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Civil or Criminal Actions against companies or regulators

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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Mon May 21, 2012 1:43 pm

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https://docs.google.com/document/d/1g4UX8XHexmdYvBR9ijViEhiqGGEXrxIf132B22pI9Sc/edit


FRAUD OR MISCONDUCT BY FINANCIAL INTERMEDIARIES

(original link here http://www.mcmillan.ca/Files/142508_Fra ... iaries.PDF

A summary and report by Frank Palmay and Assunta Di Lorenzo of McMillan LLP

I hope that victims of financial abuse study this document. It should be a great help to those seeking a better understanding of what has happened to them and what they might be able to do about it. Do not accept the simple story about "markets down, you knew the risk". I suggest that the greatest risk facing investors today is that the financial intermediary (read salesperson) will defraud them using misconduct that the industry is willfully blind to.

This report as it stands it does not understand many of the "systemic" sleights of hand which make simple application of the law nearly impossible, but it is a very good (perhaps the best) starting place with which to begin revealing those sleights of hand.

(advocate comments below by no means meant to diminish a great report, but rather to broaden the perspective, and open the discussion wider)
=======================================================

1. One limitation to the report seems to me to be a view that fraud is mostly done by "bad apples" in the system, and it may not recognize, or be willing to discuss that some systems are designed to be "bad" for the public, and good for those who operate the system. My experience is that "systemic" fraud and professional misconduct is thousands of times more damaging to our country and our economic well being than a few simple bad apples in the system. For examples and numbers of the damages from overlooking this view see video presentation at http://youtu.be/aNh5laKO22o

2. On page one, bottom paragraph, are some comments about the efforts of the various securities commissions. From the comments and the tone it is apparent that the writers of this report are not versed in the inner workings of the securities regulators in Canada. I cannot claim to be myself, but having come from the inner workings of the largest banks in Canada, of over two decades within, I aware that securities regulators in Canada are bought and fully paid for (100% of salaries) by the financial industry they claim to regulate. The smartest money in Canada knows well that the game is rigged, with the help of captured regulators, almost entirely for the benefit of the industry. Again, this report is of tremendous value, except for the fact that none of it applies to crimes above $100 million. The law is great and all, but at higher systemic levels it simply has found nobody in the country with the will or the courage to apply it. Canada has no Elliot Spitzer or fighting attorney general. (see video above for lack of police budgets for higher value economic crime)

3. On page three, mid page, are comments about Bill C21, (Standing up For Victims of White Collar Crime Act). It discusses the importance of the two year minimum sentence creation for fraud over $1 million. What it misses is that the base legislation appears to have been written by banks, or by lawyers working for the banks, as the entire section 380 (2) as it covers "public markets" fraud was cleverly and craftily removed by those who drafted this legislation. Nice work if you have the ability to write your entire industry out of that aspect of the criminal code. (I was in parliamentary committee in Ottawa when this fact was brought up, and the young government lawyers who appeared to have had this act handed to them to sell already written, spoke a mile a or two without saying anything much to the question. They felt that the million dollar threshold would capture "any" public markets fraud. I personally can see a bank defrauding one million people of $1000 each, and arguing in front of a friendly judge that this act does not apply to them, as none of the frauds exceeded $1 million..............believe me, I have seen far worse. (see topic post at viewtopic.php?f=1&t=188&p=3072&hilit=c21#p3071 for a better view of section 380 Fraud, as it applies in C21 to "the rest of us, just not bankers".

4. On page three the final line on the page speaks about those "found to have violated the standards of regulatory authorities", and missed in this scenario is the that all salaries are paid to financial regulators by those they regulate. It thus causes me to bring up another comment on the and of the third of fourth paragraph of that page, the term "willful blindness". It applies not to the fraud and misconduct of financial intermediaries, but to Canadian regulators. But don't take my word for it.......read a US newspaper, and see if regulators were willfully blind in their markets. No, Canadians are NOT morally superior to the Americans? For salaries over $700,000. We simply have less of a media to disclose misconduct.

5. Page four second paragraph speaks well to the issue of "deceit". It caused me to scribble notes about the deceit practiced against all Canadian retail investors, namely leading them to believe they are dealing with trusted, trained, professional, or licensed financial "advisors", when in fact I have not found that to be the case. see topics at this forum on "advisor fraud" or topic "Fiduciary or not" on the bait and switch involved and the widespread deceit that these same regulators act willfully blind to.

6. Page 5, first paragraph jumped out at me when discussing the "broker client relationship to be a "spectrum" - on one end it was a relationship of full trust and advice, and on the other end, the broker does not provide any advice and acts as an "order taker" for the client. This is so wrong that words almost fail. When, in the history of selling investments has a salesman ever informed the public that they were nothing more than an "order taker", owing them no duty of care, and no fiduciary duty. Answer? Never. Pick up a magazine, newspaper, or look at a financial intermediary advertisement on your local bus shelter. None are suggesting anything but the highest end of the spectrum, trust, professionalism, codes of conduct, advice tailored to the needs of the client......every time. This is example of the "bait and switch" or fraud of lending the public to believe a relationship with a trusted professional, and then delivering something entirely different. Did I mention the word fraud?

7. Page six, middle of page has some rather incorrect information saying "although the tendency of the courts has been to find that the relationship between client and financial intermediary is a fiduciary one.......". I have seen many cases of large brokerage firms being called into court by abused clients, and I have seen more arguments won by the firms pulling out "discretionary" vs "non discretionary" account definition out of the woodwork, unbeknownst to the poor customer, this little trick had never before been explained to them, or disclosed. Just held up for the judge as proof that investment firms owe no duty of care to the client. End of case most times. (see court cases section at http://www.investorvoice.ca for some examples of trusting, vulnerable, elderly, dependent customers getting "beaten" with this bank and legal trickery)

8. Same page sic, last paragraph, "It has long been the case that when a person with special skills undertakes to give advice which he knows will be relied upon, he is under an obligation to do so with care". Ouch! That one really hurts it is so far out of touch with financial intermediaries. First, the line sounds good, but when viewed from the perspective of a financial giant, here is how we prefer to see it spun and presented......" the customer retained all decision making authority with the account and was thus the author of his own misfortune........further, investment markets inherently present a degree of risk, so we cannot be held accountable for downturns........etc". They can pull this little gem out, EVEN when they have knowingly sold a load of garbage, to the vulnerable client. Even when they have clearly taken advantage of the imbalance of knowledge, sophistication etc of the relationship and abused the client's interests.......they still can spin it in this way and usually get away with it.

People, and courts, still have not clearly differentiated between "he knew he was taking a risk......", and premeditated fraud and misconduct against the customer by the financial intermediary. The difference is huge.

Finally, for the ultimate insult, they can point out that they have "changed" the "client interest must come first" rule, and now it simply says the investments must be "suitable". Suitability is subjective, and is usually judged by the guy selling the investment........."ya, so what,...... the client wanted transportation and I sold him a cow.........it is suitable to ride a cow". (see http://www.examiner.com/article/broker- ... and-switch for a look at how the "customer first" oath has been sold out by financial intermediaries and regulators without informing the most important stakeholder......the public)

client sellout.jpg
click to enlarge image and to zoom in

This is what the rules used to say: (year 2000, source Canadian Securities Institute Conduct and Practices Handbook)

CLIENT FIRST 2000-1.jpg
click to enlarge image and to zoom in
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Sat May 05, 2012 2:29 pm

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In a previous post, a while ago, (GET YOUR MONEY BACK!
by admin » Sat Mar 10, 2012 5:30 pm) I mentioned a case of people who are suing a person who called themselves an investment "advisor", and then screwed the client over by acting out the role of a commission salesperson. A classic "bait and switch" game played a hundred thousand times each day in Canada to help steal the retirements of every Canadian who buys into the scam. (ain't self regulation great?)

Anyway, here is one of the responses giving to these clients, by the investment people who lied and misled: ""If the claimants did suffer any damage, such loss was caused or contributed to by the negligence of the claimants".

At the web site http://investorvoice.ca/Cases/Cases_Index.htm there is no end of such statements in such cases. I refer to it and post my thoughts and responses to such self serving arguments below, in the hopes that some may use them to avoid being similarly lied to , misled, and financially abused.

====================================================
(my comments to the folks doing the suing, and getting this response........."If the claimants did suffer any damage, such loss was caused or contributed to by the negligence of the claimants".)

funny.......smiling at my end.........not laughing at you..........

This is an attempt to divert attention blame, and distract from the underlying promise...........remember what the promise was......something to the effect of a promise of trust and integrity and investment advice and so on and so on, etc, blah, blah blah

1. If the defendants were willing to lie, misrepresent and operate without proper or actual license for what they posed as.............and if the defendants were willing to earn the trust of the clients posing as trusted professionals, then it is a bit contradictory to now claim that the strategies were in fact the fault of the claimants.

2. I could easier buy this argument, IF they told you up front of their exact license category...........they did not. They hid it instead.

3. I could easier buy this argument IF they told you up front that they were acting as "commission salespersons", and their entire compensation depended upon getting the client to "act" on their advice. They hid it instead.

4. I could easier buy this argument IF they told you up front that they "reserved the right" to give you investment "advice" which was not the best advice they had in their possession, but instead the best which maximized the commission payable to themselves, despite the resulting harm to your investment performance. They hid it instead.

5. I could easier buy this argument if they actually had made every professionally available step to choose the most suitable, most appropriate, AND most advantageous investment choice that was available to them, which they did not, instead choosing the investment choice which paid them the most money. They hid it instead.

6. I could easier buy this argument if they had told you up front of the various differences between a "discretionary" account, and an account that is non discretionary, including informing you of the differing duties of care owed to the client, and the legal outcomes or obligations resulting from knowing these differences. They hid it instead. (they are now using often used investment industry trick to try and weasel their way out of responsibility)

7. They are also trying to magnify the harm done by a borrowing strategy, claiming it was "your idea" of course.......while distracting the case away from their promise of being your "planner" or "advisor", and also distracting away from the many intentional harms they did to you with their choices to maximize their own commissions. (They "fooled" or "duped" you into the false belief they they were professionals at financial advice, and then they took advantage of this false trust to their own advantage, and your disadvantage. Pretty easy stuff from my angle. (my angle being a former CFP, CIM, FCSI, Associate Portfolio Manager, retired) They are now trying to hide this sleight of hand from the judge.

I could go on I suppose, but I will stop there for ease of understanding.

Do not buy the story and do not let it get to you. It is not personal. Do not take it personally. Stand back and smile at the immaturity of fully grown, fully adult looking men, acting like children. What they are doing is again, the verbal equivalent of a two year old child INSISTING that they DID NOT POOP IN THEIR PANTS!! (They hid it instead.:)

Understand it for that. Smile at it. Calmly point out that they were acting and promising a duty of professional care to you.......and you relied totally upon that care and advice. Again. go and re-read the judges comments in the case Markarian v CIBC. http://investorvoice.ca/Cases/Investor/ ... _index.htm

In fact read as many of the cases at this site as you can........and make sure you pass one or two of the better comments to your judge as part of your case materials. That will really piss off your defendants. There are a few really, really great judgements out there that you could use to stand upon.

Re, the comment, ""If the claimants did suffer any damage, caused by any fault of the firm, such loss was caused or contributed to by the negligence of the claimants", I would just ask that they show exactly where you were negligent. Was it when you believed them in any of the points listed 1-6 above? Or was it something else that they had in mind? I look forward to seeing the negligent act you performed......#7?.....

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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Mon Apr 23, 2012 9:35 am

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January 19, 2011
Norbourg investors declare 'a victory for us'
By BERTRAND MAROTTE
From Thursday's Globe and Mail
Victims of the financial fraud, Quebec's largest ever, reach a $55-million settlement

Wilhelm Pellemans says he never lost faith justice would be done and that he and the thousands of victims of the Norbourg financial fraud - one of the biggest in Canadian history - would ultimately be compensated for their losses.

The 70-year-old plastic surgeon said Wednesday he's more than satisfied with the $55-million settlement that will - subject to approval by a Quebec Superior Court judge - allow the 9,200 Norbourg victims to recover nearly all the money they lost in the massive scam.

"I am happy for myself and for the 9,200 others," Mr. Pellemans said at a news conference to announce an agreement in principle reached in a class-action suit against Quebec's securities regulator as well as Northern Trust Co. Canada, Concentra Trust, accountant Rémi Deschambault and accounting firms KPMG LLP and Beaulieu Deschambault.

The settlement, which involves no admission of liability, comes just days before the class action alleging negligence was to go to trial.

The fraud and embezzlement scheme, the largest ever in Quebec, was a key development leading to changes at the Autorité des marchés financiers (AMF) that included a near-tripling of its enforcement team. The provincial securities regulator, which has already paid $31-million to Norbourg Asset Management Inc. investors, will pay $20-million of the settlement.

Mr. Pellemans said that, while he never wavered in his belief that Norbourg investors would be compensated, ups and downs over the years led him to wonder if there would be full recovery for the victims. Many of them lost their life savings in the scam orchestrated by Vincent Lacroix, Norbourg Asset Management Inc.'s president.

Mr. Pellemans and co-lead plaintiff, investor Michel Vézina, alleged in the suit that the provincial regulator and firms that provided accounting or trust services to Montreal-based Norbourg didn't act soon enough to put a stop to the swindle at the mutual fund company.

"What we achieved today is a victory for us," he said.

Indeed, full recovery of money lost in big corporate fraud schemes is unusual, says Toronto forensic accountant Mark Rosen.

"It's very rare in Canada that you see that type of recovery," he said.

While the settlement is not a precedent, victims of convicted fraudster Earl Jones in Quebec are hoping it will strengthen their class-action suit against Royal Bank of Canada, which they allege should have known the Montreal investment adviser was stealing from his clients.

The Norbourg settlement means that all other ongoing legal action in the case will cease - including a move to win class-action approval against the Caisse dépôt et placement du Québec for allegedly not conducting proper financial checks when it sold an investment fund to Norbourg in 2003.

A spokesman for the regulator said it made sense to settle to avoid a long and costly court case. "We have learned lessons from Norbourg," he said, pointing to the beefing up of the AMF's enforcement team, to 120 staffers from 45, several years ago.

In addition to the $55-million that is expected to start being disbursed in about three months, about 925 Norbourg investors received $31-million in indemnities from the AMF compensation fund in 2007. Another $26-million has come from the sale of assets and tax refunds.

Mr. Lacroix was arrested in 2005, after the collapse of Norbourg.

He was convicted of securities act violations in 2007 and pleaded guilty in 2009 to nearly 200 criminal charges of fraud, conspiracy to defraud, money laundering and other illegal acts. He received a 13-year prison sentence, the longest for white-collar crime in Canada, but the term was later reduced. He has a parole hearing later this month and could be released to a halfway house soon after.

http://www.theglobeandmail.com/report-o ... le1875418/
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Sun Feb 26, 2012 9:32 pm

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Courts stepping up for aggrieved investors
BARRIE MCKENNA | Columnist profile | E-mail
OTTAWA— From Monday's Globe and Mail
Published Sunday, Feb. 26, 2012 7:00PM EST


Douglas Melville is an essential cog in the regime that shields millions of Canadian investors from abuse by financial institutions.

The Ombudsman for Banking Services and Investments can secure compensation if you lose money due to bad advice, mistakes or unfair treatment.

But the process falls short of “access to justice” for aggrieved investors, as Ontario Superior Court Justice Bryan Shaughnessy pointed out in a recent decision.

The industry-funded ombudsman can’t enforce payments or even compel member financial institutions to co-operate. And his recommendations are limited to claims of $350,000. Mr. Melville’s biggest stick is to publish the names of firms that don’t pay up – a “rather anemic remedy,” Judge Shaughnessy suggested.

“A truly impartial and independent body would have control over its process,” he declared bluntly.

And so the judge cleared the way for a class-action lawsuit against Industrial Alliance’s mutual fund subsidiary, Investia Financial Services Inc., along with Money Concepts (Barrie) and other affiliated companies and individuals.

The case centres on allegations that financial advisers systematically pushed clients of modest means to borrow large sums of money to buy mutual funds. The defendants deny the allegations, which haven’t been proven in court.

But the case highlights something much more important: that the patchwork of federal, provincial and self-regulation in the massive financial advice industry isn’t working.

Faced with regulatory lapses, the courts are stepping up. Already this year Ontario judges have given the green light to three major class-action lawsuits targeting financial industry sales practices.

“The three cases all show the courts are prepared to let clients proceed in a class action where either the firm or the regulator has not done an adequate job,” said Ottawa lawyer John Hollander of Doucet McBride LLP, who represents investors in the Investia case.

Earlier this month, another Ontario Superior Court judge gave the go-ahead to a class action against BMO Nesbitt Burns involving allegations of hidden fees on foreign exchange transactions in registered accounts, such as Registered Retirement Savings Plans. And an Ontario Court of Appeal judge has also cleared the way for a class-action suit against Investors Group subsidiary IG Investment Management Ltd. over losses suffered by investors due to alleged “market timing” of mutual funds.

The investor-adviser relationship is likewise attracting the attention of the Ontario Securities Commission. The OSC is exploring whether to impose a “fiduciary duty” requiring advisers to put their clients’ interests first – a standard similar to what lawyers, accountants and other professionals face.

Naturally, the financial services industry wants less regulation, not more. Some major institutions already deem the ombudsman’s moral suasion too onerous. Royal Bank of Canada and Toronto-Dominion Bank have pulled out of the banking complaints process entirely (although its brokerage subsidiaries remain in). In more than a dozen cases, firms have balked at paying settlements. TD’s pullout last year forced a cut in OBSI’s 2012 budget.

That prompted OBSI chair Peggy-Anne Brown to warn ominously last week that the ombudsman’s survival is threatened by a “power struggle” between the interests of consumers and “large and powerful financial firms.”

As Wednesday’s annual RRSP deadline nears, Canadians are increasingly masters of their own financial destiny. But they’re masters of a universe that’s fraught with market risk and imperfect regulation.

Canadians are getting squeezed by a volatile stock market, meagre returns on savings products and a financial services maze that too many don’t fully understand.

Many investors assume brokers and advisers have a duty to act in their best interests. But that’s not the legal obligation, and the line is unclear when advisers are compensated through unseen fees charged by the producers of those financial products.

“There is no government-enforced standard or mandatory professional oversight for competent, ethical and professional behaviour,” acknowledged the Financial Planning Standards Council, a not-for-profit group that oversees the Certified Financial Planner designation.

This matters now, more than ever, because policy decisions are shifting financial responsibility to individuals.

Workplace pensions are no longer the norm in the private sector as companies continue to scrap predictable defined benefit plans. Ottawa is essentially pushing an aging population into the arms of the financial services industry. RRSPs, tax-free savings accounts, registered education savings plans and the newly created pooled registered pension plans (for employees of small businesses) all encourage private savings, typically managed by financial advisers.

Shifting financial responsibility to individuals is a reasonable policy goal. But it doesn’t absolve governments of the obligation to shield Canadians from harm.

The courts are sending a pointed message.
http://www.theglobeandmail.com/report-o ... le2350409/
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Fri Feb 24, 2012 4:30 pm

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old, but interesting.........

For further information, please contact:

Paul C. Bourque Senior Vice-President, Member Regulation (416) 865-3038 or pbourque@ida.ca
IDA welcomes court decision

April 8, 2004 (Toronto, Ontario) -- The Investment Dealers Association of Canada (IDA) responded to today’s Supreme Court ruling regarding the request by Mr. Christopher Morgis to amend his lawsuit to include the IDA as a defendant.
“Today’s court ruling affirms the IDA’s position in this matter. Regulators must be free to regulate fairly and effectively in the public interest without fear or concern that they will be subjected to legal action,” said Senior Vice-President, Member Regulation Paul Bourque.

Today’s decision follows a recent decision by the Ontario Court of Appeals confirming that while regulators have an obligation to act in the broader public interest, they do not have a duty of care to individual clients of the organizations that are regulated. Consequently, individuals do not have grounds for action against regulators who have acted in good faith and in the public interest.
The Investment Dealers Association of Canada is the national self-regulatory organization and representative of the securities industry. The Association’s mission is to protect investors and enhance the efficiency and competitiveness of the Canadian capital markets.
- 30 -

(advocate comments....the legal games that "self regulators" play amount to decriminalization of far too many abusive activities they practice or allow.........the portion in red above gives me the greatest hope imaginable, in that proving these self regulatory types act contrary to the public interest, on a regular basis, is in my opinion, just a matter of printing up the record) I look forward to the action where this aspect is brought forth. See also postings at GET YOUR MONEY BACK and HOW MANY RULES BROKEN at viewtopic.php?f=1&t=188 For a sample of how easy it could be to show regulator gross negligence. (not just negligence, but gross negligence, bordering on conscious wrongdoing)
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Thu Feb 16, 2012 11:01 am

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Feb 16, 2012 – 6:59 AM ET | Last Updated: Feb 15, 2012 6:21 PM ET
BMO class action gets OK


Aaron Lynett/National Post

A BMO flag flies in front of First Canadian Place, the headquarters for BMO Bank of Montreal in Toronto.


Barry Critchley
Five and a half years on, a group of plaintiffs can do a little celebrating given that a class action lawsuit they brought against various entities of the Bank of Montreal has just been certified.
The next stage is for the bank to file a statement of defence (assuming it doesn’t appeal) in the matter that was started in August 2006 by James MacDonald, a former investment advisor at BMO Nesbitt Burns and which focuses on registered accounts held at the bank, the conversion of foreign currency in those accounts and the fees charged.
“This case is important because it brings to the court the practices of a significant financial institution on how they deal with registered accounts when doing foreign exchange transactions. We are hoping to prove our case and bring better transparency to the process and hopefully better pricing to the consumer,” said Kenneth Rosenberg, a partner at the law firm Paliare Roland Rosenberg Rothstein.
Along with Jeffrey Larry, Rosenberg, acted for the four plaintiffs MacDonald, John Zoppas, Lynn Zoppas and Tamas Varga in the matter that was put on hold for about four years to allow a similar action (but one that dealt with non-registered accounts) by other parties to proceed. About 15 months back work on the matter renewed and two weeks ago Justice Carolyn Horkins of the Ontario Superior Court of Justice made a 41-page ruling.
In her opinion the matter can proceed as a class action – with an estimated value of around $100-million – and will cover the period June 2001 to September 2011.
The dates are significant: prior to June 2001, Canadians could not hold foreign currency in registered accounts and in September 2011, BMO started offering registered accounts in foreign currency. Between those dates, the plaintiffs allege that when the currency conversions were made, “the defendants charged the account holder an exchange rate more favorable to the defendants than the rate at which the defendants purchased the currency,” wrote Justice Corkins.
Corkins wrote that “the plaintiffs allege that the foreign exchange fees were not disclosed to the account holder and were unnecessary and unauthorized.” Because of that, the plaintiffs argue the defendants breached their contracts, fiduciary duties, duties as trustees and have been “unjustly enriched.”
Accordingly, instead of acting as agent and trying to secure the best deal for the customer, the allegation is that the bank acted as principal by “selling you their own foreign exchange without declaring to you that they were doing it,” said Rosenberg.
The claim for damages follows because, Rosenberg alleges, the bank “could have done it cheaper,” making reference to a number of transactions where fees were paid.
Some of those were transactions done by MacDonald, who, after finding out that foreign currency could be held in a registered account, wrote to senior management asking why conversion was still occurring “without his authorization.” MacDonald didn’t receive a reply but wrote again and duly received a response on a “without prejudice” basis.
Rosenberg added while “people understand that money is made on this, we say that there has to be proper disclosure and transparency and you are entitled to know how much they are charging.”
Justice Corkins spends considerable time on the gaps between what BMO disclosed and what it practiced.
“There are no fees listed that deal with the conversion of foreign currency,” she wrote in a section titled “What did Nesbitt Burns disclose”?
Calls to BMO seeking a comment weren’t returned.


BMO NB RRSP FX Certification Decision Dated: January 31, 2012

@ http://www.paliareroland.com/pdfs/class ... 013112.pdf
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Wed Feb 01, 2012 4:49 pm

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Decision Dated: January 31, 2012

http://www.paliareroland.com/pdfs/class ... 013112.pdf



BMO RRSP Class Action Update

IMPORTANT NOTE:
This website has been developed to provide general information to potential class members on a number of class actions that have been commenced by Paliare Roland Rosenberg Rothstein LLP.
The site is not designed to answer questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as a substitute for individual legal advice.
The information collected about potential class members will assist counsel in prosecuting the class action and assessing what damages were suffered by the class as a whole. Providing the information requested does not make you the client of Paliare Roland Rosenberg Rothstein LLP. The court will ultimately decide who will be included as a class member.
Status
This action has now been certified as a class proceeding.
On January 31, 2012, Justice Horkins released her Reasons for Decision certifying this action as a class proceeding. Her Reasons can be viewedhere.
It is expected that the defendants will seek leave to appeal from this decision. Further updates will be posted as the case develops.
The Claim
In 2006, a class action was commenced on behalf of a proposed class of individuals with registered accounts administered by BMO Nesbitt Burns Inc., BMO Trust Company, BMO Bank of Montreal and BMO InvestorLine Inc. in respect of foreign exchange transactions in RRSP, RRIF and RESP accounts (the “MacDonald Action”). The claim alleges, in general, that the defendants are not authorized to carry on the practice of automatically converting foreign currency in registered accounts after June 2001 changes to the Income Tax Act.
The Class
The Class has been defined as:
All current and former clients of BMO InvestorLine Inc. (“InvestorLine”) and BMO Nesbitt Burns Inc. (“BMO NB”) resident in Canada, who held one or more registered accounts administered by BMO Trust, BMO NB and/or InvestorLine Inc. (the “Trust Accounts”) and purchased or sold investments denominated in foreign currency in their Trust Accounts or were paid dividends or interest in a foreign currency in their Trust Account(s), or otherwise received foreign currency into their Trust Account(s) which was then converted to Canadian dollars by the defendants during the period between:
i. June 14, 2001 and September 5, 2011 for:

a. all clients and former clients of InvestorLine;

b. the 14 clients of BMO NB who opted out of the class proceeding entitled Skopit v. BMO Nesbitt Burns Inc., either entirely or with respect to the overlap period with this action; and

ii. October 1, 2002 and September 5, 2011 for all other clients of BMO NB.

If you fall within the definition, you are part of the class. Formal notices of certification will be published once any appeals have been resolved.
If you have any questions, please contact class counsel at:
Toll Free: 1-888-569-4526
e-mail: info@rrspclassaction.com
Decision Dated: January 31, 2012

http://www.paliareroland.com/pdfs/class ... 013112.pdf
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Tue Jan 31, 2012 9:31 pm

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Know the Law
Class-action ruling shocks Bay Street
Julius Melnitzer Jan 31, 2012 – 2:19 PM ET


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The Ontario Court of Appeal has shocked Bay Street by ruling that capital-markets participants who settle complaints with the Ontario Securities Commission for less than the full value of investors’ damages remain liable to class-action lawsuits.

The Court’s decision in the case of Fischer v. IG Investment Management Ltd. confirmed the certification of a class action against alleged wrongdoing by five defendant mutual fund managers in the mutual fund market-timing debacle in 2004.

“This decision provides long-awaited crisp guidance to judges, lawyers and corporations as to the critical role class actions play in providing for access to justice in the context of securities cases,” says Joel Rochon of Toronto’s Rochon Genova LLP, who, with colleagues Peter Jervis and Sakie Tambakous, represented the class.

The ruling means the lawsuit against CI Mutual Funds Inc. and AIC Ltd. can proceed to trial. The other defendants, IG Investment Management Ltd., Franklin Templeton Investments Corp. and AGF Funds Inc. were not involved in the appeal as they chose to settle the class-action suits.

The ruling puts considerable pressure on the remaining defendants to settle to avoid the cost of a lengthy and complex trial.

“CI and AIC will probably settle, too, now because they don’t seem to have much of a defence left,” says Kirk Baert of Toronto’s Koskie Minsky LLP, who regularly represents plaintiffs in class actions.

The ruling has wide repercussions. It means a class action can’t be blocked simply because there is regulatory remedy for some alleged wrongdoing.

“Ontario’s Class Proceedings Act requires that a class action be the preferable procedure for resolving a dispute before it can be certified,” says Benjamin Zarnett of Toronto’s Goodmans LLP, who, with colleagues Jessica Kimmel and Melanie Ouanounou, represented CI. “So arguably Fischer could apply in any case where companies are holding up an alternative process, whether it’s regulatory or voluntary, as a preferable alternative to a class action.”

The Fischer case arose in the wake of the market-timing scandal. The OSC commenced proceedings against the five defendant funds. It claimed they failed to act in the public interest in relation to the market-timing activity in their funds.

The regulatory proceedings ended when the funds agreed to pay $205-million to aggrieved investors. The settlement agreements specified that they were without prejudice to the rights of investors to bring civil suits against the mutual-fund managers with respect to the same subject matter.

Dennis Fischer and other representative plaintiffs initiated the class action after the OSC proceedings ended. The investor plaintiffs sought to recover the difference between the OSC settlement and the hundreds of millions of additional dollars they maintained were required for full compensation.

In January 2010, Mr. Justice Paul Perell of the Ontario Superior Court of Justice refused to certify the case, but the Divisional Court reversed his ruling. The Court of Appeal upheld the Divisional Court result, but for different reasons.

The last word on the subject, however, may not yet have been heard.

“CI is looking very carefully at the feasibility of bringing a leave to appeal application to the Supreme Court of Canada,” Mr. Zarnett says. “It’s a very important issue involving matters of principle, to which each of the three courts that pronounced on it in this case have taken a very different approach.”
http://business.financialpost.com/2012/ ... ay-street/
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Tue Jan 17, 2012 3:03 pm

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Supreme Court smacks down B-D's suit against Finra
Plaintiff argued that proxy soliciting member approval for NYSE combo was fraudulent

By Dan Jamieson
January 17, 2012 2:51 pm ET

(Photo: Dan Macy)

The U.S. Supreme Court today declined to hear an appeal of a lawsuit filed in 2007 by a broker-dealer against NASD.

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The firm, Standard Investment Chartered Inc., sued the NASD over its merger with the regulatory unit of the New York Stock Exchange, claiming the proxy used by the NASD in soliciting member approval for the merger was fraudulent.

The NASD since has been renamed the Financial Industry Regulatory Authority Inc.

In 2010 a New York federal court dismissed the claim, and last year, the 2nd U.S. Circuit Court of Appeals upheld that decision.

“We are pleased that the Supreme Court determined not to take the case,” Finra spokeswoman Nancy Condon said in a statement.

“We believed the 2nd Circuit Court's opinion was consistent with rulings of other courts that have addressed the issue of immunity for SROs.”

“Members of Finra will never have their day in federal court to prove that Wall Street's regulators themselves committed a significant financial fraud,” William Anderson, one of Standard's attorneys at Cuneo Gilbert & LaDuca LLP, wrote in an email.

Jack Norberg, chairman of the firm, was not immediately available for comment.

NASD was able to get the merger approved by member firms with the help of a $35,000 payment. Standard claimed that the self-regulator and its officials lied in the proxy and other communications when they claimed $35,000 was the most that could be paid under Internal Revenue Service rules.

Government entities, including private organizations with government-delegated authority, generally enjoy absolute legal immunity in performing official duties. Court cases have granted protection specifically to securities self-regulatory organizations.

Standard argued that the merger was not a legally protected regulatory function of Finra.

The brokerage firm wanted the Supreme Court justices to hear that case because it claims that lower courts have issued conflicting opinions on immunity for SROs and other state actors.

The Standard suit already had been thrown out twice by courts — in 2010 by a New York U.S. District Court judge and again last year by the 2nd U.S. Circuit Court of Appeals.

SEC Chairman Mary Schapiro, former head of NASD, was one of the officials named in the lawsuit.

A number of outside organizations filed friend-of-the-court briefs for Standard, urging the Supreme Court to take up the case and address the limits of legal immunity for SROs.

In dismissing the case, lower courts found that NASD's proxy and merger were part of its regulatory activities and thus legally protected.

http://www.investmentnews.com/article/2 ... e=20120117
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Sun Jan 15, 2012 9:12 pm

Mount Real victims feeling 'forgotten'


By PAUL DELEAN, The Gazette February 26, 2011

Losing money in a financial scam is a blow in itself.

Feeling that nobody cares just makes it worse.

"I'm not looking for pity. But people should know (how vulnerable they are). I'm not an idiot, it happened to me, and it could happen to you unless the system starts providing more protection for citizens," Bruno Pelletier says.

A successful Quebec recording artist best known for his starring role in the celebrated musical Notre Dame de Paris, Pelletier is now shining a spotlight on the 2005 collapse of Montrealbased Mount Real Corp. He was one of the 1,600 investors who lost an estimated $130 million.

Like many of the victims, he wonders why the Norbourg and Earl Jones scandals appeared to be a greater priority for the media, regulators and legal system.

Pelletier, 48, says he lost about $200,000 in Mount Real and a further $50,000 when another scandalwracked investment company from Quebec, Norshield Asset Management, also tanked in 2005.

Pelletier said a neighbour (and former friend) was an independent financial adviser and he's the one who proposed and steered him into Mount Real promissory notes then paying eight or nine per cent.

It was a publicly traded company, audited by professionals and the interest was paid regularly at first, which reassured him, Pelletier said.

"My career was going well a decade ago, I sold a lot of records and for the first time in my life I had money to invest," he said.

He had no inkling of any trouble until another friend emailed him a newspaper story that raised doubts about Mount Real. "I immediately called my adviser, who said the story was bull----."

Two months later, Mount Real was history.

"I lost everything," Pelletier said.

"It's not money I can easily replace because the music business has changed dramatically since then."

Initially skeptical that he'd ever get money back, Pelletier says he's encouraged by the recent out-ofcourt settlement in the Norbourg class-action suit that will see all 9,200 investors in its mutual funds getting back almost all their capital.

Like 90 per cent of the Norbourg clients, Mount Real investors initially were told they weren't eligible for payments from the indemnity fund of Quebec securities regulator L'Autorité des marchés financiers. They responded the same way: by initiating a class-action suit.

In the Norbourg case, the AMF reversed course just before the suit was scheduled to go to trial earlier this year and agreed to put $20 million into a $55-million settlement package.

The Mount Real group, however, still is waiting for a hearing to get its class-action suit authorized by the courts.

"We've been waiting almost six years for some resolution," Pelletier said. "A few advisers have had their knuckles rapped. There's been nothing for us. A lot of people are broken, discouraged, fatalistic. Some had to go back to work. It's like we've been forgotten."

pdelean@ montrealgazette.com
© Copyright (c) The Montreal Gazette
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Tue Dec 20, 2011 3:24 pm

Advocate Comment: "Fascinating concept. (for those like myself with no life other than wondering where the money went....) First time I have seen any action in Canada to bring to court allegations of public agents breaching the public trust, in this case, a civil action to restore the Bank Of Canada back to it's intended basics......allegations that foreign money powers may have captured and control our financial foundations for their own benefit. Along the lines of the "End the Fed" talk in the USA. Could be something historical here."
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(please forgive me for the graphic image, related as it may be it is not part of the press release of this lawsuit, but my own addition, advocate)
================================================================

Date: Mon, 19 Dec 2011 16:45:31 -0500 (EST)
Subject: COURT CHALLENGE--Bank of Canada and Minister of Finance, Defendants
From: rocco@idirect.com

Please find below and attached, self-explanatory media release.

Please also find attached the statement of claim filed in federal court.


PRESS RELEASE TORONTO, ON., CANADA- 19/12/2011

TWO CANADIANS AND A CANADIAN ECONOMIC THINK TANK CONFRONT THE GLOBAL
FINANCIAL POWERS IN THE CANADIAN FEDERAL COURT.

THE CANADIANS PLEAD FOR DECLARATIONS THAT WOULD RESTORE THE USE OF THE
BANK OF CANADA FOR THE BENEFIT OF CANADIANS AND REMOVE IT FROM THE CONTROL
OF INTERNATIONAL PRIVATE ENTITIES WHOSE INTERESTS AND DIRECTIVES ARE
PLACED ABOVE THE INTEREST OF CANADIANS AND THE PRIMACY OF THE CONSTITUTION
OF CANADA

Canadian constitutional lawyer, Rocco Galati, on behalf of Canadians
William Krehm, and Ann Emmett, and COMER (Committee for Monetary and
Economic Reform) on December 12th, 2011 filed an action in Federal Court,
to restore the use of the Bank of Canada to its original purpose, by
exercising its public statutory duty and responsibility. That purpose
includes making interest free loans to municipal/provincial/federal
governments for “human capital” expenditures (education, health, other
social services) and /or infrastructure expenditures.

The action also constitutionally challenges the government’s fallacious
accounting methods in its tabling of the budget by not calculating nor
revealing the true and total revenues of the nation before transferring
back “tax credits” to corporations and other taxpayers.

The Plaintiffs state that since 1974 there has been a gradual but sure
slide into the reality that the Bank of Canada and Canada’s monetary and
financial policy are dictated by private foreign banks and financial
interests contrary to the Bank of Canada Act.

The Plaintiffs state that the Bank of International Settlements (BIS), the
Financial Stability Forum (FSF) and the International Monetary Fund (IMF)
were all created with the cognizant intent of keeping poorer nations in
their place which has now expanded to all nations in that these financial
institutions largely succeed in over-riding governments and constitutional
orders in countries such as Canada over which they exert financial
control.

The Plaintiffs state that the meetings of the BIS and Financial Stability
Board (FSB) (successor of FSF), their minutes, their discussions and
deliberations are secret and not available nor accountable to Parliament,
the executive, nor the Canadian public notwithstanding that the Bank of
Canada policies directly emanate from these meetings. These organizations
are essentially private, foreign entities controlling Canada’s banking
system and socio-economic policies.

The Plaintiffs state that the defendants (officials) are unwittingly and
/or wittingly, in varying degrees, knowledge and intent engaged in a
conspiracy, along with the BIS, FSB, IMF to render impotent the Bank of
Canada Act as well as Canadian sovereignty over financial, monetary, and
socio-economic policy, and bypass the sovereign rule of Canada through its
Parliament by means of banking and financial systems.

A press conference will be held on Wednesday, December 21st, 2011 at 10:00
a.m. to answer any questions the media may have of the Plaintiffs at: 637
College Street, Suite 203, Toronto, Ontario.

A copy of the filed statement of claim is attached.


ROCCO GALATI LAW FIRM
PROFESSIONAL CORPORATION
Rocco Galati, B.A., LL.B., LL.M.
637 College Street
Suite 203
Toronto ON M6G 1B5

TEL: 416-536-7811
FAX: 416-536-6801
==================================================
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(please forgive me for the graphic image, related as it may be it is not part of the press release of this lawsuit, but my own addition, advocate)
COURT SEAL
Court File No.:T-2010-11


FEDERAL COURT
B E T W E E N:

COMMITTEE FOR MONETARY AND ECONOMIC REFORM (“COMER”), WILLIAM KREHM, AND ANN EMMETT
Plaintiffs
- and -

HER MAJESTY THE QUEEN, THE MINISTER OF FINANCE,
THE MINISTER OF NATIONAL REVENUE, THE BANK OF CANADA,
THE ATTORNEY GENERAL OF CANADA
Defendants

STATEMENT OF CLAIM

(Pursuant to s.17 (1) and (5)(b) Federal Courts Act,
and s.24(1) and 52 of the Constitution Act, 1982)

(Filed this 12th day of December, 2011)


TO THE DEFENDANT:

A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the Applicant. The claim made against you is set out in the following pages.

IF YOU WISH TO DEFEND THIS PROCEEDING, you or a solicitor acting for you are required to prepare a statement of defence in Form 171B prescribed by the Federal Courts Rules, serve it on the applicant’s solicitor or, where the applicant does not have a solicitor, serve it on the applicant, and file it, with proof of service, at a local office of this Court, WITHIN 30 DAYS after this statement of claim is served on you, if you are served within Canada.

Copies of the Federal Courts Rules, information concerning the local offices of the Court and other necessary information may be obtained on request to the Administrator of this Court at Ottawa (telephone 613-992-4238) or at any local office.

IF YOU FAIL TO DEFEND THIS PROCEEDING, judgment may be given against you in your absence and without further notice to you.


Date: December 12th, 2011 Issued by:


Address of local office:

Federal Court of Canada
180 Queen Street West, Suite 200
Toronto, Ontario M5V 3L6


TO: Department of Justice
Ontario Regional Office
First Canadian Place
The Exchange Tower
130 King Street West
Suite 3400, Box 36
Toronto, Ontario
M5X 1K6


AND TO: Bank of Canada
234 Wellington St.
Ottawa, Ontario
K1A 0G9


CLAIM

The Plaintiffs claim:

declarations that:

the Minister of Finance, and Government of Canada is required to request, and that the Bank of Canada is statutorily required, when necessary, to make interest-free loans, on the terms set out under s.18 (i) and (j) of the Bank of Canada Act, RSC, 1985, c. B-2 (the “Act”) for the purposes of “human capital” expenditures and/or municipal/provincial/federal “human capital” and/or infrastructure expenditures;
that the “Government of Canada”, the Minister of Finance, and Her Majesty the Queen in Right of Canada, with the Bank of Canada,
A/ have abdicated their statutory and constitutional duties with respect to ss. 18(i) and (j) of the Bank of Canada Act which subsections read:
18. The Bank may

(i) make loans or advances for periods not exceeding six months to the Government of Canada or the government of a province on taking security in readily marketable securities issued or guaranteed by Canada or any province;

(j) make loans to the Government of Canada or the government of any province, but such loans outstanding at any one time shall not, in the case of the Government of Canada, exceed one-third of the estimated revenue of the Government of Canada for its fiscal year, and shall not, in the case of a provincial government, exceed one-fourth of that government's estimated revenue for its fiscal year, and such loans shall be repaid before the end of the first quarter after the end of the fiscal year of the government that has contracted the loan;




B/ and further that the refusal to request and make (interest free) loans under s. 18(i) and (j) of the Bank of Canada Act has resulted in negative and destructive impact on Canadians by the disintegration of Canada’s economy, its financial institutions, increase in public debt, decrease in social services, as well as a widening gap between rich and poor with an continuing disappearance of the middle class;
that s. 18(m) of the Bank of Canada Act, and its administration and operation, is unconstitutional and of no force and effect, in Parliament and the government, including the Defendant Minister of Finance, abdicating their duty to govern, and insofar, as monetary, currency and financial policies, per se, are concerned, and in turn as they effect socio-economic governance, have abdicated their constitutional duty(ies)and handed them over to those international, private entities, whose interests, and directives, are placed above the interests of Canadians, and the primacy of the Constitution of Canada, not only with respect to its specific provisions, but also with respect to the underlying constitutional imperatives, and which provision reads:
(m) open accounts in a central bank in any other country or in the Bank for International Settlements, accept deposits from central banks in other countries, the Bank for International Settlements, the International Monetary Fund, the International Bank for Reconstruction and Development and any other official international financial organization, act as agent or mandatary, or depository or correspondent for any of those banks or organizations, and pay interest on any of those deposits;

that the maintaining of minutes of meetings by the Governor of the Bank of Canada, with other central bank “governors” from other states and federation(s), as secret and not open to parliamentary and public view and scrutiny, constitutes:
ultra vires action by the Governor of the Bank of Canada contrary to inter alia, s. 24 of the Act;
unconstitutional conduct by the Governor of the Bank of Canada;
that the Parliament of Canada, in:
allowing the Governor of the Bank of Canada to hold secret the nature and content of his meetings with other central bank(ers); and
in not exercising the authority and duty contained in 18(i) and (j) of the Act; and
enacting s. 18(m) of the Bank of Canada Act;
has unconstitutionally abdicated its duty and function as mandated by ss. 91 (1a), (3), (14), (15), (16), (18), (19) and (20) of the Constitution Act, 1867, as well as s. 36 of the Constitution Act, 1982;
that the Minister of Finance is required to list expenditures(s) on “human capital”, including infrastructural capital expenditures relating to “human capital”, as an “asset” and not a “liability” with respect to budgetary accounting;
that the Minister of Finance is required to list, in his budgetary accounting, all revenues collected prior to the return of “tax credits” to individuals, and moreover, corporate taxpayers, with tax credits subtracted from the total revenue due, before subtracting total expenditures from total revenue, and arriving at either a budgetary “surplus” or “deficit” as required, inter alia, by s. 91(5) of the Constitution Act, 1867;
that the defendants’ (officials) are wittingly and/or unwittingly, in varying degrees, knowledge, and intent, engaged in a conspiracy, along with the BIS, FSB, an IMF, to render impotent the Bank of Canada Act, as well as Canadian sovereignty over financial, monetary, and socio-economic policy, and in fact by-pass the sovereign rule of Canada, through its Parliament, by means of banking and financial systems, which conspiracy and elements of such tortious conduct are set out, in inter alia, Hunt v. Carey Canada Inc. [1990] 2 S.C.R. 959 namely:
that the Defendants’ (officials), including and together with the BIS, engage(d) in an agreement for the use of lawful and unlawful means, and conduct, the predominant purpose of which is to cause injury to the Plaintiffs, and all other Canadians;
that the Defendants’ (officials), including and together with the BIS, engage(d), in an agreement, to use unlawful means and conduct, whose predominant purpose and conduct directed at the Plaintiffs, and all other Canadians, is to cause injury to the Plaintiffs and all other Canadians, or the Defendants’ officials should know, in the circumstances, that injury to the Plaintiffs, and all other Canadians, is likely to, and does result;

that the privative clause in s. 30.1 of the Bank of Canada Act,
A/ does not apply to the seeking of “judicial review”, by way of action or otherwise, of declaratory relief with respect to any statutory or constitutional ultra vires action and/or section of the Act, by way of declaratory relief, or any other prerogative remedy, available to hear and determine the statutory and/or constitutional limits or actions under the Act, in accordance with, inter alia, in Supreme Court of Canada’s pronouncement in Dunsmuir v. New Brunswick [2008] 1 SCR 190, nor does it apply to seeking damages for ultra vires or unconstitutional damages:and
B/ if s.30.1 of the Bank of Canada Act is interpreted to so apply as a privative clause, then it is unconstitutional and of no force and effect for breaching the Plaintiffs’ constitutional right to judicial review, as well as breaching the underlying constitutional imperatives of Rule of Law, Constitutionalism, and Federalism;

damages in the amount of:
$10, 000.00 per plaintiff; and
should the within action be certified as a class action proceeding, $1.00 (one dollar) for every Canadian citizen/resident, to be calculated based on the last population figure published in the last census, in accordance with s. 91(5) of the Constitution Act, 1867;
which damages are on account of:
the constitutional breaches pleaded in the statement of claim herein; and
the conspiracy pleaded in the statement of claim herein;
such further declaratory and/or consequential injunctive and/or prerogative order and/or relief as counsel may advise and this Honourable Court grant;
costs of this action and such further or other relief this Court deems just.

THE PARTIES
(a) the Plaintiff, Committee for Monetary and Economic Reform (hereinafter “COMER”) historically to date is an international economic “think-tank”, based in Toronto, and was established in 1970, dedicating itself to the monetary and economic reform policies of Canada and conducts research, analysis, and publication(s) on these issues. For the past 23 years it has published a monthly publication entitled COMER with articles and analysis from various authors including some of its own committee members. Its committee members have consisted of economists, academics, and published authors expert in their respective fields;
the Plaintiff, William Krehm, is and has been a member of COMER, since its inception, and has devoted much of his life to the study, research, analysis and writing on economic, monetary, and social reform, and is a published author on economic and monetary reform, included various articles, papers, as well as books as recent as 2010;
the Plaintiff, Ann Emmett, is a member of COMER, and has devoted much of her life to the study, research, analysis and writing on economic, monetary, and social reform, and is a published author on economic and monetary reform, included various articles, and papers, as recent as 2010;
the Defendant, Her Majesty the Queen, is statutorily and constitutionally liable for the acts and omissions of her officials pursuant to s. 17 of the Federal Courts Act as well as s. 24(1) and 52 of the Constitution Act, 1982;
the Defendant, the Minister of Finance, is statutorily and ultimately, with the consent of Governor-in-Council, responsible for overseeing both the Bank of Canada, as well as the Governor of the Bank of Canada, pursuant s.14 of the Bank of Canada Act, and the Minister of Finance is also, constitutionally, responsible for setting out the budgetary process, and expenditures for each session of Parliament, upon the appropriation request, through the taxing power, of Her Majesty the Queen, as set out in Her Parliamentary throne speech delivered by the Governor General for that purpose;
the Defendant, the Minister of National Revenue, is statutorily responsible for administering the Income Tax Act, and other Federal taxing statutes related to the collection of revenue through, inter alia, the taxing power, under s. 91(3) of the Constitution Act, 1867;

the Defendant, the Attorney General of Canada, is, constitutionally, the Chief Legal Officer, responsible for and defending the integrity of all legislation, as well as responding to declaratory relief with respect to legislation, including with respect to its constitutionality and required to be named as a Defendant in any action for declaratory relief.


THE FACTS

The Plaintiffs state, and the fact is, that The Bank of Canada was established as Canada’s central bank, in 1934, and nationalized in 1938,with the intended purpose of:
Asserting domestic and public control of monetary and economic control and public policy pursuant to its constitutional sources of jurisdiction contained in s. 91 and 91 A of the Constitution Act, 1867, namely:
1A. The Public Debt and Property;

3. The raising of Money by any Mode or System of Taxation;
4. The borrowing of Money on the Public Credit;

14. Currency and Coinage;

16. Savings Banks;

18. Bills of Exchange and Promissory Notes;
19. Interest;
20. Legal Tender.
and as set out in s. 18 of the Act and its predecessor provisions;
to be a vehicle to provide the Federal and Provincial governments interest-free loans for physical infrastructure as well as “human capital” expenditures (education, health, other social services); and
maintain sovereign control over credit and currency with the aim to promote the economic interests of Canada in all its aspects.

The preamble to the Bank of Canada Act, upon its enactment in 1934, as a private corporation, and as re-enacted as a Crown corporation in 1938, read as follows:
WHEREAS it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of the Dominion: Therefore, His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

The Plaintiffs state, and the fact is, that the current Bank of Canada Act, continues to reflect a public statutory duty and responsibility, as borne out by the preamble to the Act, which reads:
WHEREAS it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of Canada

The Plaintiffs state, and the fact is, that the Bank of Canada is the only “public” central bank created by statute, and accountable to the legislative and executive branches, to be found in any of the G-8 nations. All other central banks are “private” banks and are not directly created nor governed by legislation nor directly accountable nor reportable to the legislative or executive branches of the governments in the nations in which they operate.

The Plaintiffs state, and the fact is, that Policies such as interest rates, and other policies set by the Bank of Canada are set in consultation, and at times, but mostly at the direction of the “Financial Stability Board” (“FSB”), established after the 2009 “G-20” London Summit in April, 2009. The FSB is a successor of the “Financial Stability Forum” (“FSF”). The current FSB, like its predecessor, is an international body of central bankers that monitors and makes recommendations about the global financial system. The Board includes all major G-20 major economies, FSF members, and the European Commission. The FSB is based in Basel, Switzerland.

The Plaintiffs state, and the fact is, that the current FSB, like its predecessor FSF, continues to serve the same function. It consists of the major national financial authorities such as Finance Ministers, central bankers, and international financial bodies.

The Plaintiffs state, and the fact is, that the FSF was and is managed by a small secretariat, which secretariat was housed at the “Bank of International Settlements” (“BIS”) in Basel, Switzerland. It was established by the Hague Agreements, in 1930, prior to the creation of the Bank of Canada.

The Plaintiffs state, and the fact is, that the BIS is a so-called inter-governmental organization of central banks which purports to execute financial co-operation and purports to serve as a “bank for central banks”. The Plaintiffs state, and the fact is, that the BIS in fact formulates policies and dictates to central banks, including the Bank of Canada.

The Plaintiffs state, and the fact is, that Canada, through its Bank of Canada, became a member of an expanded BIS in 1974. The Plaintiffs further state, and the fact is, that between 1934 to 1974 the Bank of Canada, and Canada, was completely independent, from international private interests, with respect to its statutory duties under the Bank of Canada Act, as well as its monetary and financial policies reflected in the preamble to the Act, and as it flowed through to its economic and social policies. The Plaintiffs further state, and fact is, that since 1974, there has been a gradual, but sure, slide into the reality that the Bank of Canada and Canada’s monetary and financial policy are in fact, by and large, dictated by private foreign bank and financial interests, contrary to the Act.

The Plaintiffs state, and the fact is, that the BIS is not accountable to any government. It holds annual meetings, which are secret, and provides banking services to central banks, including the Bank of Canada.

The Plaintiffs state, and the fact is, that the BIS is effectively in control of the FSB when it comes to credit, currency, monetary and financial policies for G-20 countries, including Canada, with far-reaching economic and social impact not in the interests of either the Bank, government, nor people of Canada.

The Plaintiffs state, and the fact is, that the meetings of the BIS and FSB, their minutes, their discussions, and deliberations are secret and not available to Parliament, the executive, nor the Canadian public, notwithstanding that the Bank of Canada policies directly emanate, and are directed by these meetings.

The Plaintiffs state, and the fact is, that in its early and middle existence the Bank of Canada issued (interest-free) loans, pursuant to s. 18 (i) and (j) of the Act, and predecessor statutes, not only to the federal and provincial governments , but also directly to municipal councils. (It also printed money and bought government debt in financing the war efforts in World War II). It stopped doing so in the early 1974 in favour of loans from foreign private banks with interest, with the resulting and detrimental negative effects:
loss of the control of domestic monetary policy, including interest rate policy;
loss of control of domestic economic policy insofar as bond raters, from foreign private banks lending to Canada, would insist on the direction of Canada’s domestic economic policy under threat of downgrading Canada’s borrowing/lending worthiness;
loss of control over social policies, from foreign private banks lending to Canada would insist on the direction of Canada’s domestic social policies, under threat of downgrading Canada’s borrowing/lending worthiness;
loss of investment in human capital and infrastructure expenditures, from foreign private banks lending to Canada who would insist on direction of Canada’s domestic human capital and infrastructure expenditures under threat of downgrading Canada’s borrowing/lending worthiness;
a corresponding loss of sovereignty over decision related to banking, monetary policy, economic policy, as well as social policy;
as a result, spiralling schism between the rich and the poor in Canada with a continuing removal of the middle class and a corresponding rise in socio-economic crime related to poverty;
the bizarre, and absurd result that, while private banks can borrow money from the Bank of Canada, currently, next-to-zero interest (0.25%), Canadian citizens, through the government’s debt to private banks, and foreign private banks holding Canadian bonds and currency, relend at a higher interest rate than they borrow.

The Plaintiffs state, and the fact is, that this loss of control coincides with the Bank of Canada being a member of the BIS, FSF and FSB, without public scrutiny nor accountability with respect to the actions of the Bank of Canada, at the direction and decisions of foreign, private bodies and interests.

The Plaintiffs state, and the fact is, that in or about 1974, after Canada’s entry into the expanded BIS, an agreement or directive was reached, at which BIS , where Canada’s (central) Bank of Canada was the only publicly-created and accountable to its Parliament or Legislative body, that the central banks would not be used to create or lend-interest free money, contrary to ss. 18(i) and (j) of the Act, and its original purpose for its creation, but that governments obtain borrowed money from and through the BIS (FSF, FSB, and International Monetary Fund (“IMF”)).

The Plaintiffs state, and the fact is, that no sovereign government such as Canada, under any circumstances, should borrow money from commercial banks, at interest, when it can, instead, borrow from its own central bank interest-free, particularly when that central bank, unlike any other G-8 nation, is publicly established, mandated, owned, and accountable to Parliament, and the Minister of Finance, and was created with that purpose as one of its main functions.

The Plaintiffs state, and the fact is, that over the years, Ministers of Finance have had requests to have the Minister make interest free loan requests from the Bank of Canada, which have been refused, examples of which are:
on June 11th, 2004 the Town of Lakeshore, Ontario wrote the Minister of Finance, the Right Honourable Ralph Goodale, on Municipal Council Resolution, requesting such loans be made, which request is a document referred to in the pleadings herein;
the Minister of Finance on August 18th, 2004 refused the request and in doing so did not have regard to either the nature of the request, nor the pertinent provisions of the Bank of Canada Act, which response is a document referred to in the pleadings herein.

In his response, the Minister of Finance gave the following reasons for refusing to
do so:
that “…relying on the printing press to finance government expenditures results in inflation…”;
“….If the Bank had to borrow the funds that it loaned to the government it would have to pay whatever interest rate prevailed in the market…”
“Other nations that have relied extensively on, low-interest credit extended by central banks….have experienced very high inflation…”
“It is also inadvisable for the Bank of Canada to issue low-interest loans to provincial or municipal governments. To understand why, let us consider the two approaches that the Bank of Canada could follow if it chose to issue such loans. Suppose that the Bank of Canada did not want to change the total amount of loans it had outstanding. In this case, the Bank of Canada could rearrange its portfolio of assets to provide some loans to provinces at relatively low interest rates. However, this would reduce the Bank of Canada's profits. Since the Bank is owned by the Government of Canada, this policy would result in federal taxpayers subsidizing provincial governments.”
This has been a consistent response from the government of Canada.

The Plaintiffs state, and the fact is, that the Minister’s reasons for refusing what was requested from the Town of Lakeshore’s Council, is both financially and economically fallacious and not in accordance with his statutory duties under the Bank of Canada Act, nor his constitutional duties as Finance Minister. For example:
any (interest-free) loans granted under s. 18 (i) and (j) would have to be repaid within a very short period and therefore would not be “inflationary”;
the Bank of Canada does not have to acquire its money from commercial banks to pay back any (interest-free) loans under s. 18 (i) and (j) in that its is statutorily mandated to do so, has done so in that past, and in fact lends money to the commercial banks currently, at almost zero percent (0.25%);
that inflation would ensue is simply negated by the fact that currently, the U.S. Federal Reserve has a 0% interest rate while the Bank of Canada has a 0.25% rate with no inflating consequences, above and beyond the fact that, historically, such short-term (interest-free loans) have not, in and by themselves, caused inflation because they have to be repaid the next fiscal year; and
on the fact the some Provinces may get more (interest-free) loans than others, this is neither contrary to the underlying constitutional principle of Federalism, nor the explicit terms of s. 36 of the Constitution Act, 1982.

The Plaintiffs state, and the fact is, that the Minister’s response is financially and economically fallacious, as witnessed by the current state of affairs, such as the U.S. Federal Reserve Bank (a private central bank) printing currency and “lending” it, to the commercial banks at 0% (interest-free), while the Bank of Canada’s current lending rate is 0.25% (one quarter of one percent), above and beyond the “giving” or “bail-out” of hundreds of billions of dollars by the US and Canadian governments, as well as by the Bank of Canada, to purportedly avert a collapse of the international banking and financial systems.

The Plaintiffs further state, and the fact is, that this leads to the absurd and ultra vires result that while commercial banks obtain their money, from the Bank of Canada, at the Bank of Canada’s prime leading rate, today at 0.25%, the citizens of Canada, through the government of Canada, pay back the commercial banks, commercial lending rates which are higher than the Bank of Canada’s prime rate, on the “national debt” owed to private commercial banks, accumulated on the annual “deficit” as calculated and set down by the Minister of Finance in the annual budget, and budgetary process.

The Plaintiffs state, and the fact is, that the Minister of Finance’s refusal is purportedly based on the reasoning that such loans would increase the annual deficits and public “debt”.

The Plaintiffs state, and the fact is, that the Minister’s calculation of the public deficit and debt, as calculated and not amortised, is based on fallacious accounting methods, namely with respect to how expenditures directly relating to “human capital” are set out and amortised as “liabilities” as opposed to “assets”. The Plaintiffs state, and the fact is, that expenditures and the capital obtained through those expenditures and the capital obtained through those expenditures with respect to human capital are “assets” and not “liabilities”. The Plaintiffs further state that the Minister of Finance’s budgetary accounting is also misleading and fallacious in the calculation of “revenues” as excluding tax credits given back on collected/collectable taxes.

The Plaintiffs state, and the fact is, that it has been long recognized that investment and expenditure in human capital is the most productive investment and expenditure a government can make. This was amplified and borne out by the phenomenal success and results of the reconstruction of Germany and Japan following World War II, which was realized by a subsequent study by Theodore Shultz, a Nobel Prize Winner, from the University of Chicago, and other noted economists.

The Plaintiffs state, and the fact is, that the notion and reality of “human capital” with its origins going back to Adam Smith, boil down to:
acquired competency and knowledge of individuals, through education and experience, which in turn leads to the ability to perform labour producing economic output;
along with this “human capital” attributable to individuals are the capital expenditures to make it possible such as schools, universities, and hospitals, etc;
human capital it tied to the qualitative and quantitative progress of any nation;
human capital is developed through health, education, and quality of standard of living which in turn translates to government expenditures and investments in schools, universities, hospitals, and other public infrastructures;
human capital is always central to any analysis about the welfare, education, healthcare, and retirement of individuals, which in turn is central to a person’s life, liberty, security of the person, as well as their equality within the Canadian state.

The Plaintiffs state, and the fact is, that while “human capital” expenditure, on human beings, and human capital expenditures (such as schools, universities, hospitals), while, in Canada, may not have a “marketable” or “sellable” value on the “free”, “private” market, this does not mean, as interpreted and calculated by the Defendant Minister of Finance, that it has zero value when calculating assets and liabilities for deficit/debt purposes, nor in the manner in which these capital human expenditures assets are amortised for accounting purposes in that budgetary process.

The Plaintiffs state, and the fact is, that human capital has been viewed as a means of production through which additional investment yields additional output to the economy of any nation. This investment applies both to government and the private sector investments and expenditures.

The Plaintiffs state, and the fact is, that so long as the notion of expenditures on human capital are discarded, a critical intent and purpose of the Bank of Canada Act is rendered impotent, and equally discarded, with the results of statutory and constitutional breach(es) by the Minister of Finance and the Bank of Canada.

The Plaintiffs state, and the fact is, that BIS, FSF, FSB, and IMF were all created with the cognizant intent of keeping poorer nations “in their place”, which has now expanded to all nations in that, these financial institutions attempt, and largely succeed, to over-ride governments and constitutional orders in countries, such as Canada, over which they exert financial control.

The Plaintiffs further state, and fact is, that, so long as human capital expenditures are treated strictly as “liability” and “debt”, with no corresponding asset value, the government will not be investing in human capital infrastructure, or its own infrastructure for that matter, which is manifested for example, in government paying exorbitant rents on space for such things as Ministerial Departments, such as the Justice Department, as well as the Court themselves, where building or purchasing such assets would, in the long run, reduce those costs to a negligible fraction of the actual rental expenditures which increases the “deficit” and “debt” as (mis)calculated by the current budgetary process. The Plaintiffs state, and the fact is, that such is the case with all sales, rentals, or disposition (“privatization”) of human capital infrastructure, including government infrastructure serving Canadians.

The Plaintiffs state, and the fact is, that with respect to the private corporate context, a company’s value is routinely calculated as an aggregate of its capital assets and its “goodwill” for accounting, valuation, and income tax purposes. The “goodwill” of the company essentially boils down its “human capital”.

The Plaintiffs state, and the fact is, that the Minister of Finance’s calculation of revenue, expenditures, and surplus/deficit, on an annual basis, is also fallacious and inaccurate by the statutory slight of hand and ultra vires accounting which is effected by means of the Income Tax Act, through “tax credits”. Thus, the annual budget is presented, in simple terms, as follows:
total revenue collected (without setting out total tax credits given back to taxpayers before final payable tax is calculated);
minus government expenditures (which includes misamortization of human capital expenditures);
equals total surplus/deficit.

The Plaintiffs state, and the fact is, that on the Minister’s presentation of a budget, the calculation is, for example, set out as follows:
total revenue equals $240 billion;
minus total expenditure of $280 billion;
equals a $40 billion deficit.
When in fact, the real calculation and accounting should read, for example as follows:
total revenue collected/collectable:
$340 billion,
minus $100 billion returned to taxpayers by way of tax credits,
for a total of $240 billion in revenues;
minus total expenditures of:
$280 billion,
while not counting nor properly amortizing human capital expenditures and assets;
equals a deficit of $40 billion.

The Plaintiffs state, and the fact is, that the “deficit” amount of $40 billion, which is added to the annual debt every year, more often than not equals or constitutes the bulk of the “carrying charges” (interest/paid on the debt, to commercial banks, at market rate interest rates), while the Bank of Canada gives that money to commercial banks at the Bank of Canada’s lower lending rate, an amount depravingly lower than what the government pays them back on its annual “debt”.

The Plaintiffs state, and the fact is, that tax credits do not show up as government revenue, on the one hand, but are simply off-set against tax revenue and then a net figure reported as tax revenue, as out in paragraphs 34 and 35 above.

The Plaintiffs state, and the fact is, that on the other hand “refundable” tax credits, which are credits whereby monies are remitted to the taxpayer, as opposed to non-refundable tax credits which simply reduce the amount of a taxpayers’ taxable income, on the other hand, show up as “expenditures” or government spending in the budgetary process.

The Plaintiffs state, and the fact is, that the above “accounting method” used in the budgetary process are not in accordance with accepted accounting practices, are conceptually and logically wrong, and have the effect of perpetually making the real and actual picture of what total “revenues”, “total expenditures”, and what the annual deficits/surplus” actually is, what the annual “deficit/surplus” actually is, in any given year, and what, as a result the standing national “debt” actually is. Moreover, and more importantly, the Plaintiffs state, and fact is, that such “accounting” methods foreclose any actual or real debate, or consideration, by elected MPs, in Parliament, as the actual financial picture is not available nor disclosed to either Parliamentarians nor the Canadian public. The Plaintiffs state, and the fact is, that such accounting method breaches s. 91(5) of the Constitution Act,1867 and the duty of the Defendant(s) to maintain accurate “statistics”.

The Plaintiffs further state, and the fact is, that this “accounting” has, in the past, been heavily criticized by the Auditor General.

The Plaintiffs state, and the fact is, that the defendants’ (officials) are wittingly and/or unwittingly, in varying degrees, knowledge, and intent, engaged in a conspiracy, along with the BIS, FSB, an IMF, to render impotent the Bank of Canada Act, as well as Canadian sovereignty over financial, monetary, and socio-economic policy, and in fact by-pass the sovereign rule of Canada, through its Parliament, by means of banking and financial systems, which conspiracy and elements of such tortious conduct are set out, inter alia, Hunt v. Carey Canada Inc. [1990] 2 S.C.R. 959 namely:

that the Defendants’ (officials), including and together with the BIS, engage(d) in an agreement for the use of lawful and unlawful means, and conduct, the predominant purpose of which is to cause injury to the Plaintiffs, and all other Canadians;
that the Defendants’ (officials), including and together with the BIS, engage(d), in an agreement, to use unlawful means and conduct, whose predominant purpose and conduct directed at the Plaintiffs, and all other Canadians, is to cause injury to the Plaintiffs and all other Canadians, or the Defendants’ officials should know, in the circumstances, that injury to the Plaintiffs, and all other Canadians, is likely to, and does result;

The Plaintiffs state, and the fact is, that the proper accounting and setting out of the budgetary process, including the aggregate amount of taxes collected/collectable which is “given back” to taxpayers, and notably corporate tax payers, through tax credits, would result in the proper accountability and consequential political debate, through the elected MPs in Parliament, on the actual state of Revenues, Expenditures, Surplus/Deficit account, announced, and tabled in Parliament by the Minister of Finance, in his constitutional duty over the budgetary process.

The Plaintiffs state, and the fact is, that the “accounting” employed in the budgetary process, and an inaccurate and unavailable “statistic” of the aggregate of tax credits transferred back before calculations of net revenue, as well as the absence of the “asset” value of human capital and expenditures and infrastructure, violates s.91(5) of the Constitution Act, 1867.

The Plaintiffs state, and the fact is, that the Minister’s statutory and Parliamentary duty over the budgetary process, goes hand in hand with his statutory duty as ultimate authority, with the consent of Governor-in-Council, over the Bank Canada, under s.14 of the Bank of Canada Act, and the authority and duty imposed by s. 18 (i) and (j) , and other duties, which includes the exercise of the statutory duty to ensure interest-free loans to the government of Canada and the Provinces to execute and implement human capital expenditures which expenditures ought to be properly amortized and accounted, along with the proper accounting of tax credits, in the budgetary process, which process is constitutionally mandated, going back to the Magna Carta in the constitutional guarantee that the Crown can only imposes taxes, for the declared proposed expenditures, as set out in the throne speech, upon the consent (over the taxing power) of the House of Commons.

The Plaintiffs state, and the fact is, that s. 18(m) of the Bank of Canada Act, and its administration and operation, is unconstitutional and of no force and effect, in Parliament and the government, including the Defendant Minister of Finance, abdicating their duty to govern, and insofar, as monetary, currency and financial policies, per se, are concerned, and in turn as they affect socio-economic governance, have abdicated their constitutional duty(ies)and handed them over to those international, private entities, whose interests, and directives, are placed above the interests of Canadians, and the primacy of the Constitution of Canada, not only with respect to its specific provisions, but also with respect to the underlying constitutional imperatives.

The Plaintiffs state, and the fact is, that ultimate control and decision(s) under the Bank of Canada Act, are made by the Minister of Finance, with the approval of the Governor in Council, by “government directive” under s. 14 of the Act.

The Plaintiffs state, and the fact is, that the ultra vires (in)actions of both the Minister of Finance, and the Bank of Canada, as set out in the within statement of claim, have the result of breaching the rights of the Plaintiffs and all other Canadians, not only statutorily, but also their constitutional rights as follows:
their right to life, liberty, and security of the person under s. 7 of the Charter by a reduction, elimination, and/or fatal delay of health care services, education and other human capital expenditures and services;
their right to equality both under ss. 7 and 15 of the Charter, but also the underlying constitutional right to equality, as identified in, inter alia, the Supreme Court of Canada’s decision in Winner v. S.M.T. (Eastern) Ltd., [1951] S.C.R. 887;
the underlying constitutional principle of Federalism;
the expressed provision(s) giving effect to the underlying principles of Federalism, contained in s. 36 of the Constitution Act, 1982.
the constitutional right that statutes do not be rendered impotent in Parliament de facto abdicating its duty to govern.

The Plaintiffs state, and the fact is that as a result of the Defendants (’) officials tortious, ultra vires, and unconstitutional conduct, they have suffered damages as set out above, and in reduced services in human capital expenditures and infrastructure, as has every other Canadian citizen/resident.
The Plaintiffs state, and the fact is that as a result of the Defendants (’) officials tortious, ultra vires, and unconstitutional conduct they have also suffered damage to their normative constitutional order by irreparable harm to the constitutional supremacy required and dictated not only by s.52 Constitution Act, 1982, but also by the supremacy required and dictated by its underlying principles.


The Plaintiffs propose that this action be tried at Toronto.


Dated at Toronto this 12th day of December, 2011.

_signed_______________________________
ROCCO GALATI LAW FIRM
PROFESSIONAL CORPORATION
Rocco Galati, B.A., LL.B., LL.M.
637 College Street, Suite 203
Toronto, Ontario
M6G 1B5

TEL: (416) 536-7811
FAX: (416) 536-6801

Solicitor for the Plaintiffs

Court File No.:T-2010-11
“Proposed Class Action Proceeding”
FEDERAL COURT
B E T W E E N:

COMMITTEE FOR MONETARY
AND ECONOMIC REFORM (“COMER”), WILLIAM KREHM, AND ANN EMMETT


Plaintiffs
- and -

HER MAJESTY THE QUEEN,
THE MINISTER OF FINANCE,
THE MINISTER OF NATIONAL REVENUE, THE BANK OF CANADA,
THE ATTORNEY GENERAL OF CANADA

Defendants
____________________________________

STATEMENT OF CLAIM

(Pursuant to s.17(1) and (5) (b)Federal Courts Act, and s.24(1) of the Charter)

(Filed this ___day of December, 2011)
____________________________________

ROCCO GALATI LAW FIRM PROFESSIONAL CORPORATION
Rocco Galati, B.A., LL.B., LL.M.
637 College Street
Suite 203
Toronto, Ontario
M6G 1B5
TEL: (416) 536-7811
FAX: (416) 536-6801

Solicitor for the Plaintiffs
390918_318819048129080_114517875225866_1265696_327652566_n.jpg
(please forgive me for the graphic image, related as it may be it is not part of the press release of this lawsuit, but my own addition, advocate)
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Mon Oct 03, 2011 2:01 pm

County, Merrill Lynch reach settlement
October 1, 2011
The Maui News

WAILUKU - Maui County has reached a settlement with investment firm Merrill Lynch over the purchase of $32 million in student loan auction rate securities, Mayor Alan Arakawa announced Friday.

The county filed claims against Merrill Lynch with the Financial Industry Regulatory Authority and sued the firm in federal court in February 2010. The filings claimed that Merrill Lynch brokers continued to tout the securities as a sound investment even after it became clear they were headed for a crash. After the crash, the county was not able to sell the securities and get its money back.

Under the settlement, Merrill Lynch will buy back at full value the $32 million in securities remaining in the county's account, said Corporation Counsel Pat Wong.

Merrill Lynch also will pay the county $44,500 to compensate for the county's losses in selling $12.2 million of the securities at a discounted rate in 2009.

Each party will cover its own legal costs in the case.

"This resolution means the county can reinvest these funds short term and later use them for our capital improvement projects," Arakawa said.

Wong said Merrill Lynch's cooperation in reaching the settlement helped save taxpayers time and money.
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Mon Aug 29, 2011 8:04 pm

Section 219 of the Criminal Code states that, “Everyone is criminally negligent who (a) in doing anything, or (b) in omitting to do anything that it is his duty to do, shows wanton or reckless disregard for the lives or safety of other persons.” The provisions of Section 219 broadly state that for the purposes of the criminal negligence section, Section 219 of the Criminal Code, “duty” means a duty imposed by law.


Criminal cases have found that for criminal negligence to occur, a breach of a duty must represent a “marked” and significant departure from the standard of a reasonably prudent person in the circumstances. There must be more than mere failure to meet an OH&S or Criminal Code standard through inadvertence. There must be evidence of behaviour which shows complete disregard for, or indifference to the duty. As one court put it, there must be a finding of a “devil-may-care” attitude that shows a criminal standard has been met.

Securities Commissions in Canada meet both standards in my opinion, for the wanton and reckless manner in which they fail to protect the public interest while simultaneously selling out for loyalty, money, job security or other considerations to financial interests.
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Fri Aug 26, 2011 2:36 pm

Montreal Gazette
Two Mount Real investment victims awarded $460,053

Grocery store operators lost $232,000 when corporation collapsed in 2005

BY PAUL DELEAN, THE GAZETTE MAY 20, 2011



A couple whose retirement savings were invested in promissory notes of scandalwracked Mount Real Corp. have obtained a $460,053 judgment in Superior Court.

Grocery store operators Denis Guillemette and France Mercier and their company filed suit against the liquidators of investment manager iForum and the insurer of their former financial adviser, Yves Tardif.

They entrusted to Tardif all their savings from 1996 to 2005, with the instruction the money be invested only in secure assets.

Tardif's first investment for them was in offshore products he told them were guaranteed. Later, he added Mount Real notes, also described to them as risk-free and returning six to eight per cent annually.

They lost $232,000 when Mount Real collapsed in 2005.

Because the investments Tardif recommended and managed were neither secure nor guaranteed, and failed to preserve the clients' capital, he's professionally liable and so is the company that employed him, the plaintiffs argued.

The liquidators maintained that the alleged faults were by the adviser, not the firm. The insurer, Lloyd's, argued that Tardif had acted outside the areas of professional responsibility covered by his insurance policy.

Judge François Huot didn't see it that way.

Investment firms are responsible for the acts of their employees in the execution of their duties, he said, and none of the insurance exclusions invoked by Lloyd's applied in this instance.

Huot said the couple clearly had little investment knowledge, Tardif made little effort to get a clear picture of their needs, and his investment choices for them were concentrated, high-risk and volatile.

To the actual capital lost, he added a sum that a portfolio invested conservatively and competently would have returned over the period in question, producing a final figure of more than $460,000, jointly payable by Lloyd's and the liquidators.

pdelean@ montrealgazette.com



Read more: http://www.montrealgazette.com/news/Mou ... z1WAo0R5hM
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Re: Civil or Criminal Actions against companies or regulator

Postby admin » Fri Aug 26, 2011 2:34 pm

Montreal Gazette

Mount Real class action can go ahead: Quebec top court

BY PAUL DELEAN, THE GAZETTEAUGUST 26, 2011 3:04 PM

Janet Watson says many of the investors included in the lawsuit against Mount Real Corp. lost their life’s savings in the alleged scam and they are frustrated.

In what could be the first step toward recovery of some of the millions lost by investors in the Mount Real Corp. scandal, Quebec Superior Court Judge Jean-François Buffoni this week okayed a request to file a class-action suit for damages on behalf of 1,600 investors left holding an estimated $130 million of worthless promissory notes when the company was shut down in 2005. The suit targets former Mount Real executives Lino Matteo and Paul D’Andrea, the three accounting firms that successively verified the company’s books from 1993 to 2004 (Deloitte & Touche, BDO Dunwoody and Schwartz Levitsky Feldman), B2B Trust and Services Financiers Penson Canada Inc.
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