Financial Abuse by "Trusted Professionals"

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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Wed Nov 28, 2012 10:32 am

Screen Shot 2012-11-28 at 10.30.40 AM.png
The 'financial advice' industry, with very few exceptions, is a scam. In order to keep their jobs and make money for themselves and their firms, 'financial advisors' must charge their clients a lot of money ... and over time that will badly hurt the client. The very people that are supposed to be helping you reach your dreams are destroying your dreams with their high fees. In fact, 95% of 'financial advisors' are really brokers working for brokerage firms and banks, not you.

Some financial advisors have good intentions and some don't. But intentions don't matter when we are talking about your financial future. Your money is what matters. And know that the greater your trust in your financial advisor, the greater the chance that you are being hurt financially. Even if your 'financial advisor' is a friend or family member.

.......see more at http://www.saveyournestegg.com/scam.html

Thanks for Ken at http://www.canadianfundwatch.com for suggesting this post
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Fri Oct 05, 2012 1:23 pm

Screen Shot 2012-10-05 at 2.18.31 PM.png


A great article about "food fraud" by an ag expert.

Must reading due to the same frauds occur as almost "standard industry practice" in the investment selling business. Misrepresentation, mislabeling, lies by omission, anything to put lipstick on the pig and get her to market..............

http://issuu.com/fbcpublishing/docs/cct120611/29

Food fraud // July 2012
http://brendaschoepp.com/writing/
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Wed Jul 18, 2012 9:11 am

Screen shot 2012-07-18 at 10.10.22 AM.png


In any area of commerce other than the securities industry, words like "honesty", "integrity" and "fair dealing" leave no room for confusion. Nor do representations that "our clients interest always come first". Or "we are dedicated to complying fully with the letter and spirit of the laws, rules and ethical principles that govern us." When we hear or read those words, we take comfort in the high, impeccable standards of those in whom we are asked to trust.

According to a shareholders class action lawsuit filed in the United States District Court for the Southern District of New York (In re Goldman Sachs Group, Inc. Securities Litigation: Master File No. 1:10-cv-03461), Goldman Sachs made those representations and others. It did so in response to the fallout from large transactions in synthetic CDO's. The complaint alleges that Goldman's annual reports repeatedly touted "The Goldman Sachs Business Principles," which included the following statements:

1. "Our clients' interests always come first. Our experience shows that if we serve our clients well, our own success will follow."
2. "We are dedicated to complying fully with the letter and spirit of the laws, rules and ethical principles that govern us. Our continued success depends upon unswerving adherence to this standard."
3. "Integrity and honesty are at the heart of our business."

The complaint alleged that Goldman Sachs' conduct in certain CDO transactions made these statements materially false and misleading.

Goldman sought to have the complaint dismissed on various legal grounds. Of particular interest to me was its position concerning the statements about its core values of honesty and integrity. Here's the view expressed by its lawyers, in their memorandum urging the Court to dismiss these claims:

"Further, the vast majority of the supposed "misstatements" alleged in the Complaint -- e.g., regarding the firm's "integrity" and "honesty" -- are nothing more than classic "puffery" or statements of opinion that, under well-settled law, cannot give rise to a securities fraud claim."
For those not well-versed in legal-speak, "puffery" has been described by one legal scholar as vague statements of corporate optimism that is often characterized as "so obviously unimportant to a reasonable investor that reasonable minds could not differ."

So, does Goldman's legal position mean that investors should not rely on statements concerning its core values? Not according to U.S. District Judge Paul A. Crotty, who rejected these claims in an opinion filed June 21, 2012. Judge Crotty can hardly be accused of being an activist judge with liberal credentials. He was appointed to the bench by George W. Bush and began active service on April 15, 2005.

Judge Crotty characterized Goldman's legal position as "Orwellian." In a particularly scathing note, he observed "[I]f Goldman's claim of "honesty" and "integrity" are simply puffery, the world of finance may be in more trouble than we recognize."

That is precisely the issue.

Investors need to understand they are in "more trouble" than they realize. Many brokers and advisors show little constraint in making statements they cannot possibly support. The daily grist of these "financial experts" is that they can help you secure your retirement by finding fund managers with investment skill who can "beat the markets." They don't disclose the compelling, peer-reviewed data indicating that evidence of this "skill" is exceedingly rare. In those few who appear to have it, after management fees and trading costs, even they are unlikely to beat their benchmark. The nail in the coffin is that this elusive skill does not persist, and relatively few top performing fund managers are able to repeat their outperformance in the following year, much less over the long term.

I guess it's all just "puffery."

Dan Solin is a senior vice president of Index Funds Advisors. He is the New York Times bestselling author of The Smartest Investment Book You'll Ever Read, The Smartest 401(k) Book You'll Ever Read, The Smartest Retirement Book You'll Ever Read, and The Smartest Portfolio You'll Ever Own. His new book is The Smartest Money Book You'll Ever Read. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

http://www.huffingtonpost.com/dan-solin ... 40245.html
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Sun Oct 30, 2011 1:58 am

Why the 'Occupy' movement? A true story
Canada NewsWire

EDMUNDSTON, NB, Oct. 27, 2011

Letter to the editor

EDMUNDSTON, NB, Oct. 27, 2011 /CNW/ - I worked at the Fraser Papers' mill in Edmundston, New Brunswick for 36 years. On each pay cheque, I contributed a portion of my wages to the pension fund, which I believed would be a guaranteed investment.

In 2009, with talks of a potential bankruptcy at Fraser, I decided to withdraw my pension plan with the aim of securing my assets. I signed documents and withdrew the first pension payment that I was entitled to. Unfortunately, I was able to benefit from my full pension for only three months. Having given 36 years of my life to Fraser Papers, I got a full pension for three months. In other words, one month of pension for every 10 years of service!

In October 2009, I saw my benefits thin out by 35.4%. No longer being able to live within my means, I had to return on the job market. My search for a job was quite difficult since I have health issues. During a five-month period, I sent 134 résumés and got three part time jobs at minimum wage.

Given that my wife has health issues, such as diabetes, I had no other option than to return to work on part time basis at minimum wage. I also have health problems; I have to take medication on a regular basis in order to be able to complete my work.

What frustrates me is that there was a written contract with Fraser Papers guaranteeing my pension. I invested in that pension for more than 36 years. Why, but why must I have to pay for the deficiencies in the Canadian laws and for the abuse by Brookfield Asset Management?!

Why the Occupy movement? Because too many laws in this country are about protecting big corporations, not workers. This is just my true story of how.

Jacques Sarlabous
64 Veniot Street
Edmundston, NB
E3V 1L4
Phone: 506-735-3603
Cell: 506-733-0937
aleah@nbnet.nb.ca



Read more: http://www.digitaljournal.com/pr/469343#ixzz1cFmqQgR2
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Tue Sep 20, 2011 8:38 am

How did we get from "client interests must come first"

to

profit from (abuse) client expense......?

Screen shot 2011-09-20 at 9.33.36 AM.png



self regulation is decriminalization
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Mon Jun 27, 2011 2:12 pm

Enclosed is an example of how the "professional" associations in Canada, which are really "reputation protection" systems for financial players, react when faced with wrongdoing by their members. They run and hide whenever possible, as demonstrated by this exchange:


A complainant is suing an adviser for wrongdoing.
He complains also to ther FPSC as the "professional society" responsible for this "adviser"

This is the ridiculous response he received.

This is a joke

This does not happen when complaints are filed with the PEO involving professional engineers.

How can this position possibly be defended.? .

Ken Kivenko P.Eng.
==================================================
"We have discussed your claim a couple of times, and unfortunately we do have to suspend the file because of the pending litigation.
What would help us to sort out our questions would be to obtain a copy of your Statement of Claim and ____'s Statement of Defense. Are you able to forward a copy of both so we can review them in light of your concerns."
Have a good evening and hope to hear from you soon,

Laura Keddy
Enforcement & Policy Coordinator
Phone: 416.593.8587 x 292 Fax: 416.593.6903
Toll Free: 1.800.305.9886
lkeddy@fpsc.ca
http://www.fpsc.ca
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Sat May 14, 2011 9:11 am

1. there are approximately 500 disciplinary bulletins going back to 1999 with the IDA.
2. Of these 500, 10 (ten) applied to the top five banks
3. this is a number equivalent to 2%

How do I correspond that to the statistic that somewhere between 90% and 97% of the financial transactions in Canada flow through the big five banks? When 98% of SRO disciplinary bulletins do not involve these banks? Does that mean that the SRO's are captive to these players, or are these five players several orders of magnitude more honest than their counterparts?? If disciplinary action against the major IDA sponsors (the top banks) were in the 90% range, it would indicate a direct correlation. What the numbers seem to indicate is that either bank firms are 4500% more honest than those small players that get disciplined.................or that the IDA is simply unable to discipline it's top member firms. Those of us who have worked inside the industry know all to well which of these statements is more likely.
(my numbers stand to be corrected, and I look forward to hearing from you, but the numbers are probably only relevant for illustration purposes anyway. The real problem lay elsewhere)

Each time I see another IDA disciplinary action, I cannot help but notice that it is against a small player, a small firm, or a lone broker. Almost never is it against a major firm. Not even a major firm sanctioned when the lone broker works for one of the big firms, and when the firm may in fact be condoning the behavior. It just seems to be that the IDA is a paper tiger who snaps at minnows, while letting the big fish swim free.

http://www.rcmp-grc.gc.ca/organizedcrime/what_e.htm

The UN Convention on Transnational Organized Crime, Article 2 defines "organized criminal group" as follows: a group having at least three members, taking some action in concert (i.e., together or in some co-ordinated manner) for the purpose of committing a ‘serious crime’ and for the purpose of obtaining a financial or other benefit.
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Sat May 14, 2011 9:07 am

From an email to TB bank about their ombudsman dispute resolution process:

From your 2010 Annual Report:

FAST FACTS
• For 2011, our objective is to complete 90 percent of cases within 90 days
• In 2010, we proposed resolutions on nearly 50 percent of cases
• In 2010, our clients accepted nearly 70 percent of our proposed resolutions

The facts can also be stated as:

For 2011, 10% of cases will take more than 90 days ... and another 40% will receive no proposed solution
In 2010 there were no proposed solutions for over 50% of cases
In 2010 over 30% of the proposed solutions were not accepted

Does this mean that there were no proposed or accepted solutions in 65% of the cases? [ 0.50 + 0.30 x 0.50 = 0.65]

Is that considered good or did we put the wrong interpretation on the statistics?

By calculating 70% of the 50% were accepted we can say that just 35% of the cases in 2010 had proposed solutions that were accepted. This sounds horrible.

Further , you say 254 out of 400 TD customers appealed their cases to the OBSI, which concluded reviews of 213 cases, recommending additional compensation in 59 of them, or 27 %. 254/ 400 seems like a lot of dissatisfied compllainants.

So does the fact that more than a quarter of your decisions were overturned by OBSI.


Please advise.

Ken
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Sun Feb 20, 2011 4:21 pm

* Media News ** Inadequate investor protection a 'disgrace'

by: Jay Bryan, The Gazette, Saturday, February 19, 2011

Canada's financial industry is one of the few sectors of our economy that is globally competitive, with a banking system, for example, that's widely regarded as the most solid in the world.

So how can it be that one aspect of that industry, the protection of small investors from fraud, is so ineffective that it's a national disgrace?

It's hard to avoid the conclusion that it's because nobody in a position of power has really cared. After all, small investors don't have a powerful political lobbying organization or swing a lot of weight with the investment industry. As one industry insider noted yesterday, "There are no professional or financial incentives to push hard on this."

After all, why would mutual-fund firms or investment dealers ask for still more regulation?

OK, if they were wise, maybe to clean up the smelly reputation given to the whole industry by a relatively small number of crooks. But that kind of far-sighted wisdom hasn't been evident so far. And unlike the U. S, where the prosecution of financial crimes is a way for district attorneys to boost their popularity before running for higher office, there's no obvious political reward in this country.

On the other hand, there is plenty of political downside to reforming the system. Just look at the ferocity with which Quebec and Alberta have fought federal finance minister Jim Flaherty's plan to bring in a national securities regulator.

The fragmentation of regulation and enforcement is a severe obstacle to investor protection (and Quebec should know this, having been home to several of the past decade's biggest frauds).

Here's one measure of how effective provincial securities regulators are: Although you might expect that financial frauds are carried out by smooth-talking crooks who fly under the radar, it turns out that fully 78% of the $1.9 billion in fraud-related losses in 15 big scandals studied by an investor-protection group [FAIR] involved persons or firms who were registered with their securities commission. Great job!

Nevertheless, it turns out that the protection of jurisdictional turf is far more important to provincial politicians than protecting their citizens. Congratulations Quebec. Congratulations Alberta. You certainly live up to the adjective "provincial."

But there's at least a little hope for improvement. A blue-ribbon non-profit group, the Canadian Foundation for the Advancement of Investor Rights, or FAIR, which carried out the study mentioned above, has just put together a set of recommendations that could go a long way toward improving this mess.

FAIR supports these recommendations by making it clear how widespread and life-destroying this failure is, painting a devastating indictment of the damage caused to tens of thousands of Canadians who lost money in the 15 big securities scandals its staffers studied.

And remember, big as these numbers are, they aren't anything like a complete accounting of the damage caused by this form of white-collar crime.

FAIR cites Jean St-Gelais, head of Quebec's securities regulator [AMF], as estimating that as of July 2009, an estimated 1.3 million Canadians had been victims of fraud during their lives. "In many cases, investors lose a significant part of or their entire life savings," notes the report. "The impact on their lives is devastating and irreversible."

And what's being done? So far, not much. Here's more from the report: "In the past year, financial fraud and other financial market misconduct affecting Canadians appeared in the media virtually on a daily basis. Canada appears to have a serious problem with financial fraud, and government, regulators, police and prosecutors do not seem to be effective at prevention, detection and prosecution ."

It's ugly reading, but we can hope it's also an encouraging sign that senior policy-makers could finally be getting ready to pay attention to securities regulation.

Happily, the directors of FAIR include several real heavyweights from this world: former executive directors of the Ontario and British Columbia securities commissions, a former chair of the Ontario commission, legendary investment manager Stephen Jarislowsky of Montreal and the crusading former head of the Ontario Teachers Pension Plan, Claude Lamoureux.

Their suggestions aren't radical, just common sense. Here are a couple:
- FAIR would like anyone involved in securities sales to be backed by an industry organization with a fund to protect defrauded investors, something that, amazingly, isn't now required.
- And it would like a well-funded national securities regulator with the power to compensate defrauded investors, along with a federal agency to prosecute financial fraud.

If you agree with these proposals, perhaps it would be a good idea to let your provincial and federal political representatives know.

.........please read the article online at - http://www.montrealgazette.com/business ... story.html

-------------------------------------

Of the 15 high profile Canadian cases of financial fraud in the period from 1999 to 2009, the Earl Jones affair was referenced as one of the top Ponzi schemes.

Our committee is planning on studying this report carefully, and we intend on issuing a response to the press in the coming days.

I do support their call for a national summit on this issue, and look forward to representing the voice of the victims of white collar crime.


Please read FAIR's latest report, as titled A Decade of Financial Scandals online at - http://faircanada.ca/top-news/fair-cana ... -scandals/
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Sun Feb 20, 2011 4:20 pm

* Media News ** Inadequate investor protection a 'disgrace'

by: Jay Bryan, The Gazette, Saturday, February 19, 2011

Canada's financial industry is one of the few sectors of our economy that is globally competitive, with a banking system, for example, that's widely regarded as the most solid in the world.

So how can it be that one aspect of that industry, the protection of small investors from fraud, is so ineffective that it's a national disgrace?

It's hard to avoid the conclusion that it's because nobody in a position of power has really cared. After all, small investors don't have a powerful political lobbying organization or swing a lot of weight with the investment industry. As one industry insider noted yesterday, "There are no professional or financial incentives to push hard on this."

After all, why would mutual-fund firms or investment dealers ask for still more regulation?

OK, if they were wise, maybe to clean up the smelly reputation given to the whole industry by a relatively small number of crooks. But that kind of far-sighted wisdom hasn't been evident so far. And unlike the U. S, where the prosecution of financial crimes is a way for district attorneys to boost their popularity before running for higher office, there's no obvious political reward in this country.

On the other hand, there is plenty of political downside to reforming the system. Just look at the ferocity with which Quebec and Alberta have fought federal finance minister Jim Flaherty's plan to bring in a national securities regulator.

The fragmentation of regulation and enforcement is a severe obstacle to investor protection (and Quebec should know this, having been home to several of the past decade's biggest frauds).

Here's one measure of how effective provincial securities regulators are: Although you might expect that financial frauds are carried out by smooth-talking crooks who fly under the radar, it turns out that fully 78% of the $1.9 billion in fraud-related losses in 15 big scandals studied by an investor-protection group [FAIR] involved persons or firms who were registered with their securities commission. Great job!

Nevertheless, it turns out that the protection of jurisdictional turf is far more important to provincial politicians than protecting their citizens. Congratulations Quebec. Congratulations Alberta. You certainly live up to the adjective "provincial."

But there's at least a little hope for improvement. A blue-ribbon non-profit group, the Canadian Foundation for the Advancement of Investor Rights, or FAIR, which carried out the study mentioned above, has just put together a set of recommendations that could go a long way toward improving this mess.

FAIR supports these recommendations by making it clear how widespread and life-destroying this failure is, painting a devastating indictment of the damage caused to tens of thousands of Canadians who lost money in the 15 big securities scandals its staffers studied.

And remember, big as these numbers are, they aren't anything like a complete accounting of the damage caused by this form of white-collar crime.

FAIR cites Jean St-Gelais, head of Quebec's securities regulator [AMF], as estimating that as of July 2009, an estimated 1.3 million Canadians had been victims of fraud during their lives. "In many cases, investors lose a significant part of or their entire life savings," notes the report. "The impact on their lives is devastating and irreversible."

And what's being done? So far, not much. Here's more from the report: "In the past year, financial fraud and other financial market misconduct affecting Canadians appeared in the media virtually on a daily basis. Canada appears to have a serious problem with financial fraud, and government, regulators, police and prosecutors do not seem to be effective at prevention, detection and prosecution ."

It's ugly reading, but we can hope it's also an encouraging sign that senior policy-makers could finally be getting ready to pay attention to securities regulation.

Happily, the directors of FAIR include several real heavyweights from this world: former executive directors of the Ontario and British Columbia securities commissions, a former chair of the Ontario commission, legendary investment manager Stephen Jarislowsky of Montreal and the crusading former head of the Ontario Teachers Pension Plan, Claude Lamoureux.

Their suggestions aren't radical, just common sense. Here are a couple:
- FAIR would like anyone involved in securities sales to be backed by an industry organization with a fund to protect defrauded investors, something that, amazingly, isn't now required.
- And it would like a well-funded national securities regulator with the power to compensate defrauded investors, along with a federal agency to prosecute financial fraud.

If you agree with these proposals, perhaps it would be a good idea to let your provincial and federal political representatives know.

.........please read the article online at - http://www.montrealgazette.com/business ... story.html

-------------------------------------

Of the 15 high profile Canadian cases of financial fraud in the period from 1999 to 2009, the Earl Jones affair was referenced as one of the top Ponzi schemes.

Our committee (earl jones victims) is planning on studying this report carefully, and we intend on issuing a response to the press in the coming days.

I do support their call for a national summit on this issue, and look forward to representing the voice of the victims of white collar crime.


Please read FAIR's latest report, as titled A Decade of Financial Scandals online at - http://faircanada.ca/top-news/fair-cana ... -scandals/
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Sat Feb 12, 2011 5:51 pm

another canadian tells of how those in canada who are paid a salary to protect the public, actually take the money and protect themselves and their friends

Hi Larry, I just watched your documentary (breachoftrust.ca) after you posted the link on the Earl Jones group. I wish I would have been able to see it prior to March 2008, when my financial advisor cleaned out my 30 years of life savings (Daniel P Reeve, DPR Financial (see my Facebook group, "Swindled by DPR Financial Inc"). I was nodding regularly watching the videos, thinking, that's exactly what I have been going through. After 2 years of investigating, the Waterloo Regional Police have still not laid charges (133 complaints to police thus far! Stay tuned, because there should be action against this crook soon).
However, I have battled everyone along the way...the OSC, FSCO, Manulife, Canada Life, Ombudservice for Life and Health Insurance, Ombudsman of Ontario. Each and every one of them have chewed me up and thrown me to the wolves. I learned the long and hard way, there is NO REGULATION IN CANADA.
I have written every Member of Parliament in Canada. Rob Nicholson knows me well. Two personal letters back from him; one personal letter recently from Vic Toews, Minister of Public Safety.
Anyways, I thought I'd share a few words on my own experience. Thanks for doing what you have done.

Ira
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Mon Feb 07, 2011 9:35 pm

Peddling Poison for Fun and Profit

Wall Streeters made fortunes, the new official report on America's 2008 economic meltdown charges, defrauding the public. They're still making fortunes — and this new official report is already sinking out of sight.
A quarter-century ago, in 1986, the biggest Wall Street banker paycheck went to John Gutfreund, the Salomon Brothers CEO. Gutfreund pulled in $3.2 million. Two decades later, in 2006, Merrill Lynch CEO Stanley O’Neal pocketed $91 million.

To understand the 2008 Wall Street meltdown that cratered the U.S. economy, suggests the new final report from the panel Congress appointed to probe the causes of that crater, you need to understand this enormous pay explosion — and the fierce incentive this explosion created for reckless and fraudulent behavior.

How reckless and fraudulent? In the years that led up to the 2008 meltdown, the Financial Crisis Inquiry Commission report released late last month details, Wall Street’s top bankers and financiers “made, bought, and sold mortgage securities they never examined, did not care to examine, or knew to be defective.”

These same bankers borrowed, based on these securities, tens of billions of dollars “that had to be renewed each and every night” and then traded these billions in totally unregulated, semi-secret, financial “derivative” gambles.
This frenetic financial folly would eventually leave four million homes lost to foreclosure and another four and a half million American families either ensnared in the foreclosure process or seriously behind on their mortgage payments.
“Nearly $11 trillion in household wealth has vanished,” adds the Financial Crisis Commission final report, “with retirement accounts and life savings swept away.”
That sweeping never reached Wall Street’s executive suites. The executives and traders who orchestrated the meltdown's financial devastation have either walked away with fortunes — or resumed, post-meltdown, their fortune making.

The top five execs at Bear Stearns, for instance, all lost their jobs when that investment house collapsed in 2008. But in the eight years before that collapse, notes the Financial Crisis panel, these five “took home over $326.5 million in cash and over $1.1 billion from stock sales.” Their windfall exceeded the annual budget of the SEC, the federal agency that’s supposed to keep Wall Street honest.
Why didn’t regulators from the SEC and other agencies keep better tabs on Wall Street's behavior? The same pay explosion that gave bankers an irresistible incentive to defraud inhibited effective regulation. Agencies couldn’t afford to compete with Wall Street to retain knowledgeable financial professionals.
The Wall Street pay explosion also helps explain why this Financial Crisis panel final report — a clear, compelling read — appears to be going nowhere. The 545-page paper, since its January 27 release, has sunk, like a rock, from public view.
Reports from blue-ribbon panels don’t, of course, always sink. They sometimes help crystallize public outrage and serve as a useful stepping stone to fundamental reform. In the Great Depression, the Senate Banking Committee’s celebrated Pecora Commission report played just that role.
But blue-ribbon reports, to make an impact, need political patrons, elected leaders who’ll talk the report content up, in news conferences and speeches, and demand immediate action to correct the ills that report content identifies.
The Pecora Commission report had plenty of those patrons, including President Franklin D. Roosevelt. The Financial Crisis Inquiry Commission has had virtually none. The White House has done next to nothing to give the report legs, and neither have many Democratic lawmakers.
Republicans, for their part, have followed the lead of the four GOP appointees on the panel. All four “dissented” from the main report, and their convoluted rebuttal to the majority report has allowed conservatives — and much of the media — to dismiss the Financial Crisis panel report as a purely partisan exercise.
Why all the haste to bury this report? Politicos on both sides of the aisle have essentially become too dependent on Wall Street. The report itself supplies the basic numbers: From 1999 to 2008, the financial industry dumped over $1 billion into political campaigns — and spent another $2.7 billion on lobbying.
That money has kept the Wall Street money machine percolating nicely. Total pay in the financial sector, the Wall Street Journal reported last week, topped $135 billion last year, a new record. Overall, concludes the Council of Institutional Investors, pay practices on Wall Street “have worsened” since the 2008 crisis.
The American people, meanwhile, remain absolutely outraged. Over 70 percent of Americans, a Bloomberg poll found this past December, want big bonuses banned this year at Wall Street firms that took taxpayer money.
People power, of course, can check money power, but only if organized. In the Great Depression, people did organize. The hugely influential Senate Banking Pecora Commission operated against the backdrop of a mobilized popular uproar.
The lesson for today? Even the most compelling blue-ribbon reports can’t, on their own, drive real reform. The pressure to end the pay excess behind the horrors the Financial Crisis Inquiry Commission has so exhaustively chronicled is going to have to come from average Americans.
The Financial Crisis Inquiry Commission has its final report available online, for free download. Interested in organizing, in your community or congregation, for economic security and justice? Check the Common Security Club network.

http://www.toomuchonline.org/tmweekly.html
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Fri Dec 31, 2010 3:27 pm

this study by a University of Alberta prof is outstanding in scope and in understanding of the Canadian way. I think it is the most important study I have seen in years to shed light on how investing in Canadian stocks carries risks unique and unknown to most investors. I have first pasted below select quotes that jumped out at me as I read the study, along with the web site to read the entire study if you prefer. Enjoy and protect yourself accordingly.


Some Obstacles to Good Corporate Governance in Canada and How to Overcome Them
by
Randall Morck Stephen A. Jarislowsky Distinguished Professor of Finance, The University of Alberta Business School; and Research Associate, National Bureau of Economic Research.
and Bernard Yeung Abraham Krasnoff Professor of Global Business and Professor of Economics, Stern School of Business, New York University

https://business.sitecore.ualberta.ca/RandallMorck/Research/~/media/University%20of%20Alberta/Faculties/Business/FacultyAndStaff/FSA/RandallMorck/Documents/Research/PolicyWorkingPapers/SomeObstaclesToGoodCorporateGovernanceInCanada.ashx

Selected summary quotes for short attention spans:

--self-dealing by Canadian corporate networks

--Tunneling........building underground, under-the-table connections between family controlled corporations at the expense of public shareholders

--Pyramidal Group. A family firm controls listed firms, each of which controls more listed firms, each of which control yet more listed firms. Remaining shares in each firms are held by public investors.


--the mechanisms that permit handfuls of wealthy families to exercise control over virtually the whole of their national economies.

--Political influence

--they permit business transactions that would otherwise be deterred by inefficient courts, weak financial systems, and general corruption problems36.

--a side effect of entrusting a small group of people with control over vast
corporate assets is that they then command corresponding political influence.

--Do pyramidal groups provide similarly disproportionate political influence to the Canadian families that control them? Canadian governments are extremely secretive about their subsidies to industry, and Statistics Canada has repeatedly rebuffed my
inquiries along these lines.

--A few news stories do, however, suggest that a problem exists. One such story
involves the Charles Bronfman family, which controls one of Canada’s larger pyramidal groups. The family secured a temporary 1991 change in federal tax policy effective around the dates when tax would have become due on a $2.2 billion capital gain in their family trust. A subsequent federal tax deferral of over $2.1B for the family also raised eyebrows among tax economists. There is no allegation that the Bronfman family broke any law – only a concern that their influence affected public policy in a way few others could match.3

--Fears of disproportionate political influence were one of the key drivers of reforms in the United States in the 1930s that essentially eliminated pyramiding in that country.

--Figure 3 shows that, in the late 1990s, almost half of the assets of the top 100 listed Canadian corporations belonged to firms that were members of pyramidal business groups.41

--The Canada Discount
It shows that Canadian firms trade at substantial discounts relative to otherwise similar United States firms.

--Figure 9 shows that Canada’s stock markets are less active, in terms of the value of shares traded as a percentage of gross domestic product (GDP), than those of any other major Common Law country.

--Poor corporate governance means that firms are run inefficiently. That is, in a country beset by weak corporate governance, firms spend more on inputs than they need to and end up producing outputs that are not as valuable as they could be.

--In practice, corrupt or inept government tends to occur in the same countries whose private sectors exhibit weak governance.64

--The Canadian Disease?
Morck, Stangeland, and Yeung (2000) argue that this interaction is stronger in Canada than in other rich Common Law jurisdictions. Using cross country data, they find markedly depressed economy performance in countries that more extensively entrust corporate governance to wealthy old money families.

--Morck et al. (2000) argue that Canada entrusts the corporate governance of much of its large corporate sector to entrenched, politically influential, old money families, and that this explains its laggard economic performance. They refer to this condition as the Canadian disease, and suggest that this ailment retards many other developed and developing economies.

--Thus Canadian corporate governance is hampered by another burden. Canadian
directors have vague fiduciary duties and unsafe harbors

--A controlling shareholder has no duty under the oppression remedy to act in the interests of public shareholders; and a director who let a controlling shareholder put his own interest ahead of public shareholders breaches no fiduciary duty.

--Conclusions
Canada has a corporate sector, and consequently corporate governance problems, that in many ways more closely resemble those prevalent in Italy and Latin America, than those of the United States and United Kingdom. This is largely because Canada missed out on a first stage of corporate governance reforms that the United States implemented in the 1930s and that fell into place in the United Kingdom in the decades following World War II. This first stage of reforms created large corporate sectors of freestanding and mainly widely held firms. Absent these reforms, Canada’s large corporate sector remains characterized by controlling shareholders and large Byzantine corporate groups.
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Sat Dec 25, 2010 7:24 pm

Advocis is a national professional association that prepares, promotes and protects financial advisors in the public interest. We do this by providing a professional platform including career support, designations, best practices direction, education, timely information and professional liability insurance. This strengthens the relationship of trust and respect between financial advisors and their clients, the public, and government. The Association’s website is . http://www.advocis.ca.


(advocate comments.......I found this posted recently and thought it deserved a few comments for honesty and clarity:

1. "Advocis is a national professional association" Actually Advocis is "attempting' to appear as a professional association, but is actually a group of life insurance salespeople who are trying to alter their image from "life insurance salespeople" to something other, something with the word "advisor" in it and something to make the public trust them more. A name change more than a substance change. Some might call it marketing spin. Some might even call it misrepresentation.

2. "promotes and protects financial advisors" This would be correct.

3. "in the public interest" This would generally be bull.

4. "strengthens the relationship of trust and respect between financial advisors and their clients, the public, and government" Again, marketing and profits would suggest that getting the public and others to "trust" life insurance sellers, so they can sell more is correct. As far as actually delivering on the honest disclosure and professional standards required to earn this trust, that is quite debatable. The name change is something akin to putting lipstick on the pig, and your financial wellbeing would be best protected by not assuming there is anything behind it other than sales motivation.

(As with all other "self proclaimed" organizations, or those who work their way into self regulation positions, when push comes to shove and they are taken to the supreme court, the customer will learn the hard way that these organizations work 100% for their salespeople members and they "owe no duty of care for the public")

Buyer beware bigtime.
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Re: Financial Abuse by "Trusted Professionals"

Postby admin » Tue Nov 09, 2010 11:41 pm

A holiday season thank you to all North Americans. From investment bankers, brokers, regulators and all the related friends in the financial services industry.

As the year comes to a close, we must take the time to reflect on the past twelve months, reflect on our blessings, on friends and family. We often forget to do this with the hustle and bustle of our lives. Here is our message of thanks to you:

We would like to say thank you for the many blessings you have given us;

Thank you to the US congress for allowing our lobbyists to sit in your offices and write our own loopholes into each law you propose that affects our industry.

Thank you to Canadian legislators for letting us do similar with our friends on Bay street.

Thank you to the SEC for being the best “acting” securities regulator while employing more lawyers than any other agency, while doing the best job of pretending to protect the public.

Thank you to all 13 Canadian Securities Commissions for allowing us to skirt your laws using your “exemptive relief” provisions. Without ever having to inform the public of this. You guys are AWESOME! This is something we could never get away with in the US.

When the dust settled and it looked like you “had to” show yourself giving us a slap on the wrist, you gave us fines of one half of one penny for each of the $32 billion taken. Good bless you, each and every securities “regulator” in Canada.

Professional associations, ombudsmen, the financial press, etc, for all being supportive of our efforts, our advertising, and for looking the other way at many of our predatory practices. We will keep spreading the money around as much as we can. Accountants and lawyers who co-operate with us will always be taken care of as “brothers in arms”. Bless you, every one.

As we saw approximately $13 trillion dollars (wow, who could imagine) of wealth transferred, or skimmed, or commission paid on phony products, we would like to thank the middle and upper class people of both Canada and the US for being so cooperative with their money, and letting us own their politicians. Especially the taxpayers of each country for stepping in and giving us the money to pay our bonus’s etc, when we make a few boo boos. Without you the taxpayer, we truly would not have made it.

In Canada, we were able to earn fees on $32 billion of sub prime mortgage paper with our dear friends at the securities commissions only handing us fines of one half cent for every dollar. What a magical system.
Thank you to the Pan Canadian Investment committee for negotiating a ban on civil suits for all of our members who sold or dealt in this product. We really appreciate it.
Thanks also to the Canadian courts who granted us this immunity from civil prosecution. How can we ever repay you? You Canadians are so polite, we just love you all.

To the Canadian and American police agencies, our gratitude for looking “the other way”, while we do our complicated things that we do. Your reverence and deference to our special “regulators” is heartwarming. We will never forget how you “trust us” to police ourselves. If you ever need jobs in the securities industry, we are always looking for good men who are willing to look the other way.

Finally, one single note of caution, for the holidays. Please do not listen to naysayers about us, and for mankind's sake do not read Arianna Huffington’s new book, “THIRD WORLD AMERICA”, or anything like it. Ignore THE INSIDE JOB movie. For Canadians ay no to SWINDLERS, the book and don’t watch breachoftrust.ca on the net. Stay away from it all and have a safe and happy holiday season.

FromYour bankers, brokers, friends and regulators in the financial industry. All the various investment dealers associations, mutual fund dealer associations, lobby groups and trade associations. You can trust us to wish you a happy holiday.
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