[phpBB Debug] PHP Notice: in file /viewtopic.php on line 1002: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected the timezone 'UTC' for now, but please set date.timezone to select your timezone.
[phpBB Debug] PHP Notice: in file /viewtopic.php on line 1002: getdate(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected the timezone 'UTC' for now, but please set date.timezone to select your timezone.
GET YOUR MONEY BACK! Misconduct and malpractice. Investment industry "best and worst practices". Information to improve public protection. Expert witness services for industry and investors. Forensic investment analysis. • View topic - Do the RCMP get their man if he is white collar? Nope.

Do the RCMP get their man if he is white collar? Nope.

Index of forum topics, talk to us.

Corruption is rampant

Postby Stan » Sun Dec 04, 2005 9:58 pm

A "Guest" above provides the following quote:

“Corruption isn’t a natural disaster: it is the cold, calculated theft of opportunity from the men, women and children who are least able to protect themselves,” said David Nussbaum, TI’s chief executive. ”Leaders must go beyond lip service and make good on their promises to provide the commitment and resources to improve governance, transparency and accountability.”

This is the heart of the issue retail investors face. It exists in all industries but seems systemic in the financial services industry because of the amount of money at stake.

SIPA published a report in February 2004 with the intent to illustrate the extent of the problem of investors being robbed of their savings due to willful wrongdoing by the financial services industry. The report had some impact. It apparently precipitated David Brown to organize the OSC Investor Town Hall Event. This event allowed investor advocates to speak out and with a crowd of 500 it was apparent there is discontent with the complete lack of investor protection.

Although there are many issues we need to focus on the fundamental issues and not get distracted by industry declarations of reefing rules, developing improved guidelines and recommended practices, and mouthing that investor protection is important.

The fact is the present regulatory system is incapable of providing investor protection. Seniors and widows are being robbed at an alarming rate.

Investor advocates need to evolve a strategy for pursuing important issues in an organized fashion if ever headway can be made.

There have been many initiatives but they tend to fall by the wayside. The Internet should be a powerful tool to empower investors.

More and more investors are speaking out. We need to speak out in concert.

Stan Buell
Small Investor Protection Association
Stan
 

Postby admin » Fri Dec 02, 2005 10:56 am

I just had my hands on a Calgary Herald article about Alberta Liberal Leader Kevin Taft getting RCMP IMET to investigate the Alberta Securities Commission. In it the RCMP spokesman is on record as saying, "we have an obligation to investigate any credible complaint".

How does that jive with Diane's post above where the RCMP put in writing that they would "only" investigate upon being requested by certain parties or bodies?

It strikes me as talking out of both sides of ones face, depending on whether they wanted to do the job, or escape from doing the job they are charged with.

It leaves me with an unsettled feeling and smacks of a lack of accountability.
admin
Site Admin
 
Posts: 2823
Joined: Fri May 06, 2005 9:05 am
Location: alberta

RCMP can only investigate these guys if they ask them to ...

Postby Guest » Thu Dec 01, 2005 11:03 pm

At least in ALberta, the Leader of the Opposition made enough noise to get RCMP IMET to investigate the ASC - following up on the AGs findings.

What do we do in ON - where Craig Hannaford, Superintendent of IMET said in writing no less:

"...IMET...has been specifically designed to focus on recent large capital market criminal infractions. We have been resourced in order to bring significant resources to bear on individual cases."

They must be off and running on the Trust tipping case by now huh???? Ya think???? Mr. Goodale??????

Hannaford charged forward, "Our cases generally come from referrals from regulators or SRO's...Unless matters are referred to the RCMP IMET through one of our participating agencies (OSC, IDA, MFDA, MRS), it will not be considered for investigation."

I can see it now, right after the OSC orders in the AG, they order in IMET to follow-up!? IMET investigate the OSC or its SROs??? Can't you just see that order coming down - get those tampered files on the public record now Craig!
Guest
 

Postby Guest » Fri Nov 18, 2005 9:54 am

Biovail should be added to the list of market manipulations. Investors were told their "once-a-day" pill was patent protected, now that doesn't appear to be the case. The company's founder is being investigated for insider trading.
Guest
 

Postby Guest » Thu Oct 27, 2005 11:54 pm

In Canada, fraud cases can drag on
Thursday, October 27, 2005

By Mark Heinzl, The Wall Street Journal

TORONTO -- Canadian authorities say they want to clamp down on corporate crime. They seem to be having a hard time.

Take Livent Inc. In 1998 -- before Enron, WorldCom, Tyco International, Adelphia and other high-profile U.S. accounting scandals unfolded -- the Toronto-based producer of "Phantom of the Opera" and other Broadway shows went into a tailspin. Its U.S.-listed shares became worthless. The company, under new U.S. management, accused founder Garth Drabinsky and other executives of a fraud that disguised the company's financial problems for years.

When might Mr. Drabinsky go on trial? At this point, probably not until early 2007 -- nearly a decade after Livent fell apart.

Mr. Drabinsky has maintained his innocence. Staying in Canada, he has avoided trial on criminal charges brought in 1998 by federal prosecutors in New York, as U.S. authorities deferred to their Canadian counterparts on the case. Some four years after the U.S. charges, Canadian police charged Mr. Drabinsky and other Livent officials with various counts of fraud. Some of those charges were quietly dropped earlier this year; a trial on the remaining counts is slated to begin in March 2007.

The "right to mount a proper defense" can stretch out a "difficult, complex fraud" case, said a spokesman for the attorney general of Ontario.

About two years ago, Canadian authorities vowed to get tougher on alleged corporate wrongdoers. While some recent moves show stiffer resolve, critics say cases are still taking too long, if they are pursued at all, and penalties remain light by U.S. standards.

Action against corporate crime in Canada is "maybe a little bit better, but it's not very noticeable," said Stephen Jarislowsky, a veteran money manager in Montreal who is active in promoting better corporate governance. He said the country's splintered group of 13 securities regulators -- one for each province and territory -- is ineffective and should be consolidated into one national regulator.

Authorities haven't pressed hard enough in several high-profile scandals, he said, including Livent, the Bre-X Minerals gold scam and more recently, alleged fraud at Hollinger International Inc.

The Hollinger case is "a critical test for Canadian authorities as to the resolve for more aggressive enforcement," said Jacob Frenkel, formerly an assistant district attorney in New Orleans and senior counsel in the Securities and Exchange Commission's enforcement division.

Under pressure from U.S. shareholders, the Chicago-based publishing company nearly two years ago forced former top executives Conrad Black and David Radler to step down, amid allegations that they siphoned tens of millions of dollars from the company, often through entities they control in Canada, where they both live. The two face SEC civil charges, and Mr. Radler has pleaded guilty to a mail-fraud charge brought by federal prosecutors in Chicago. He has agreed to serve 29 months in prison.

Mr. Black denies wrongdoing. Prosecutors this month froze $8.9 million of his proceeds from a recent real-estate transaction, a move Mr. Black is challenging. The criminal investigation into Hollinger continues and could lead to more charges.

The Ontario Securities Commission, Canada's largest securities regulator, meanwhile, in March accused Mr. Black, Mr. Radler and others of improperly diverting funds. The two men face fines or securities-trading bans if they are found guilty of the civil charges at a hearing set to start next month. But Canada's Royal Canadian Mounted Police, who oversee criminal investigations, say their involvement in Hollinger is limited to offering to help U.S. officials.

It is typical for one country's law-enforcement officials to take the lead on an international case, said RCMP Superintendent Craig Hannaford, who heads the Toronto branch of the RCMP's corporate-crime operations. He said Canada has a "totally different legal system" compared with the U.S., which has a "robust plea-bargaining system," federal sentencing guidelines and other mechanisms that help put corporate criminals behind bars.

Even Canada's central bank has said the country has an image problem. Bank of Canada governor David Dodge last December said some international finance players see Canada as the "Wild West."

Canadian police haven't charged anyone in the Bre-X case. The Canadian company claimed a giant gold find in the Indonesian jungle. The find was exposed as an elaborate scam in 1997, and several billion dollars of market value evaporated.

The Ontario Securities Commission filed civil charges against Bre-X Chairman John Felderhof for insider trading in connection with his sale of 84 million Canadian dollars, or about US$71 million, in Bre-X stock in the mid-1990s.

Eight years after Bre-X was exposed, Mr. Felderhof's often-delayed trial plods on in Toronto, and after nearly five years a verdict is likely still a year away. Mr. Felderhof, who has made only a brief appearance in court, mainly spends his time at his seaside estate in the Cayman Islands or in Indonesia, his lawyer said.

The RCMP now is "working very hard" on some high-profile corporate cases, Mr. Hannaford said, citing previously reported investigations of accounting issues at Royal Group Technologies Ltd. and Nortel Networks Corp. Both companies said they are cooperating with the investigations.

Canada has moved to strengthen fraud laws, Mr. Hannaford added, citing a recent increase in the maximum prison sentence for fraud to 14 years from 10.

The OSC is seeking a jail term of three to five years for Andrew Rankin, a former RBC Dominion Securities managing director, after an Ontario court judge found him guilty of 10 counts of illegally tipping a friend about takeover deals. It would be an unusually harsh sentence. The longest jail term on record for insider trading in Canada is six months.
Guest
 

RCMP IMET CASES FROM THE INDUSTRY REGULATORS ONLY

Postby urquhart » Tue Oct 25, 2005 6:16 pm

We need to get Ottawa to change the mandate and procedures of the RCMP IMET. The following letter to an XXX'd investor advocate says that RCMP IMET will not do cases of white collar fraud submitted directly to it by investor victims. It says that all its cases for investigation are referrals from the OSC, IDA, MFDA, and MRS. THe author admitted at last year's OSC Facing the Issues Conference that the RCMP had been referred four cases in its history. The OSC, IDA, MFDA and MRS have representatives on the regional RCMP IMET Committees, which are reviewing the priorities of the RCMP IMET. Needless to say any malfeasance by senior people at the investment banks and mutual fund companies is highly unlikely to be on the agenda of the RCMP IMET Committee. So we cannot expect the RCMP to have much impact on deterence of $ billion scams within the conspiracy of silence in the financial industry.


----- Original Message -----
From: "Craig Hannaford" <craig.hannaford@rcmp-grc.gc.ca>
To: Mr. XXXXXXXX :
Sent: Monday, May 09, 2005 3:13 PM
Subject: Response to your recent phone call
This e-mail is in response to your recent phone call.
The IMET program has been specifically designed to focus on recent large capital market criminal infractions. We have been resourced in order to bring significant resources to bear on individual cases. That being said, we have a limited amount of cases that we take on and case selection follows an established protocol. Our investigations generally focus on issues within publicly traded companies. Thus the clear
link between our mandate and IMET devoting resources to such cases as Royal Group or Nortel. I am sure you can appreciate that the RCMP IMET must be strategic in selecting cases of this nature to work on. I should also add that nothing the RCMP does limits any other police agency (ie. OPP, Toronto Police) from conducting a fraud investigation if the alleged offence has a nexus in their jurisdiction.
Our cases generally come from referrals from regulators or SRO's and some of our larger cases have come to us in that manner. Unless the matters you are concerned about are referred to the RCMP IMET through one of our participating agencies (OSC, IDA, MFDA,MRS) it will not be considered for investigation.

Yours truly,


Supt. Craig S. Hannaford
Officer in Charge
GTA Integrated Market Enforcement Team
Royal Canadian Mounted Police
3389 Steeles Avenue East
3rd Floor
Toronto, Ontario
M2H 3S8
Office: 416-790-3202
Fax: 416-790-3203
E-mail: Craig.Hannaford@rcmp-grc.gc.ca
urquhart
 
Posts: 125
Joined: Tue Jun 14, 2005 3:43 pm
Location: Mississauga

Police should patrol trading floors

Postby BMW » Tue Oct 25, 2005 5:40 pm

I'd like to see the police, perhaps the RCMPs IMETs unit patrol the brokerage houses or trading floors on Bay Street like they do elsewhere in the city. It was encouraging when they had their mobile unit parked outside the Bank of Nova Scotia. Commercial crime officers should be able to question employees who deal in securities like regular cops do when they suspect theft, assault etc.
BMW
 

Postby Guest » Tue Oct 25, 2005 8:55 am

Think about it. Our American neighbours could actually use our own "Grown-in-Canada" soft wood lumber stumpage subsidies to create, build, ignite and deliberately burn a fire wall separation between Canada and the U.S. when it comes to our Canadian financial companies:
banks, insurance companies, fund companies, etc., from exporting their inappropriate "Made-in-Canada" business practices plus operating their U.S. subsidiaries [ did you know that our Royal Bank of Canada has quietly become the 8th largest U.S. securities dealer !! ], etc., plus IMAGINE what will happen IF their dual listings on the NYSE / NASDAQ , etc., exchanges are cancelled?

Subject: TheStar.com 10-22-05 - Protect yourself against fund fraud Fundco financial assault


This is an interesting and controversial article. Note that in fact some of Canada's biggest bank-owned brokerages e.g. TD Waterhouse and independent fundcos e.g. Investors Group were in fact deeply involved in the market timing scandal.

U.S. headquartered Fidelity, the world's largest fundco played it straight.

Fifteen Canadian firms, including bank-owned fundcos, were never sanctioned by the OSC and have never come forward and admitted their breaches of fiduciary duty.
The length of a manager's track record, and how well the funds have fared, have proven to be of no value in predicting scandalous behaviour. Remember too that issues like related party dealings and soft dollars are still open issues. I won't even mention excessive fees,deceptive ads or abusive sales practices.
CIBC, a trusted Canadian Bank paid one of the largest settlements in history [ $2.4 billion ] in the Enron scam and were found guilty of aiding and abetting US hedge funds in their [ market timing ] pillaging of US mutual funds.
Royal [ Bank ] has set aside hundreds of [ $500 ] millions of dollars.
BNS appears to be ensnared in the Royal Group fraud and aggravated law enforcement so much that [ RCMP ] IMET had to prosecute a search warrant [ on Scotia Plaza ].
Sun Life owns MFS funds in Boston -- ( and Sun Life owns 34% of infamous CI Funds [ which in turn owns 100% of Assante's closets that are full of skeletons ] ) -- MFS one of the U.S. mutfunds severely sanctioned by the SEC and NY-AG Eliot Spitzer for abusing investors.

Every one of our major financial institutions is in hot water, albeit primarily with U.S. litigators and regulators. The biggest crooks it turns out are the big guys. Canadians are too complacent and ultra-ineffective in lobbying Govt.

No new rules on market timing are in place and fund governance regulations remain elusive due to intensive industry lobbying.

Some ways to protect small investors - set up an investor protection fund for fundcos, install real governance boards and use civil action when required.


Also, force more disclosure and commentary on unusual transactions esp. with related parties and actually enforce securities law with a stick rather than a [ nod, nod, wink, wink ] wrist slap.

AND get rid of [ the abused investor ] debilitating [ 2 year ] Limitation periods [ to file an action ] in every province.

Right now as things stand the entire system is hard wired against the small investor -- something has to change.

In 2004, 85% of investors claims were denied by OBSI and I expect the balance got cents on the dollar.

Trust everyone but shuffle the deck.



Oct. 22, 2005. 01:00 AM

Protect yourself against fund fraud



Some risks for mutual fund investors are acceptable. Some are not. Falling into the latter category are embezzlement and fraud.

No one likes it when the price of a fund goes down because of what's happening in the stock or bond markets. But funds don't go straight up, and losses over shorter periods can, we hope, be overcome.

Far less likely, but nonetheless a small possibility, is the nightmare of mutual fund assets disappearing from a company because of criminal activity. This type of loss isn't supposed to happen, according to conventional wisdom over the years from fund-industry participants and the Investment Funds Institute of Canada. As the institute notes on its website, the regulatory regime for mutual funds has checks and balances. Assets the fund firm manages for investors must be held by a custodian. In theory, the fund manager can't get its, his or her hands on the securities and cash.

Annual audited financial statements are also intended to safeguard investors. Still, according to the allegations coming out of Quebec in three fund-company investigations, a lot can happen between audits.

The largest case involves Norbourg Asset Management Inc. of Montreal, assets of which the Quebec securities regulator has frozen because of its suspicions that about $130 million in mutual fund assets has gone missing. Also suspended because of suspected misappropriation of assets are two smaller Montreal-based fund-management firms, @rgentum Management and Research Corp. and Les conseillers en valeurs Planiges Inc. None of the allegations have been proven.

If the regulators or the courts can't recover missing assets, investors are out of luck. No investor protection fund exists to compensate victims of fund-company fraud or embezzlement.

For that reason, the three Quebec investigations, along with others such as the scandal over the Toronto-based Portus group of companies, hedge funds from which were not offered by prospectus, have sparked renewed demands for an investor protection fund that covers fund-company malfeasance.

But if the recent comments by newly appointed institute chair Brenda Vince are any indication, the fund industry remains cool to the idea. Speaking at the institute's annual convention last month, Vince said she believes the majority of responsible, well run fund companies should not be asked to pay for the sins of the few.

Vince, who is president of RBC Asset Management Inc., favours increased regulation, including higher capital requirements. She says personal liability and having capital at risk can serve as considerable deterrents.


For individual investors in mutual funds offered by prospectus, the risk of loss as a result of fraud is small.

The firms now under investigation in Quebec are tiny players that together represent substantially less than 1 per cent of the industry's assets under management.

Still, it's fair for investors to ask, how can I ensure that I'm dealing with a reputable fund firm that's not going to abscond with my money?

While rankings and ratings for fund performance are available, there are no equivalent measures for integrity and honesty. Investors themselves have to judge fund firms and the people behind them.

The size of a fund firm and its parent, and how much the subsidiary manages, might provide some comfort. None of the current fraud cases, for instance, involves big brand-name funds sponsored by a major bank or insurance company, nor a large, independent Canadian company, nor the Canadian subsidiary of a major foreign money-management firm.

But, in fairness to entrepreneurial money managers who have gone out on their own and served their clients well, company size and asset size ought not to be determining factors.

The length of a manager's track record, and how well the funds have fared, are much more relevant and meaningful.

Come to think of it, if you choose managers who have been superior long-term performers, you'll probably be doing an excellent job of screening out any crooks.


--------------------------------------------------------------------------------
Rudy Luukko is investment funds editor of Morningstar Canada.
Guest
 

Postby Guest » Mon Oct 24, 2005 3:37 pm

good comment. I think it was in one of Jon Chevereau's National Post articles where the head of the RCMP was quoted as saying they had the resources to investigate only 5% of the commercial crime reported to them.

It would be very helpful if they were given proper resources to do the job of law enforcement. The regulators do nothing to assist, and then find their next job inside the industry it seems.

I look forward to the day when we have enough police resources to ensure Canada is not the fraud capital of the western world.
Guest
 

Do the RCMP get their man if he is white collar?

Postby Dave CP » Fri Oct 21, 2005 2:15 pm

I don't think sending your complaints to the advertising media and industry regulator OSC is as affective as lobbying the RCMP IMETs unit for change. The Integrated Market Enforcement Team is responsible for gathering intelligence. Their mandate is to protect investors and
disrupt criminal activity in Canadian Capital Markets. They accomplish the task partly by sharing information with investors. The times I've been in contact with them I was impressed by the officers willingness to listen. I still want to see more action though like the raids on BNS.
Dave CP
 

Postby Guest » Wed Oct 19, 2005 7:32 pm

Marked increase in the perception of corruption in Canada


Tuesday, October 18, 2005


By James Langton, Investment Executive



A global survey of corruption singles out Canada as suffering from an increased perception that it’s plagued by corruption.

The survey, published today by Transparency International, found that more than two-thirds of the 159 nations surveyed in its 2005 Corruption Perceptions Index scored less than five out of 10, indicating serious levels of corruption in a majority of the countries surveyed.

Canada ranks relatively highly, at number 14, ahead of countries such as Germany, the U.S., and Japan. Nevertheless, TI warns that the country’s image is heading in the wrong direction.

New long-term analysis of the CPI carried out by Prof. Dr. Johann Graf Lambsdorff shows that the perception of corruption has decreased significantly in lower-income countries such as Estonia, Colombia and Bulgaria over the past decade. “In the case of higher-income countries such as Canada and Ireland, however, there has been a marked increase in the perception of corruption over the past 10 years,” it reports. “Showing that even wealthy, high-scoring countries must work to maintain a climate of integrity.”

“Similarly, the responsibility in the fight against corruption does not fall solely on lower-income countries. Wealthier countries, apart from facing numerous corruption cases within their own borders, must share the burden by ensuring that their companies are not involved in corrupt practices abroad,” it notes. “Offenders must be prosecuted and debarred from public bidding. The opportunity for ensuring sustainable progress also lies in the hands of the World Trade Organization, which needs to actively promote transparency and anti-corruption in global trade.”

“The lessons are clear: risk factors such as government secrecy, inappropriate influence of elite groups and distorted political finance apply to both wealthy and poorer countries, and no rich country is immune to the scourge of corruption,” TI adds.

“Corruption is a major cause of poverty as well as a barrier to overcoming it,” said Transparency International chairman Peter Eigen. “The two scourges feed off each other, locking their populations in a cycle of misery. Corruption must be vigorously addressed if aid is to make a real difference in freeing people from poverty.”

Despite progress on many fronts, including the imminent entry into force of the UN Convention against Corruption, 70 countries - nearly half of those included in the Index - scored less than three on the CPI, indicating a severe corruption problem. Among the countries included in the Index, corruption is perceived as most rampant in Chad, Bangladesh, Turkmenistan, Myanmar and Haiti – also among the poorest countries in the world.

TI says that corruption undermines the economic growth and sustainable development that would free millions from the poverty trap. Fighting corruption must be central to plans to increase resources to achieve the goals, whether via donor aid or in-country domestic action, it insists. Also, foreign investment is lower in countries perceived to be corrupt, which further thwarts their chance to prosper.

<snip>

“Corruption isn’t a natural disaster: it is the cold, calculated theft of opportunity from the men, women and children who are least able to protect themselves,” said David Nussbaum, TI’s chief executive. ”Leaders must go beyond lip service and make good on their promises to provide the commitment and resources to improve governance, transparency and accountability.”

An increase in perceived corruption from 2004 to 2005 can be measured in countries such as Costa Rica, Gabon, Nepal, Papua New Guinea, Russia, Seychelles, Sri Lanka, Suriname, Trinidad & Tobago and Uruguay. Conversely, a number of countries and territories show noteworthy improvements – a decline in perceptions of corruption – over the past year, including Estonia, France, Hong Kong, Japan, Jordan, Kazakhstan, Nigeria, Qatar, Taiwan and Turkey.
Guest
 

I have finally figured someting out

Postby Guest » Fri Sep 30, 2005 11:31 am

I am beginning to figure out (I think) the cause of what investor advocates find offensive inside the investment industry. The underlying causes are not limited to this industry only, but can be seen in many, many ethical failures. The tainted blood scnadal, accounting scandals, medical, phamacuetical, nuclear power, you name it. Lets take a look at the common themes.

Three essential ingredients and three separate crimes are typically found.

One ingredient is corporate and or personal greed. Found everywhere. Not difficult.

Second ingredient is beauracratic indifference. Workers etc., who just dont care enough to do their jobs correctly. Also fairly prevalent.

Third ingredient is regulatory failure, which may be related to number two above, but more likely is not just laziness. Most regulators find it difficult, if not impossible to admit large systemic problems exist under thier watch, so they become co-conspirators instead. They become part of the problem instead of part of the solution.

The first crime is the actual abuse of trust, whether it be a financial advisor taking advantage of his client for personal gain,, child abuse, malpractice, embezlement, bribe, whatever.

The second crime is the cover up, involving individuals of considerable power or influence who were not involved personally in the initial wrongdoing, but whose sense of loyalty is stronger than their attachment to honesty and openness. Since exaggerated loyalty may be the very quality that gives such people power and influence (think Liberal party hacks and Adscam), it is hard to know what can be done about loyalty as self serving weakness.

The third crime is the hoodwinking of police and the public with false assurances that all is well.

(last three crimes taken from the book "DARK AGE AHEAD", by Jane Jacobs, from recommended reading list of Nick Murray, one of the self styled gurus of investment advisor behavior. The book points to the "failure of professionals to self regulate properly" as one of the five pandemic symptoms of a society that is in dangerous decline
Guest
 

Postby admin » Thu Sep 15, 2005 12:49 am

What is wrong with this picture?
NEWS RELEASE
[Print]
2005/51September 14, 2005
White Rock mutual fund salesperson who committed fraud in stealing clients’ money hit with maximum $250,000 penalty
Vancouver -- The British Columbia Securities Commission has issued the maximum penalty it can against a former White Rock, B.C.-based mutual fund salesperson who defrauded his clients of about $1.6-million during a six-year period.
Paul Robert Maudsley has been banned for life from trading securities, being a director or officer, and engaging in investor relations. He must also pay a $250,000 administrative penalty – the maximum fine the commission can impose on an individual -- as well as almost $60,000 in costs related to the hearing.
A commission panel found that Maudsley and his company, Shaylor Management Ltd. violated the Securities Act in committing fraud when Maudsley convinced 23 clients to redeem about $1.6-million in mutual fund holdings to invest in other securities. Maudsley did not invest any of the money, instead taking the clients’ money for his own use to fund his personal and lifestyle expenses, including, a self-admitted substance abuse problem described by a witness as “his cocaine and gambling habit and alcohol addiction.”
The panel also found that Maudsley failed to deal fairly, honestly and in good faith with his clients – nearly half of whom were elderly or vulnerable.
“He simply took their money, or caused Shaylor to do so – about as stark an instance of deceit as there can be,” said the panel.
“The evidence provides clear and convincing proof that Maudsley had subjective knowledge of the deceit, and that it would result in the deprivation of others.”
Maudsley committed his violations when he was a mutual fund salesperson at Investors Group Inc.’s South Surrey Regional Office in White Rock between 1996 and 2003. He was fired from the firm on Mar. 3, 2003.
The commission panel also permanently cease-traded Shaylor’s securities in the sanctions decision. The firm is permanently banned from trading securities and must also pay an administrative penalty of $500,000 -- the maximum that the commission can order against it. Shaylor must also pay costs of the hearing.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website www.bcsc.bc.ca by typing in the search box, Paul Robert Maudsley or 2005 BCSECCOM 577. If you have questions, contact Andrew Poon, Media Relations, 604-899-6880.
© BC Securities Commission 2004

Here is what Ken K thinks is wrong:

Here's the point. He stole a lot of money and doesn't spend even 5 minutes in jail. Note the low limits on fines in BC.His employer isn't even sanctioned or given a wrist slap fine.Investors don't get a nickle back. Soon , abusive provincial limitations Acts will swing into action putting tight time pressures on investors for civil action.This is the kind of regulatory enforcement regime that simply does nothing to protect investors.ken kivenko http://www.bcsc.bc.ca/release.asp?id=2748

Here is what Larry thinks is wrong:
These Securities Commissions do nothing for investors, and white collar criminals have to practically kill their clients to get any sanctions whatsoever. The crimes described above are so very very obvious that third grade children could do an improved job of sanctioning them and providing some recourse to investors. Where the commissions fail is in the more subtle, more cleverly crafted methods of duping clients of their moneys, by "trained, trusted and professional", salespeople who take advantage of the clients faith and trust.
The securities commissions cannot even make a dent into the various frauds, deceits, misrepresentations in 99% of cases. I feel they do not even have the will to do so, since it would reflect so badly on how they have run the system under their watch. It seems they can only stand by and watch now, while the smarter or more ethical among them are leaving.
Even if they had the ethics to address white collar frauds, they have nowhere near the strength. the RCMP is on record as saying they only have manpower to investigate 5% of the commercial crime reported to them, and I suspect the Securities Commissions are similar.
It is still "buyer beware" for clients and white collar crime heaven for fraudsters here in Canada.
admin
Site Admin
 
Posts: 2823
Joined: Fri May 06, 2005 9:05 am
Location: alberta

Crime pays in Canada, Nobody Cares

Postby admin » Mon Aug 15, 2005 1:21 pm

Law enforcement and investor protection in Canada – a sorry tale

We received this insightful and articulate email after running a few stories on financial assault and the minimal penalties, if any, imposed on those responsible:

“ SROs are NOT in the restitution business. And the RCMP- IMET according to [Craig] Hannaford usually only acts on direction of the SCs [Securities Commissions]. The RCMP have testified before the Senate Banking Committee that they will have to refuse cases, as will other forces because white collar crime is epidemic. The Force itself can't even handle most of the money laundering cases reported to it by Fintrac.

Why do people only wake up when their ox has been gored? This is the kind of stuff we investor advocates have been screaming about for over a decade - nobody listens til it's too late.

The RCMP couldn't even bust Bre-X....the only chance people have is civil court (cents on the dollar settlements years down the road - if they "win"). IDA arbitration and OBSI intervention are a sad joke. David Dodge of the Bank of Canada told the Canadian Club in TO recently that the Yanks think it is the “Wild West” up here. I can tell you the Brits have an even lower opinion. With all the news that has been in the media and online from Bre-X to Portus, plus all the lobbying by advocates - media, websites, public tribunals, etc., etc., I sometimes wonder if people live in caves....

The police have to prove "intent to defraud" to even get a case past Crown Counsel and into court. The brokerages and Mutual Fund companies always cut the[ sales] reps adrift and deny all responsibility. Fines levied by the regulators are rarely collected because all the perpetrator has to do is leave the industry - many have simply moved to the U.S. and started all over again. Etc., etc........” - Jim Roache , Investor Advocate
The deck is stacked against small investors. Makes you think twice about investing in Canada, eh.
admin
Site Admin
 
Posts: 2823
Joined: Fri May 06, 2005 9:05 am
Location: alberta

Postby admin » Tue Jun 28, 2005 10:23 pm

White Collar Crime is a Crime of Violence. Diane Francis
“..White-collar crime is a violent act. By my rough account, there have been at least half a dozen suicides by investors who are victimized and lost everything as a result of the Bre-X debacle. That's just the ones that came to my attention during a book research. How many people in other mining outfits lost their savings? How many marriages fail because of this? How many people lost their health because of the fraud? Or their houses and lifestyles? How many children's lives were affected? White-collar crime is violent because it mugs lives, livelihoods and self-esteem. That's why the American judges are correct in imposing tough sentences on these people. And yet no one has been charged or even investigated in Canada for Bre-X because the case would be too expensive for the cash-starved Mounties.... ” Source Diane Francis, “White collar crooks: U.S. hits them hard”, Financial Post, March 22, 2005 pgFP2[the Bre-X scandal cost investors an estimated $ 9 billion]
admin
Site Admin
 
Posts: 2823
Joined: Fri May 06, 2005 9:05 am
Location: alberta

PreviousNext

Return to Click here to view forums

Who is online

Users browsing this forum: No registered users and 2 guests

cron