejected/accepted, numbers for each of these three categories)

From: inquiries@osc.gov.on.ca
Date: January 25, 2019 at 4:36:08 PM EST
To: (Name removed)
Subject: Re: File #20190121-25937 - Request for information

Dear (Name removed)

Thank you for your follow-up email about the number of exemptions granted by the OSC.

The chart below shows information for the previous two fiscal years, shown by OSC branch. The chart shows exemptions granted, with the exception of the Corporate Finance branch information which was for all applications. In the chart below, IFSP is the Investment Funds and Structured Products branch, and CRR is the Compliance and Registrant Regulation branch. More detailed information about each of these branches is available on the OSC website.


I understand your comment about the work required by OSC staff to review applications for exemptive relief, but this is a normal part of our regulatory role. The rules governing the OSC’s activities are designed to help fulfil our statutory purposes. However, the rules themselves also typically provide that exemptive relief may be requested, and, so, contemplate that the rules may not be practicable in all situations.

Just for some additional background on the process, as a general rule, applications for exemptive relief are expected to be made in writing and to set out the facts in the matter, the reasons for the application, and all relevant considerations and circumstances, as well as provide any supporting documents. Applications are reviewed on a case by case basis and the determination depends on the facts. The process often involves detailed follow-up discussions with applicants, and exemptive relief, if eventually granted, may be different from the original request and may include terms and conditions to address specific concerns, including appropriate investor protection. The Act and the rules are made with the statutory purposes in mind, as are decisions about potential exemptive relief.


Sincerely,

David DoRego
Lead Inquiries Officer
Ontario Securities Commission
inquiries@osc.gov.on.ca
416-593-8314
1-877-785-1555

The information in this e-mail should be taken as a guide. The content is not intended to provide investment, financial accounting, legal, tax or other professional advice and should not be relied upon or regarded as a substitute for such advice. We recommend that you seek advice from a qualified professional adviser before acting on the information or content appearing in this e-mail or any information or content on a web site to which a link has been provided.


From: (Name removed)
To: INQUIRIES@osc.gov.on.ca
Subject: Re: File #20190121-25937 - Request for information
Date: January 23, 2019 11:56 AM

Yes Please send 2017 and 2018 information
As investor advocates we are interested in how much industry participants can deviate from written laws via exemptions.
This creates a burden and extra workload for OSC staff

(Name removed)


Sent from my iPad

On Jan 23, 2019, at 11:32 AM, inquiries@osc.gov.on.ca <mailto:inquiries@osc.gov.on.ca> wrote:



<1D818483.gif>

Dear (Name removed)
Thank you for your inquiry to the Ontario Securities Commission (OSC) about the volume of regulatory exemptions granted by the OSC in 2017 and 2018.

Staff prepared statistics for fiscal years 2017 and 2018, which would be current to March 31, 2018. If you think that information would be helpful to you, please let me know. If you wanted more current information, it would take longer to prepare.

It might also be helpful if you could let me know why you need the information, and if you have a particular concern that I can address.

In addition, some information about exemptions is available on the OSC website (http://www.osc.gov.on.ca <http://www.osc.gov.on.ca/> ), including copies of exemptive relief decisions. If you wanted to review these decisions on our website, open the tab for “Securities Law & instruments”, then open the sub-heading for “Orders, Rulings & Decisions.”

I look forward to hearing back from you.

Sincerely,

David DoRego
Lead Inquiries Officer
Ontario Securities Commission
inquiries@osc.gov.on.ca <mailto:inquiries@osc.gov.on.ca>
416-593-8314
1-877-785-1555

The information in this e-mail should be taken as a guide. The content is not intended to provide investment, financial accounting, legal, tax or other professional advice and should not be relied upon or regarded as a substitute for such advice. We recommend that you seek advice from a qualified professional adviser before acting on the information or content appearing in this e-mail or any information or content on a web site to which a link has been provided.

Screen Shot 2019-01-31 at 3.00.57 PM.png

click on image to enlarge

510 Exemptions granted by the OSC in 2017 and 410 in 2018

according to OSC staff

From:(Name removed)
To: INQUIRIES@osc.gov.on.ca <mailto:INQUIRIES@osc.gov.on.ca>
Subject: Request for information
Date: January 18, 2019 12:44 PM

Can you please tell me what the number of regulatory exemptions granted in 2017 and in 2018 by the OSC?

Thank you

(Name removed)
admin
Site Admin

Posts: 2884
Joined: 06 May 2005 09:05 am
Location: Canada
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[admin]

Draft responses to general allegations provided in AB Public Interest Commissioner investigation request of April 14, 2019

1. Ignoring public protective principles, rules or laws which has the effect of enriching the industry, while doing financial injury to the public, to the government itself, and to our society overall.

a) Ignoring registration-category laws (representation) allows tens of thousands of commission sales-agents for the financial industry to misrepresent themselves to the public as if they were investment professionals who are registered and obligated to treat the public with a professional level duty of care, when such is not the case.

b) Alberta Securities Act Sec 100, requires the following, (see image below) which the ASC routinely (perhaps 100% of the time) ignores, resulting in no member of the Alberta investing public (retail investors) being fairly and honestly informed of the type of relationship they are trusting their life savings to.

c) The result is that millions of investors can be baited with a false “trusted professional advisor” promise, and then are surreptitiously switched to having the services of a commission sales agent...or a fee selling agent, one who legally represents the dealer interests...and not firstly the investor. (a "Dealing" Representative, as opposed to the implied promise of an "Advising" Representative)

d) “c” above allows billions of dollars to be harvested from unsuspecting investors who have had their confidence and their trust manipulated by these false representations.

e) A University of Toronto Pension study done in 2007, on one type of investment out of perhaps dozens, discovered that the different rates of return earned by retail investors, as opposed to institutional investors, whom receive the services of truly represented professional advisers, was a difference in return of 3.8% each year. Retail investors earned a return of 3.8% LESS, due to the clever ways the industry has to misrepresent retail investors, and then use industry sales-tactics to harvest too much of their future retirement security.

f) A “shortchanging” of just 2% of returns from (or costs added to) any investor, when compounded over a 35 year time horizon will cut the future value of the investor’s capital in HALF.

g) If retail investors have between $1 Trillion and $2 Trillion in mutual funds alone, this long term reduction in retirement capital available to retail investors could cause an unjust enrichment of the financial industry in amounts of hundreds of billions or dollars, and an accompanying “haircut” given to everyday Canadian investors of a similar amount...all with the clever use of ONE law, willfully and blindly ignored by Provincial Securities Commissions.

2. Allowing laws to be “exempted” for industry participants. Hundreds of quiet permissions to skirt laws are issued or approved by Securities Commissions without any public notice about the removal of those public protective laws, or even a warning to investors who place their money into “investments” which are now exempt from the law. The public is never even informed when this occurs.

Bank-underwriting dumping laws, allows poor selling or defective product to be dumped into bank managed mutual funds, to take mistakes off of the bank's shoulders and put them into the portfolio's of the bank's mutual fund investors.

False “portfolio managers” are created by exempting the lawful requirements to call oneself a portfolio manager. The net result is that Albertans get a commission or fee sales agent, representing the revenue interests of their employer, whilst giving investors opposite and untrue assurances.

Exempting laws which prohibit the sale of unrated financial products, one example of which allowed unrated sub-prime mortgage investments to be "dumped" into private investors accounts, muicipalities like Hamilton ON ($90 Mil) City of Lethbridge ($32 Mil), PPSP (Judges Pension $1 billion) etc one of the largest single crimes in Canadian history…all so that one Securities Commission executive earned a promotion to a newer $600,000 position…

https://www.osc.gov.on.ca/en/Securities ... aleant.htm

https://www.theglobeandmail.com/busines ... CtNFl6Aoeo


3. Evidence of refusal to interact with the public, preferring to refer the public to industry-paid self-regulatory bodies, which adds further conflicted layers and barriers to prevent fair and honest protection of the public interest.

a) Red carpet treatment exists for corporations seeking approvals to exempt laws, while members of the public are routinely rejected and shunted to industry trade bodies and/or self regulatory bodies whose interests are even more tightly aligned with the very industry that the public may be complaining about, or being abused by.

4. Reluctance and/or refusal to enforce certain Alberta Securities Act Legislation, even when the ASC is notified of violations which are deceiving or harming the public.

a) Written complaint of violation of laws, given to the ASC and followed up on, result in no action. ASC responses simply ceased without resolution. (indicative of an “unaccountability” problem with the public by the Alberta Securities Regulator, ASC)

5. Altering documents on ASC websites, adjusting explanatory terms and definitions for the public, and deletion or revision of historical records to the benefit industry participants, while significantly confusing information available to the public. 

a) changing salesperson registration category so the public are less able to understand the role (2009)


b) later altering the category definition of what the new term for “salesperson” actually means so that there can be more confusion and less clarity as to the redacted role. (Dec 2017?) InvAd.ca

6. Using industry-funded advertising campaigns, to cause the public to assume that the ASC is protecting Albertans, while the public is being given mis-leading information, or marketing puffery under the guise of public protective information.

a) ASC TV ads about Check first imply you should check registration….while clever hiding the fact that the registry check will NOT tell the public HOW they are registered nor WHAT it MEANS….due to #5 above (clever)

Search April 10, 2019 of the Alberta Securities Commission web page found:

10,748 results for the search of the word “Exemptive”

10,748 results for the search of the word “Exemption”

18,153 results for the search of the word “Decision”


Nearly every ASC “Decision" is supported with this statement:

Decision

“Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.”
“The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted.”

Written requests of other securities commissions to ask why no public members are allowed to have input on the granting of exemptions to Securities Act laws, were responded with the comment that

“there is no provision in the Act for input from the public”.

Source:
(John Stephenson? OSC, BOT 2004?)
==========

The following thoughts and images are used as indicators (pointers) only, and not sources or factual conclusions:

To commit the perfect crime, all one needs do is... To arrange the lights, the ballet, the scenery and the rest of the players in his own way...

0]Screen Shot 2019-04-09 at 5.01.14 PM.png[/attachment]

[admin]

The easiest way to set the stage for perfect crimes, is to control all of the actors...

April 13, 2019

Ms. Marianne Ryan
Alberta Public Interest Commissioner (APIC)
9925 – 109 Street, Suite 700
Edmonton, Alberta T5K 2J8   info@pic.alberta.ca 

Re: Request for a Public Interest Commission Investigation into The Alberta Securities Commission

Dear Commissioner Ryan,

This letter is to inform the Public Interest Commissioner of an Alberta government agency which consistently acts contrary to the public interest, resulting in tremendous financial harm to society while the agency wears a cloak of protecting the public interest. These acts appear impossible to justify under the ASC’s mandate and they seem quite inappropriate for a government agency.

In light of the SNC-Lavalin affair and of the former Attorney General's position on the impropriety of deferred prosecutions, etc.,  I believe this request for an investigation may be timely, especially since CBC revealed in this past week that the reporting and results of previous Parliamentary inquiry were allowed to be altered and/or redacted by financial industry participants who were the subject of the public complaints. **

The following are some acts by the Alberta Securities Commission (ASC) which appear to endanger both the principles and the public protection mandate of the ASC:

1. Ignoring public protective principles, rules or laws which has the effect of enriching the financial industry while doing financial injury to the public.


2. Allowing laws to be “exempted” (granting permissions to skirt the law) for industry members, without public notice about the removal of public protective laws, without transparent public process, and without public warning to investors who invest with advisers or in investments which are “exempt” from the law.

3. Evidence of refusal to interact with the public, and instead referring the public to industry-funded “self” regulatory bodies This adds layers and barriers between the public interest and impartial protection of the public.

4. Reluctance or refusal to enforce certain Securities Act Laws, even when the ASC is notified of financial industry/or ASC violations which are harming the public.

5. Altering documents on ASC websites, and redacting of public informative terms and definitions. Revision and deletion of historical records to benefit industry participants, while adding confusion to the information given to the public.

6. Use of industry-funded advertising campaigns, encouraging the public to assume that the ASC is protecting investors, while the ASC misleads the public by deliberate omission of the most crucial details.

Some corporate entities which have received exemption from laws in Alberta include each of the major banks, Bombardier, SNC, Goldman Sachs, Valeant Pharmaceutical, Sun Life, National Bank, Concrete Equities, Sub Prime Mortgage investments etc.. The list runs into thousands of exemptions to laws which the public is not made aware of.

It is proving dangerous to our shared society when our financial industry is allowed to select, to pay and to influence its own private watch dogs.

I offer to assist you in the documentation, substantiation and understanding of issues in this letter, in hopes that regulatory practices which act contrary to the public interest can enter into public and Legislature awareness.
 
I trust that the Public Interest Commissioner will undertake an investigation as soon as possible. If too many institutions fail to act when called upon we run the risk of becoming a failed state, which would be a great loss to this wonderful country.

https://www.britannica.com/topic/failed-state
 “Failed state......it cannot project authority over its territory and peoples....Its citizens no longer believe that their government is legitimate, and the state becomes illegitimate in the eyes of the international community.....A failed state is composed of feeble and flawed institutions.....the legislature, judiciary, bureaucracy,....have lost their capacity and professional independence.....Failed states create an environment of flourishing corruption.....where honest economic activity cannot flourish.
 

Yours Truly
Larry Elford, former CFP, CIM, FCSI, Associate Portfolio Manager, retired
Lethbridge Alberta

** CBC Bank regulator's report on aggressive sales tactics weakened after government — and banks — reviewed drafts
Documents reveal 'cosy' relationship between the government, the banking industry and its watchdog
https://www.cbc.ca/news/politics/fcac-b ... gKc-K-G3p4