Competition Bureau ignores Competition Act?

[admin]

On February 15, 2011, at 4:37 PM, larry elford wrote:


Feb 15th
to: Competition Bureau of Canada

Enclosed in order:

1) some enforcement matters relating to an investment person in Alberta
2) An article from Edward Waitzer, Financial Post · Tuesday, Feb. 15, 2011, suggesting that it is "fraud" to allow the misrepresentation that appears to be allowed by your agency (s)
3) An article from Ian C.W. Russell, Special to the Financial Post · Tuesday, Feb. 8, 2011, which appears to be written by another investment protection agency, seemingly in contrast to industry rules and supporting the misrepresentation or "fraud" against the public
4) Alberta Securities Commission Important definitions of the ASC’s Different Market Registrant Licenses from the ASC web site
5) "Misrepresentations to public" section 74.01 (1) A person ... who, for the purpose of promoting, ... the supply or use of a product or ... any business interest, by any means whatever, (a) makes a representation to the public that is false or misleading in a material respect.

It seems as if there may be a different answer to the difficult question of what is allowed and what is not, depending upon who is speaking. I write to you to see if you can clarify, on behalf of the public, the apparent misrepresentation of allowing persons licensed or registered in the category of "salesperson" (pre 2009) or "dealing representative" (post 2009) to call themselves anything and everything they wish to including such official license categories as "advisor", or non-official but equally misleading names such as "vice president", "wealth manager", "retirement advisor", "estate planner".

I realize in advance the difficulty that your organization may face in being truthful in this matter, but I urge you to please look past your immediate self interest, and look to the public interest instead. Millions of Canadians, friends and relatives of yourself, including your children, perhaps your children's children are at risk of being misrepresented by people who pose as professionals, without meeting the qualifications of having to act as professionals. This mistake should not be born on your head as well should it?

I thank you in advance for your reply with clarity so the public can be made aware in as simple and understandable terms as possible.

Larry Elford
lelford@shaw.ca

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enclosure #1

"Financial professionals and salespersons in Canada are allowed to call
themselves advisors, irrespective of their professional designation."

IIROC’s In the Matter of Dale Richard Wells – Penalty below that was released last week on February 11, 2011.

This timely IIROC Enforcement Notice Decision released last week suggests to me that not all / that some IIROC “Registered Representatives” are not registered—licensed in Alberta as “advisers / advisors”.

Does this IIROC Enforcement Notice decision last week definitively refute your statement in your FP Comment column today,
that “salespersons in Canada are allowed to call themselves advisors”?




Enforcement Notice
Decision
Please distribute internally to: Legal and Compliance
Contact:
Warren Funt
Vice President, Western Canada
604 331-4750
wfunt@iiroc.ca

Elsa Renzella
Director, Enforcement Litigation
416 943-5877
erenzella@iiroc.ca
11-0062
February 11, 2011



IN THE MATTER OF Dale Richard Wells – Penalty

Following a disciplinary hearing held on September 2, 2010, in Calgary, Alberta, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) has found that Dale Richard Wells conducted his business in a manner contrary to IIROC Rules by providing advice in securities when he was not properly registered to conduct business of that nature.

Specifically, the hearing panel found Mr. Wells committed the following breach of the IIROC Rules:

During the period February 2006 to July 2008, he acted as an advisor, within the meaning of the Alberta Securities Act, without being registered as such, contrary to IIROC Dealer Member Rule 29.1.

The Hearing Panel’s decision and reasons on the merits can be found at:

http://docs.iiroc.ca/DisplayDocument.as ... anguage=en

Following a penalty hearing held on February 1, 2011, the Hearing Panel imposed:

a $10,000 fine on Mr. Wells

and required him to pay Staff’s costs of $13,000. The Hearing Panel will issue its written reasons on the penalty on a later date, which will be made available atwww.iiroc.ca.

IIROC formally initiated the investigation into Mr. Wells’ conduct in March 2008. The violations occurred when he was a Registered Representative with the Lloydminster, Alberta Branch of First Financial Securities Inc., an IIROC-regulated firm. Mr. Wells continues to be employed as a Registered Representative with First Financial Securities Inc.

The Notice of Hearing is available at:

http://docs.iiroc.ca/DisplayDocument.as ... anguage=en

IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada (IDA) and Market Regulation Services Inc. (RS), IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets.

IIROC carries out its regulatory responsibility through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.



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enclosure # (2)
Make advisors work for investors

Edward Waitzer, Financial Post · Tuesday, Feb. 15, 2011
In January 2004, the Ontario Securities Commission released a concept paper advocating a "fair dealing model." The paper acknowledged that the regulatory regime -- regulating dealers and their representatives through the products they sell -- was based on the outdated assumption that transaction execution is the primary reason people seek financial services. Recognizing that most customers are seeking advice, the concept paper proposed changing the regulatory framework to focus on the advisory relationship.

Financial professionals and salespersons in Canada are allowed to call themselves advisors, irrespective of their professional designation. Few, however, are compensated directly for their advice. Instead, they are paid commissions to sell specific products. Addressing the conflicts of interest that result from commission-based compensation, the paper proposed that retail clients should be entitled to rely on objective advice that is in their best interest and, when there are conflicts of interest, they should be clearly disclosed so that the client can understand the conflicts and how they may affect the advice given.

In September 2004, the proposal was swept into a broader project of the Canadian Securities Administrators (CSA) and rebranded as the "client relationship model." Last month, the Investment Industry Regulatory Organization of Canada (IIROC) published its proposed reforms to establish requirements for the client relationship model. They specifically avoid imposing a duty on firms and their representatives to act in the best interest of clients, focussing instead on improving compliance with the existing "suitability" standard and improving disclosure with respect to conflicts of interest and performance reporting. IIROC noted that part of what influenced its thinking was an effort to harmonize with existing and proposed CSA standards (and other standards applicable to firms not under its jurisdiction).

To understand the difference between a "suitability" and "best-interest" standard, think of a student seeking advice at an electronics store about her need for a laptop. The salesperson recommends a highly priced unit with an expensive extended warranty -- all designed to generate the highest commission. The laptop is suitable--it will satisfy the student's needs. It clearly isn't the best solution and a disclosure obligation isn't likely to stand in the way of a motivated salesperson. If the salesperson had been bound by a "best-interest" standard, he would recommend a simpler, more reliable and affordable unit.

In the U.S., brokers and investment advisors are subject to different standards when providing investment advice. Many investors are unaware of these differences or their legal implications or find them confusing. In the wake of the global financial crisis, the Dodd-Frank Act required the Securities and Exchange Commission (SEC) to evaluate the effectiveness of existing legal or regulatory standards of care for providing personalized investment advice to retail customers. Five months later and with the benefit of over 3,500 comment letters as well as a survey conducted by the CFA Institute (which already requires both a suitability and best-interest standard of its members in order to use the Chartered Financial Analyst professional designation) SEC staff released its analysis and recommendations. It has proposed a uniform standard of conduct for all brokers, dealers and investment advisors providing personalized investment advice about securities to retail customers to act in the best interest of the customer.

The SEC staff study acknowledges that working through the details of such a standard so as to ensure it is practicable and cost effective will be complex. It does not propose a strict fiduciary duty, nor does it suggest rules to try to eliminate conflicts.

The U.K. Financial Services Authority (FSA) recently banned commissions for advised sales of retail investments and released proposals which would require advisors to explain why a product is better than a cheaper alternative. This and other more intrusive proposals are based on the FSA's realization that there are "fundamental reasons why financial services markets do not always work well for consumers."

The contrast in the direction, speed and intensity of regulatory reform between Canada and other major developed markets raises a number of questions and suggestions. Why did the OSC start down the path of a "best-interest" standard in 2004 and, while others (including the U.K., Europe and Australia) have caught up, we appear to have fallen back to where we started -- disclosure requirements and a relatively static "suitability" standard? To what extent is this a function of a fragmented regulatory framework suffering from bureaucratic inertia (and an industry suffering from regulatory fatigue)? What accountability mechanisms are required to motivate a more focussed and intense effort?

Why is it that Canadian regulators have shied away from proposing a "best-interest" standard? As one commentator to the SEC staff's study noted, "If the product sold is that of advice, then that advice should be in the best interest of the client. Anything else is fraud, because the seller is delivering a service different from what the consumer thinks he or she is buying." Many argue that it's the buyer's responsibility to do due diligence and shop around for the best price. But should caveat emptor apply when buyers think they are hiring a professional to do the shopping?

There may be light at the end of this tunnel. Hopefully, the robust regulatory reform efforts underway elsewhere will inform and impose some discipline on our own. The OSC has a new chair. It recently established a highly credible Investor Advisory Panel, which has added this issue to its list of initiatives. FAIR Canada, the Hennick Centre for Business and Law, and the Toronto CFA Society are convening a second annual symposium on the subject next week. Finance Minister Jim Flaherty has demonstrated genuine interest in investor protection -- most recently supporting a national strategy to strengthen financial literacy.

Canada takes justifiable pride in its financial institutions and infrastructure. In doing so we can ill afford to gloss over the nature of customer relationships or be perceived to lag other markets in our efforts to ensure fair dealing in financial markets.

- Edward Waitzer is a professor and director of the Hennick Centre for Business and Law at York University and a former chair of the Ontario Securities Commission.

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enclosure #3
INVESTING TODAY – SPECIAL SECTION

BUILDING TRUST

Searching for the right advisor
Ian C.W. Russell, Special to the Financial Post · Tuesday, Feb. 8, 2011
Over the course of a lifetime, the average Canadian makes some big expenditures -- such as housing, their children's education and eventually their retirement. The latter is especially important as government programs are inadequate for most Canadians and life spans have extended considerably.

But Canadians are too busy with job and family responsibilities and family life and lack the specialized expertise to manage their financial affairs as diligently as they need to be managed.

That is why most people need a trusted advisor to guide them through their financial decisions at every stage of their life.

A complex job requires professional commitment

Investment advice is a full-time job. This is not just because of the bewildering array of financial products and services, the incessant volatility of financial market asset prices, turbulence of the economy, expanding opportunities in a dynamic global marketplace and the importance of preserving capital given recent experience of unprecedented swings in financial markets and economic activity.

Financial management is a complex and full-time job because those assets selected to meet the return and risk objectives of the investor constantly change in value and risk, requiring corresponding portfolio adjustments to monitor the targeted risk-return investment objectives.

As well, investment objectives themselves change as investors move through their life-cycle, such as the shift from the goal of portfolio growth to income security as one approaches or enters retirement.

Where then do you find the right advisor? If the investor wants an advisor that can provide advice on the full array of financial products, including individual stocks and bonds, ETFs, mutual funds and privately managed funds, the starting point is to open an account with an IIROC-registered firm and an investment advisor employed by that firm.

The business activities of the IIROC-registered firm are subject to rules and oversight by the self-regulatory organization, the Investment Industry Regulatory Organization of Canada (IIROC).

An IIROC-registered broker meets high proficiency standards, duty of care to his or her client, rules governing the investment process and conduct of all client dealings, requirements for putting the client first in all transactions and ensuring best available price for purchased securities.

Moreover, IIROC-registered brokers are subject to high standards of supervision, regulatory oversight and audit. The IIROC-registered firm also meets rules and procedures for the safekeeping of client assets. It is no coincidence that the scandals that have beset the financial sector in recent years have occurred among firms outside the IIROC regulatory framework.

A good advisor must be more than someone able to give advice. The client must have confidence and trust in his or her advisor to forge a productive and successful working relationship.

The advisor, therefore, should have a good investment track-record, and provide clear financial statements to make all portfolio transactions, asset positions and performance understandable. The advisor must communicate frequently in terms comprehensible to the client, execute decisions in a thorough and diligent manner -- and charge reasonable fees for service. Further, an effective relationship is bolstered by the personal chemistry between the client and advisor.

The client should feel comfortable and open in dealing with his or her advisor and provide the personal financial information needed to make the appropriate investment decisions in line with portfolio objectives.

But all this comes back to the fundamental question. How does an individual find the right IIROC-registered Investment Advisor? Investors find advisors in many ways, through referrals from friends and family, from attending seminars hosted by an advisor, from advertisements in the media and from direct enquiries at IIROC registered firms.

Whatever the approach, it is important the client reserve judgment on his or her initial choice of advisor to ensure the right fit in terms of communication, quality of service and cost, and personal relationship. Investors should be prepared to shop around if they are less than satisfied with their initial choice. One wouldn't make any major decision without checking it out thoroughly. Choosing an investment advisor is one of the most important decisions you can make, and the potential benefits last a lifetime. A good advisor is well worth the time and effort of a thorough search.

-Ian Russell is president and CEO of the Investment Industry Association of Canada.

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enclosure #4

Province of Alberta Securities Commission web site

http://www.albertasecurities.com/Inside ... tions.aspx
Important definitions of the ASC’s Different Market Registrant Licenses
Adviser
a person or company engaging in or holding out the person or company as engaging in the business of advising others with respect to investing in or the buying or selling of securities or exchange contracts (Examples: Portfolio Managers, Investment Counsel and Securities Advisers)

Dealer
a person or company that trades in securities or exchange contracts as principal or agent (Examples: Investment Dealers, Mutual Fund Dealers and Scholarship Plan Dealers)

Investment Counsel
an adviser who shall not instruct any trades in securities, or exchange contracts on behalf of any client without advising the client of the specific trade being proposed, and obtaining the approval of the client for that specific trade

Investment Dealer
a firm that is registered to trade, buy or sell all types of securities. The Investment Dealers Association (IDA) registers these firms on behalf of the ASC.

Investment Fund Manager (or “Fund Manager”)
a person or company who has the power to direct and exercises the responsibility of directing the affairs of an investment fund

Mutual Fund Dealer
a firm that is registered to trade, buy or sell mutual funds

Portfolio Manager
an adviser registered for the purpose of managing the investment portfolio of the adviser’s clients through discretionary authority granted by the clients
Registrant
a person or company registered or required to be registered under Alberta Securities Act or the regulations

Salesperson
an individual who is employed by a dealer for the purpose of making trades in securities or exchange contracts on behalf of that dealer

Securities Adviser
an adviser who provides advice to a non-specific client, for example a newsletter or magazine

enclosure #5

PART VII.1 DECEPTIVE MARKETING PRACTICES

Misrepresentations to public

74.01 (1) A person ... who, for the purpose of promoting, ... the supply or use of a product or ... any business interest, by any means whatever, (a) makes a representation to the public that is false or misleading in a material respect.

[admin]

you simply must read Markarian vs CIBC case at www.investorvoice.ca

why?

because the judge's comments in and around section 263, if I recall correctly, speaks eloquently to the fraud, misrepresentation and misinformation perpetrated by the broker, CIBC and the industry overall.

These things (misrepresentations) are in the criminal provisions of the Competition Act of Canada.
Just try and get the comp bureau to understand their responsibility and act on these rules. They dont even get it.

Seriously, read the case and then ask yourself why no authiorities in Canada, police or otherwise have addressed the fraud involved.

[admin]

PART VII.1 DECEPTIVE MARKETING PRACTICES

Misrepresentations to public

74.01 (1) A person ... who, for the purpose of promoting, ... the supply or use of a product or ... any business interest, by any means whatever, (a) makes a representation to the public that is false or misleading in a material respect.

[admin]

April 6, 2009

Melanie L. Aitken, Interim Commissioner of Competition
50 Victoria Street
Gatineau, Quebec
K1A 0C9

Dear Melanie,

I am writing to notify the minister and the head of the Competition Bureau of what appear to be violations of duty by an officer of the Competition Bureau.

Sadly, what started out as a simple complaint about misrepresentation within the financial services industry, now must be looked at in the light of a failure to act on the part of a public servant in your agency.

Having recently given evidence of misrepresentation offenses to the Competition Bureau, offenses by members of the investment industry in Canada, I feel the officers charged to look after this complaint did not understand their duty to the Competition Act, and brushed aside the complaint claiming “others” were responsible. They failed to do the minimum required to even understand the allegations, and to understand their obligation to act on the complaint.

I add further, the unusual and unique circumstances whereby the competition officer I spoke to refused to place in writing her comments to me. I felt as if I were dealing with a third world bureaucrat when it became clear that secrecy was the method by which this person operated.

Here is the correspondence that this public servant was willing to place in writing to me:

April 2, 2008
Dear Mr. Elford,

I acknowledge receipt of your concerns. As you know, the Bureau is fully prepared to discuss your complaint by telephone. If you fail to contact the undersigned at the number indicated below prior to April 8, 2008, this matter will be considered closed.

Thank you for your attention to this matter.
Sincerely,

Valery Parkinson
Competition Law Officer

Other than the above, she refused to deal with my complaint in a written manner.
One would have to wonder what exactly she feels she has to hide.


After taking some time to consider the alternatives, and to further understand the issues, I write to repeat my concerns and complaints of misrepresentation of Canadian consumer, which I understand to be illegal under the act you administer. I add to these concerns, a further understanding that the criminal code of Canada prohibits act of negligence by officers of your department. I feel that the dismissal and the less than professional understanding and treatment of this case was an example of negligent behavior by one of your competition officers. Our economy is suffering extreme damage at this moment and I partially blame persons in positions of authority who look the other way and fail to understand their job. This appears to be the case here.

My original (and still unsolved) complaint was about the common practice of misleading and misrepresenting professional standards, duties, and obligations of a professional to customers when in fact the persons in the investment industry making this (mis)representation are licensed, trained and paid in an entirely different and distinct license category, namely the license category of “salesperson”. It takes less time to become a licensed financial salesperson in Canada than it takes to become a plumber or a hairdresser, and yet nearly each and every one of those persons is misrepresenting themselves to the consumer as a professional “advisor”. Please tell me that the Competition Act would not be interested if they were to discover persons representing themselves to be doctors, when in fact they held no such license or qualification.

I ask that this matter be treated with the maximum seriousness, and I suggest that failure to do so would place those officers a who brush this aside in violation of their duty. It may in future be found to be a case of negligence on the part of the Competition Bureau and those officers who fail to understand it, and fail to act.

I ask that all communications with the Competition Bureau about my original complaint, and about this subsequent complaint about the competition officer mentioned herein, be handled professionally, and in writing.

Thank you for looking into this matter,


Larry Elford
103 - 7 A Ave South
Lethbridge AB T1K 1N3
Cc:
Minister of Industry, The Honorable Tony Clement

Melanie L. Aitken, Interim Commissioner of Competition

Media

John Samuel
Director General, Management Accountability Framework

Christian Dion
Director, Planning and Performance, Management Accountability Framework

[admin]

April 2, 2008

Dear Mr. Elford,

I acknowledge receipt of your concerns. As you know, the Bureau is fully prepared to discuss your complaint by telephone. If you fail to contact the undersigned at the number indicated below prior to April 8, 2008, this matter will be considered closed.

Thank you for your attention to this matter.

Sincerely,

Valery Parkinson
Valery Parkinson
Competition Law Officer
Agente du droit de la concurrence
(819) 953-1610 fax/télécopieur(819) 997-3835
Parkinson.Valery@cb-bc.gc.ca
Competition Bureau/Bureau de la concurrence
50, rue Victoria Street, Gatineau QC K1A 0C9
Gouvernement du Canada - Government of Canada
www.cb-bc.gc.ca

[admin]

April 1, 2008

To: Valery Parkinson
Competition Law Officer

(819) 953-1610 fax/télécopieur(819) 997-3835
Parkinson.Valery@cb-bc.gc.ca
Competition Bureau/Bureau de la concurrence
50, rue Victoria Street, Gatineau QC K1A 0C9
Gouvernement du Canada - Government of Canada
www.cb-bc.gc.ca

Re: complaint alleging criminal violations of the competition act of Canada that are affecting Canadian investment consumers

Valery, it is my understanding that you refuse to discuss this matter in writing. It is also my understanding that you had already chosen to close this file, as per our conversation in March. I am frankly surprised at what possible motivations would allow you to close an investigation without interview with the complainant or with others who may have information of relevance, and quite shocked at your choice to maintain an unwritten record of your investigative process.

I will thus reiterate to you my concerns and will continue to try to have them investigated at a level where they may be dealt with.

"It is my belief that investment practices which are misleading and misrepresentative to the public are taking place with the knowledge and awareness of the Competition Bureau. It is thus becoming aware to me, that the ineffectiveness of this bureau is becoming a rather large component of support for investment industry misdeeds, misleading practices, and behaviors that are not in the interests of the investing public, not legal, and that these misdeeds are costing Canadians between $30 billion and $60 billion dollars per year. I trust that this matter warrants investigation and application of the law."


I thank you for your time.

Larry Elford www.investoradvocates.ca


CC. Madhavi Acharya-Tom Yew, Toronto Star

Former NDP Finance Critic Judy Wasylycia-Leis

NDP Industry Critic, Peggy Nash

NDP Finance Critic Tom Mulcair

Sheridan Scott, Commissioner for Competition Bureau

Minister of Industry, Hon Jim Prentice

Hon Scott Brison, Liberal Industry Critic

John Middlemiss, National Post jmiddlemiss@nationalpost.com

Jacquie McNish, Globe and Mail jmcnish@globeandmail.com

Brian Facey, Blake Cassels & Graydon

Neil Findelstein, Blake Cassels and Graydon

Ted Menzies, Parliamentary Secretary to The Minister of Finance

[admin]

From: Parkinson, Valery: #CB - BC
To: larry elford
Sent: Tuesday, April 01, 2008 7:18 AM
Subject: FW: query


Dear Mr. Elford,

This will serve as a reminder of the Bureau's invitation to contact the undersigned by telephone in order to obtain further clarification of, among other things, the application of the Competition Act and the operations of the Competition Bureau. We look forward to your contact at 819-953-1610 at your convenience.

Please be advised that if no response to this message has been received by April 8, 2008, this matter will be considered closed.

Sincerely,

Valery Parkinson
Competition Law Officer
Agente du droit de la concurrence
(819) 953-1610 fax/télécopieur(819) 997-3835
Parkinson.Valery@cb-bc.gc.ca
Competition Bureau/Bureau de la concurrence
50, rue Victoria Street, Gatineau QC K1A 0C9
Gouvernement du Canada - Government of Canada
www.cb-bc.gc.ca

[admin]

Dear Mr. Elford,

I acknowledge receipt of your concerns. As you know, the Bureau is prepared to discuss your complaint by telephone. Please provide a phone number in Alberta where we might contact you. In the alternative, please contact the undersigned at 819-953-1610 at your convenience and I would be pleased to answer any questions you may have.

Thank you for your attention to this matter.

Sincerely,

Valery Parkinson
Competition Law Officer

[admin]

To: Competition Law Officer

Thank you for your time on the phone the other day. I appreciate the polite discussion and I will continue to correspond further with your agency (as well as with others who may have an interest) in writing until such time as the Competition Act is applied properly and fairly as the law requires. I hope that your decision to close this file without first talking to myself or to others (victims of financial crime as well as industry experts who can document and support the allegations) will be corrected in light of our conversation and the following information. Please consider this an official appeal and a request to have the matter turned over to your appeals division for review.

You told me in our very first conversation, that you had already closed the file, without even an interview with myself or with victims of the crimes alleged in the complaint. It leaves a large number of victims without access to the law you were hired to administer. I cannot stress how short sighted and faulty this appears on the surface.

To also clearly convey to me that you refuse to communicate in writing about this matter indicates a level of secrecy about your activities, good or bad. This level of secrecy feels more like dealing with a Russian bureaucrat than a professional in the Canadian public service. I trust that there are professionals in the competition bureau who do not conduct their public service business in such secrecy, and I hope that this matter can be handled in a more professional less hidden manner.

For you to imply that (and I will paraphrase my understanding of your words) “I see no violation of the law here because there are other agencies who “should be” in charge, is to dodge the issue and fail in your job as a Competition Law Officer. Your agency is in charge of “misrepresentation”. These other agencies you mention to me as the solution may or may not be responsible for satisfying the requirements of this law, and indeed they may or may not be bothering to even follow this law. I say they are not. I have examples and victims who wish their voice to be heard. I hope your agency is able to investigate this properly and not simply question those who might be guilty, and accept their answer as the truth.

Finally, for you to dismiss this complaint prior to even talking to myself, or to known victims, or unbiased industry experts, and as you admitted, prior to even knowing if these other agencies were ever approached by me with the issue, is a true failure to investigate on your part. I am sorry but your job requires a higher degree of understanding of the matter at hand and also of the human suffering that may be caused or assisted by these failures to investigate.

I ask that this matter be turned over to a qualified investigative person who is capable of and willing to do an investigation into this matter. The credibility of the Competition Bureau deserves to be protected from the example that is currently in place.

I thank you for your time and I will look forward to hearing from the Competition Bureau so that this matter may be properly put to rest.

Larry Elford

[admin]

Having had the better part of a day to digest the treatment that my wife and I received from the competition bureau I can now make the following comments without quite losing control:

1. The competition bureau of Canada positively refused to correspond in writing on a formal complaint. Being forced to talk on the phone with a lawyer in the criminal division felt la lot like what I imagine dealing with a corrupt third world police official would be like. Fear of tape recorders, questioning me on who was in the room with me, scripted talking points, and again, a confirmation that there would be no written record of this conversation. Truly bizzarre to imagine all of this just to protect their department from having to investigate claims of financial misrepresentation and financial abuse of Canadians.

2. Without confirming whether or not I had made complaint to any other organization, this competition bureau informed me that the case was considered closed prior to even talking to myself on the complaint. No interview.

3. One of the reasons they deny investigation into misrepresentation is that there are other agencies responsible for this industry. I submit that if the other agencies responsible are in fact helping in the abuse of Canadians, then it should not matter who may or may not be responsible, but rather what should matter is whether or not Canadians are indeed suffering from misrepresentation or not. They did not see it as their problem.

I just cannot state enough how much of a consumer protection failure this agency behaved like. It was truly a case of "see no evil" with ones eyes closed in my opinion.

[admin]

I just spent some time on the phone with the competition Bureau. Someone in the criminal matters division in the Gatinuea Quebec office. She was very polite in informing me that the mandate of the competition bureau is in "protecting competitive markets" which I found quite shocking, since my discussion with her clearly indicated a less than priority, almost a non interest in whether consumers were being hurt or not.
I guess I was poorly informed when I assumed that the bureau took consumer protection to be a priority.

She informed me that since investment firm "advisors" appear to be "employees" they would fall under the supervision of firstly the investment firm to regulate, secondly the regulators and thirdly the self regulators, and she was unable or even unwilling to accept the possibility that these avenues may not serve the consumer properly. Misrepresentation in any way did not concern the competition bureau because of this, and she made it clear to me that she could not even understand that a self regulatory agency might not have a duty to protect consumers. Just not her problem.

I was left with my own conclusion that consumers cannot look to the competition bureau to even understand the problem, much less have any interst in pursuing a solution. Please take what you will from my comments and take them up with your legislator if you agree that this needs mention. I feel it (misrepresentation) is one of the root causes of repeated financial scams and schemes that Canadians suffer from.

She also confirmed to me that she refuses to correspond in writing on this matter, and it makes me wonder about the level of professionalism involved.

I will keep trying to find Canadians who can recognize, and understand the problems faced by those who are suffering from financial abuse, and I thank you for your comments and suggestions in doing so.

I cannot state how dissapointed I was in what was a very professional "brush off" by a bureaucrat. Without a single word in writing this issue is now considered "closed", by the agency.

I am sorry to divert any attention slightly away from the current ABCP crisis, but in my own misdirected way, I am trying to help those who are being taken advantage by this crisis.

Keep working. There will be a person in a position of responsibility who can recognize wrongdoing when they see it.

[admin]

posted on the facebook ACBP discussion page


On an indirectly related topic, I have been corresponding with the Competition Bureau of Canada on matters of misrepresentation, misleading sales practices and other violations of the competition act of canada.

These matters relate (in my opinion) to the ABCP situation in regards to the fact that all "advisors" who sold this product can be found to be licensed in the category of "salesperson" with the provincial securities commission (see www.osc.gov.on.ca registration categories for a list of salespersons in Canada) and I feel this to be drastic misrepresentation and thus an illegal practice.

Also related to your situation is the possible misreprestentation of the product you were sold as being top quality, backed and solid.

Enough said about the connection. I have posted the correspoondence with them at

www.investoradvocates.ca which is a web flogg I administer on matters of financial abuse of Canadians

there is also a small forum topic there on ABCP which I can update if anyone has comments they wish to add.

My problem today is that the competition bureau refuses to discuss this matter with me in writing, and I am asking them to correspond with me in writing to avoid some of the bureacratic brush off's and other dismissal treatments which public servants are able to use to avoid doing their job.

Does anyone have any solutions or ideas on how to get a government agency to do what they are charged with, and or to act in a professional manner? Is there a process to shed light on failure to act by a public servant?

I am trying to help in my own way, but it is frustrating to run into bureaurcats who seem to just work on how to not do the job.

thanks for any ideas yo may have
larry elford
lethbridge albertaReply to Your Post
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[admin]

Dear Mr. Elford,

As indicated in my previous correspondence to you, the Bureau is prepared to discuss your complaint by telephone. Please provide a phone number in Alberta where we might contact you. In the alternative, please contact the undersigned at 819-953-1610 at your convenience and I would be pleased to answer any questions you may have.

Thank you for your attention to this matter.

Sincerely,

Valery Parkinson
Competition Law Officer
-----Original Message-----
From: larry elford [mailto:lelford@shaw.ca]
Sent: March 18, 2008 5:14 PM
To: Parkinson, Valery: #CB - BC
Subject: official complaint to Competition Bureau on systemic matters which support and assist financial abuse of Canadians. Matters under Competition Act.


Valery, thank you for your response. I will request that our correspondence be in writing until such time as a personal meeting may be required. I would like to take a professional and an open transparent path in dealing with your department. Without wishing to offend you, myself and others have been trying to inform the Competition Bureau of financial abuses of Canadians for several years now without much response or action on the part of the bureau. I trust that you understand my hesitation in allowing possible white collar frauds of what may be hundreds of millions of dollars against the public to be handled by a telephone interview, or to be potentially dismissed by a telephone interview. Today, we are now facing the largest financial markets bankruptcy in Canadian history ($33 billion) and I believe it can be related back to systemic abuses that myself and other people have been trying to bring to the attention of your agency and to other regualtory agencies in our country for some time.

I will assure you that if the competition bureau treats this matter with the seriousness that the law requires, I will cooperate fully and to bring forth supporting evidence and testimony from industry experts, to support your investigation. Your help in demonstrating that your department is prepared to take such legal matters seriously is requested. We will not waste your valuable time if it appears as if the department is unable or for some reason unwilling to undertake an open minded investigation into these matters.

Generally, "best practices" in investigation involves a file number, a process, a procedure and a written set of guidelines that parties can be made aware of so there is less misunderstanding. In this regard would you please provide me with information in regard to what process your agency adheres to with complaints, so that myself and interested people can best assist you?

If you have questions which you feel will help you initiate an investigation, or understand the issues better, I would like the opportunity to answer them as best as possible, which may require me to incorporate the knowledge and supporting facts of others on the subject. This can be done best in writing. To enable your understanding of some of the issues, I have included my fifth letter to the Competition Bureau, which gives some fairly specific examples of matters which I believe to fall under your jurisdiction. Other industry experts known to me have similar, related issues that can be described to you in detail once a file or case number is assigned to these matters. The overall tone, and area of expertise of my complaints and of others is in the area of how the Canadian Financial Services (investment) industry serves Canadian consumers, and in matters which we feel that Canadian consumers are being financially abused by practices that fall under your jurisdiction.

I look forward to hearing from you, and to working with your department in a manner that will uphold the law that protects Canadian consumers.

Best regards

Larry Elford

CC. Madhavi Acharya-Tom Yew, Toronto Star

Former NDP Finance Critic Judy Wasylycia-Leis

NDP Industry Critic, Peggy Nash

NDP Finance Critic Tom Mulcair

Sheridan Scott, Commissioner for Competition Bureau

Minister of Industry, Hon Jim Prentice

Hon Scott Brison, Liberal Industry Critic

John Middlemiss, National Post jmiddlemiss@nationalpost.com

Jacquie McNish, Globe and Mail jmcnish@globeandmail.com

Brian Facey, Blake Cassels & Graydon

Neil Findelstein, Blake Cassels and Graydon

Ted Menzies, Parliamentary Secretary to The Minister of Finance

enclosure: letter number 5 to competition bureau Dated Feb 6, 2008

[admin]

Mr. Elford,
I am the competition law officer assigned to examine your query. The Bureau is prepared to discuss this matter with you by telephone. Please provide us with your phone number in Alberta and a time which is convenient for this discussion.
Thank you for your attention to this matter.
Sincerely,
Valery Parkinson

Valery Parkinson
Competition Law Officer
Agente du droit de la concurrence
(819) 953-1610 fax/télécopieur(819) 997-3835
Parkinson.Valery@cb-bc.gc.ca
Competition Bureau/Bureau de la concurrence
50, rue Victoria Street, Gatineau QC K1A 0C9
Gouvernement du Canada - Government of Canada
www.cb-bc.gc.ca

[admin]

Feb 6, 2008

To: Carey Daoust
Telephone (403) 292-6177
Fax (403) 292-6165
daoust.carey@cb-bc.gc.ca
Competition Bureau
400 639 5th Avenue Calgary,
Alberta T2P 0M9

From: Larry Elford

Re: Breaches of Competition Act, and two official complaints

I write to you for the fifth time in several years in hopes that the competition bureau will find the courage to investigate and enforce what may turn out to be a difficult and challenging complaint. Each time this bureau writes back to me suggesting that this matter does not warrant the application of the law.

Related information to this complaint and previous correspondence with the bureau can be found on the public record at:


www.investoradvocates.ca


It is my belief that practices which are misleading and misrepresentative to the public are taking place with the knowledge and awareness of the Competition Bureau, and that perhaps this Bureau is not taking action due to the strength of the industry involved and the inherent political difficulties in tackling this issue and this industry. It is thus becoming aware to me, that the ineffectiveness of this bureau is becoming a rather large component of support, for investment industry misdeeds, misleading practices, and behaviors that are not in the interests of the investing public, and that these misdeeds are costing Canadians between $30 billion and $60 billion dollars per year. I trust that this matter warrants full investigation and full application of the law.

Complaint #1 That misleading and misrepresenting advertising, and related activity is being used to misinform Canadian investment consumers that they are dealing with trusted investment professionals, when in truth, over 80% will be found to be dealing with persons licensed as “salesperson” under the Provincial Securities Act.
Under the criminal regime, the general provision prohibits all materially false or misleading representations made knowingly or recklessly.

The second complaint, which I feel to be a criminal violation of the Competition Act in Canada, is in the practice of investment firms prohibiting ethical investment salespersons from advertising “commission free” mutual fund sales to the public. I have found this to be the policy personally at two major bank owned brokerage firms, and I direct your attention to the following by way of example:

Despite an investment advisor owing a duty to care for a client seeking his or her advice, and despite that duty of care requiring the “advisor” to recommend the most “suitable” solution to the client to serve the client’s needs;

1. Your investigation will find it difficult to find evidence in Canada of any investment firm allowing the public to be openly told (advertising is specifically banned) that commissions were in fact deregulated in 1987, and that mutual fund commissions are fully negotiable.
2. Your investigation will discover from industry statistics that between 60% and 90% of mutual funds sold by the industry are sold using the choice of the “highest compensation”, when equal, identical and lower cost choices are available to the consumer. These practices are considered illegal, unethical and unsuitable, and are punished in the United States when they are discovered, and I write to ask this competition bureau why they are ignored here in Canada to the detriment of the consuming public?

The above two items point to a policy of “predatory pricing” in my opinion and or industry attempts to collude, gag, or prevent an environment of open competition. I feel open and free competition should be your department’s responsibility. These issues are not at this time addressable by the proper regulatory channels in the investment community due to the self-policing, and self-regulatory nature and the fractured nature of this regulatory community. According to the law, I feel it is up to your department to act on these complaints.

I look forward to your renewed interest in this issue, in light of greater public awareness of white collar fraud, crime and abuse of the public, and to your timely response to these complaints on behalf of all Canadians.

Best Regards

Larry Elford
Lethbridge Alberta www.breachoftrust.ca

CC. Madhavi Acharya-Tom Yew, Toronto Star
NDP Finance Critic Judy Wasylycia-Leis
Sheridan Scott, Commissioner for Competition Bureau
Minister of Industry, Hon Jim Prentice
Hon Scott Brison, Liberal Industry Critic
John Middlemiss, National Post jmiddlemiss@nationalpost.com
Jacquie McNish, Globe and Mail jmcnish@globeandmail.com
Brian Facey, Blake Cassels & Graydon
Neil Findelstein, Blake Cassels and Graydon