Financial crime more than every other crime combined?

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Re: Financial crime more than every other crime combined

Postby admin » Sat May 28, 2016 3:34 pm

Is there a Two Tiered System of Justice In Canada?

Commit fraud as a citizen and go to jail.
Commit fraud as a financial advisor, jail. Ever?

Crime is free when your industry pays the salaries of every Securities Commission, and self-regulator in the land.

52 year old woman found guilty of defrauding social assistance of more than $111,000. Penalty: 90 days in jail, probation for three years, 200 hours of community service, $1,191.41 in restitution, a separate restitution order for $100,000, garnishing of future wages, apology letter, and a $200 victim surcharge.

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Financial advisor cheats an 85 year old elderly client out of more than a $150,00 Penalty: loses his license to practice

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Moral of the Story
52 year old woman decides to use time in prison to study Canadian Securities Course and become a Financial Advisor!

In a post script, I add in these areas which are worth keeping in mind. They are part of the many root causes of billions upon billions cheated (by financial industry professionals) from Canadians, year after year:

1. Millions of dollars of uncollected fines
2. tens of thousands of “advisors” found to be without an advisor license (this story is also not going away anytime soon….)
3. Criminal code applies to crimes…..except crimes of the financial industry
4. thousands of exemptions to the law granted, without public notice or warning, in order to sell defective advice/products to the public
and this link
5. and so on...
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Location: Canada

Re: Financial crime more than every other crime combined

Postby admin » Sun Dec 28, 2014 3:22 pm

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Bank CEOs are the New Drug Lords.

Here is a list of some of the banks managed by Bank CEOs, aka the new Drug Lords, that were fined billions of dollars for fixing LIBOR rates and stealing money from clients: Lloyds Bank, RP Martin, Barclays, Deutsche Bank, Royal Bank of Scotland, Société Générale, JP Morgan, Citigroup, Barclays, United Bank of Switzerland and Rabobank.

Here is a list of some of the banks in which the Bank Lords fixed FX rates and are currently negotiating fine amounts with the UK Financial Conduct Authority (FCA): Citigroup, HSBC, Royal Bank of Scotland, Barclays, JP Morgan and United Bank of Switzerland.

HSBC had to pay nearly $2B in fines after its Bank CEO was allegedly caught overseeing the laundering of $7B in drug money for the notoriously violent and ruthless Sinaloa drug cartel among other Mexican drug cartels and committing a wide array of other crimes like laundering $290MM from Russian mobsters that told HSBC bankers that their vast profits came from a “used car business”. I say “allegedly caught”, because every time this happens, the bank CEO, in this case, HSBC CEO Stuart Gulliver, inevitably denies ever knowing that the cartel he was overseeing was laundering dirty blood money. The Bank Lords issue these ridiculous denials despite the fact that every independent investigator not on a Bank’s payroll that investigates banks’ money laundering schemes arrive at the same conclusion as Jose Luis Marmolejo, the former head of the Mexican attorney general’s financial crimes unit:
“[The money laundering] went on too long and [the bank CEOS] made too much money not to have known.”

And what about HSBC’s $2B assessed fine for laundering this blood money? In response to meaningless fines like this that never change banker behavior, Martin Woods, former senior anti-money laundering officer at Wachovia bank, implored,
“What does the settlement do to fight the cartels? Nothing – it doesn’t make the job of law enforcement easier and it encourages the cartels and anyone who wants to make money by laundering their blood dollars. Where’s the risk? There is none.“

That is why HSBC is not the only cartel that houses bankers who have been caught laundering blood money in recent years. Wachovia Bank, Citigroup, Banco Santander, and Bank of America bankers have all been caught leading their banks in participation of this dirty deed as well. According to Paul Campo, head of the U.S. Drug Enforcement Administration’s financial crimes unit, drug traffickers used Bank of America to finance their drug smuggling operations for 10 tons of cocaine and laundered drug money through Bank of America accounts in Atlanta, GA, Chicago, IL, and Brownsville, TX from 2002 to 2009.

So how do Bank Lords get away with their dirty deeds scot-free? This month, explosive evidence contained in 47.5 hours of secret recordings from Goldman Sachs whistleblower and former New York Federal Reserve employee Carmen Segarra provides the answers we already knew. Bank Lords have been buying off judges and regulators after already buying off cops (JP Morgan CEO Jamie Dimon “Gifts” Largest Donation Ever to NYPD of $4.6MM). When Fed regulators asked Segarra to alter minutes of meetings in which Goldman Sachs bankers’ immoral behavior was discussed in order to cover up the truth and to lie about the content of these meetings, Segarra decided to secretly record her meetings with her bosses. Below are some of the revelations contained in the transcripts of those secret recordings: In one meeting Segarra attended, a Goldman employee expressed the view that
“once clients are wealthy enough, certain consumer laws don’t apply to them.”

After that meeting, Segarra turned to a fellow Fed regulator and expressed how surprised she was by that statement — to which the regulator replied, “You didn’t hear that.”When Segarra discovered multiple conflicts of interest in Goldman Sachs deals between Goldman Sachs bankers and their clients that led to deals being struck that would be the equivalent of insider trading in the stock market and consequently discovered Goldman Sachs had no “conflict of interest” policy, her boss harassed her and demanded of Segarra, “Why do you have to say there’s no policy?”

When Segarra complained to her legal and compliance manager, Jonathon Kim, of how her discoveries were being handled and told Kim that
“even when I explain to [my superiors at the New York Federal Reserve] what my evidence is, they won’t even listen”
, Kim reacted in an equally morally bankrupt manner as Segarra’s superiors, advising Segarra “to be patient” and to “bite her tongue.” So now that we know that Bank Lords buy out morally-challenged regulators, cops and judges in return for carte-blanche to continue committing crimes, rig markets to collect undeserved and unearned kickbacks, and launder drug cartel money from violent cartels that murder 10,000 people a year (the Sinaloa drug cartel), is there really even a line in the sand that separates Bank Lords and Drug Lords, or have Bank Lords become the new Drug Lords?bank lords are the new drug lords

Let’s take a closer look into the increasingly similar worlds of drug cartel and bank cartels. The last market bubble will not be the Chinese or Thai real estate bubble, the US stock market, the US student loan bubble or the Social Media bubble. If we take a look at the political cartoon to the left, drawn more than a century ago in 1907, we find that Bank CEOs have been engaging in the same nefarious deeds ever since they were able to put the global banking system on the fractional reserve banking platform. Banker immorality, having multiplied and grown for over a century, will be the last bubble to pop. To illustrate what I am talking about, let me pose this singular question:
“Is it possible to prove that a notoriously violent Drug Lord provided more positive value to society during his reign of terror than criminal Bank Lords like Jamie Dimon, Lloyd Blankfein & Stuart Gulliver are providing during theirs?”

If we can make a strong case for a Drug Lord providing more social value and benefits than the largest Bank CEOs in the world, all else being equal, then this is the point when we know our future is dire, especially if we refuse to collectively revolt right now against the very banking system that enslaves us.At first you may think that my aforementioned question is a ludicrous question. After all, how can the positive social benefits provided by a violent, murderous Drug Lord possibly exceed the social benefits, as non-existent as they may be, provided by the heads of the largest bank crime syndicates? Before we dismiss this question, let’s seriously explore it and see what conclusions we may draw from this exercise.

Every large drug cartel in the world, whether it was Pablo Escobar’s infamous Colombian Medellín cartel in the 1980s or El Chapo Guzman’s notorious Mexican Sinaloa cartel of today, has required the logistical support of a sophisticated banking division not just to survive, but to truly thrive. In fact, without the support of a large global Bank CEO, the largest drug cartels in the world would quickly crash and burn and the Drug Lords would disappear. As we explain in the next section, it is simple to conclude that without the consent and help of global Bank CEOs, the world’s largest drug cartels would not be viable. In the 1980s through the early 1990s, Pablo Escobar chose the Italian Banco Ambrosiano and allegedly the Vatican Bank as well to launder billions of his dirty money, while in more contemporary times, El Chapo Guzman handpicked HSBC Bank USA as his preferred bank to launder his billions. Murder and Crime: Drug Cartels v. Global BanksDuring his reign of terror, Pablo Escobar ordered the murder of an estimated 4,000 people, including hundreds of police officers, judges, lawyers, journalists and anyone that dared to oppose his violent drug cartel. Escobar even allegedly tortured his own associates that proved to be disloyal to him. However, of the thousands of murders committed by Pablo’s cartel, it was likely that he did not commit the murders himself. Drug Lords are notoriously careful about committing homicidal acts that would provide the evidence prosecuting attorneys need to put them behind bars for a very long time. It is more than likely that a man like Pablo Escobar paid others to carry out his murders for him. However, Banco Ambrosiano and Vatican Bank executives, if they did indeed knowingly launder Pablo’s billions as has been alleged, share a significant measure of complicity in Pablo’s murders. Without having a bank to launder his money, there would have been no reason for Escobar to continue operating his cocaine cartel and murdering the people that opposed him.

Likewise, one can successfully argue that HSBC CEO Stuart Gulliver and top HSBC bankers enabled many more murders than even Escobar. The Mexican drug cartels, whose money HSBC laundered, have murdered an estimated 80,000 people since 2006 (10,000 murders between 2008 and 2012 by the Sinaloa drug cartel alone), far more murders than Escobar’s empire ever carried out. Even though Banco Ambrosiano and HSBC Bank CEOs were not directly giving the orders to murder people, you must connect the dots between the Bank CEOs that launder drug cartel money and the crimes committed by these drug cartels because the dots can NOT be separated. Both actions are inextricably linked to one another, and without the services of money laundering willingly provided by the bank CEOs, the 80,000 murders committed by the Mexican drug cartel criminals would not occur.

Former anti-money laundering officer Martin Woods wholly supports the above argument:
“Is it in the interest of the American people to encourage both the drug cartels and the banks in this way? Is it in the interest of the Mexican people? It’s simple: if you don’t see the correlation between the money laundering by banks and the 30,000 people killed in Mexico (actually, 80,000 people have been killed in the Mexican drug wars since 2006), you’re missing the point.”

After presenting evidence to Wachovia bank executives of their employees willingly laundering drug traffickers’ blood money, to which Wachovia bank executives responded by telling him to shut up and by trying to get him fired, Woods understandably quit his position with Wachovia in disgust, stating,
“It’s the banks laundering money for the cartels that finances the tragedy.”

Here is a list of complaints Woods filed with the UK House of Commons, including accusations that the very regulatory agency that was supposed to aid his investigations to uncover truth, the UK Financial Services Authority (FSA), worked more against him than with him to clean up the crimes of the banking industry.The only redeeming excuse that HSBC, Citigroup, Wachovia, and other Bank CEOs may have (that have collectively laundered billions upon billions of drug cartel blood money) is a proven ignorance of these activities occurring within their banking operations. However, as I previously stated, this excuse as a legitimate one is extremely unlikely. An abundance of journalists and law enforcement agencies that have studied internal bank documents to understand the complexity of drug laundering operations of big global banks always reach the same conclusion. US Customs Agent Robert Mazur and Mexican journalist Anabel Hernández, after years of meticulous research, both concluded that bankers at the highest levels of the drug-laundering bank – the CEOs, COOs, and CFOs – all know about these operations beyond any reasonable doubt and that ignorance of these immoral and illegal activities is nearly impossible.

When I worked as a Private Banker for a large global banking firm many years ago, the top policy that was always stressed for all accounts, but in particular, any account that involved a steady stream of large and frequent cash deposits, was KYC, or Know Your Client. It was absolutely incumbent upon the banker to visit the operations, and “kick the tires” per se, of any account that generated large cash deposits to confirm the legitimacy of the cash flow. If the source of these large cash deposits could not be determined, then all such accounts were to be immediately terminated. Thus when men like HSBC CEO Stuart Gulliver profess complete ignorance of laundering billions of cash for drug cartels, I have to concur with Mazur and Hernández’s assessment, as the top experts in money laundering schemes, that it would have been nearly impossible for Gulliver not to know.In conclusion, I would place Escobar in the category of “violence inflicted upon society”, just slightly above global Bank CEOs because the drug lords are the ones giving the direct orders to murder tens of thousands while Bank CEOs are only enabling these murders through their drug laundering operations. However, banks must receive a black mark for willingly participating in extremely profitable, criminal drug laundering operations that leave a trail of tears and misery, as people like Martin Woods, Robert Mazur and Anabel Hernánde have all made it crystal clear through their work that it is near impossible for a Bank CEO not to willingly approve these types of extremely profitable operations that create tens of thousands of homicides.

Furthermore, the comparison between Bank Lords and Drug Lords is made even more apropos when we examine some of the “turf wars” Bank Lords engage in when committing their crimes. Drugs never leave a drug-infested neighborhood when a corner dealer or even a regional distributor is murdered. Rather, a competing Drug Lord will fill the void left by a competitor’s demise and opportunistically expand his criminal empire by providing product distribution in regions where a void may develop. Likewise, when Deutsche Bank was recently forced to vacate one of the 12 seats in the gold & silver rigging game in London, Citigroup swooped in and took control over Deutsche Bank’s vacated turf. Quality of Life/Social Contributions: Drug Cartels v. Global BanksCocaine cartel Drug Lord Pablo Escobar, at the height of his cartel, was believed to have supplied an astounding 75% of the entire world’s cocaine, as strong a monopoly on cocaine as is the US military-protected Afghan poppy fields that recently supplied between 95% to 98% of all heroin distribution today. Pablo’s cocaine empire was so far reaching that Roberto Escobar, one of Pablo’s closest brothers, estimated Pablo’s annual profits to be in the range of $20 billion a year. According to the United Nations Commission on Narcotic Drugs, in 1982, cocaine usage peaked in the United States at about 10.5 million users. Historically, the US has accounted for roughly 40% of all global cocaine users. Using these figures, we can roughly estimate total global recreational cocaine use at 26.25 million users at the height of cocaine’s popularity in the early 1980s. Now let’s factor in the worst possible case scenario for every single one of these 26.25 million cocaine users. Let’s assume, in the worst possible case scenario, that not a single one of them was a functional recreational cocaine user and that every single one of these global cocaine users caused stress and trouble for at least 10 other family members and friends, so that 26.25 million X 10, or 262 million people were adversely affected in some social manner by cocaine users. Since Escobar supplied 75% of all cocaine users at the peak of his operations, in a worst possible case scenario with ludicrous worst possible case assumptions, one would conclude that Escobar had a negative social impact on 75% of 262 million, or 196 million people, in this world. Now you may think to yourself, “Wow, that is a lot of people for one cartel to negatively affect” and you would be correct.But yet, if we compare the negative social value of Pablo Escobar’s drug cartel versus that of the criminal Central Bank cartel, it simply pales in both magnitude and lasting effect. In 1982, during the peak years of Escobar’s operations, the global population was about 4.6 billion people. The decisions that the Central Banking cartel made back then negatively affected not 196 million people as did Pablo’s empire under a worst-case scenario, but exceeded this worst-case scenario by 4,404,000,000 people. Why does the negative reach of the Central Banking cartel extend so much further than that of a drug cartel? To begin, the Central Banking cartel’s fractional reserve banking policies drain the purchasing power from the savings of every single person on on the planet – fathers, mothers, sons, and daughters, aunts, uncles, grandmothers, and grandfathers.

Ever since their existence, Central Bankers have created massive amounts of new money through a process called fractional reserve banking that has created annual inflation rates that far exceed any annual cost of living adjustments (COLA) that any nation’s citizens receive from their employers.
Thus every year, the Central Banking cartel robs the wealth of every single man, woman and child on earth and deliberately makes every single human being’s life on this planet less enjoyable and more difficult.
To compare apples to apples, we simply use the 4.6 billion global population figure that existed at the height of Escobar’s drug empire to estimate the negative-reach of the Central Banking cartel. Fractional reserve banking policies employed by every global commercial banker on earth makes it impossible for large percentages of people that dwell in poverty to ever move out of poverty, and these policies adopted systemically by Bank CEOs in the global banking system cause millions of people worldwide to lose homes, jobs, and emotional stability.Most people don’t understand the above facts about fractional reserve banking policies because governments release bogus “official” inflation statistics through the banker-owned press and media. For example, in the US, the official government rate of inflation in September 2013 was 1.5% and was reported by the US government to be 1.6% for the entire 2013 fiscal year. However, the inflation rate in the US is only so low because, as ludicrous as this sounds, bankers literally have stripped out the largest components of inflation from the equation they use to calculate inflation. A comparable lie would be if you stripped out all components of heat from a heat index and reported that it was -30 Celsius at noon in the Saharan dessert during the hottest month of the year. If you take an honest equation for inflation, as others like John Williams of have done, then we know inflation rates were more than 9%, or more than 6 times higher than the “official” US government inflation rate of 1.5%. In 2002, none other than the Chairman of the US Central Bank, Alan Greenspan, stated, “The price level in 1929 was not much different, on net, from what it had been in 1800. But in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent over issuance of money.” In essence, Greenspan stated that in just 60 years, prices had increased by 10 times due to fraud committed by Central Bankers and their deliberate “persistent over issuance of money” - fraud that negatively affected every human being on Planet Earth.If you were a 20-year-old young adult that had just graduated college with a starting $30,000 a year salary in 1933, by 1993, just 60 years later, you would have to be earning an annual salary of $300,000 just for your salary to have the SAME purchasing power as your 1933 salary. In other words, you would have had no better a quality of life in terms of purchasing power, earning $300,000 a year in 1993 than you would have had earning just $30,000 a year in 1933 due to the Central Bank cartel’s destruction of currencies. Furthermore, since Alan Greenspan was using the bogus US government “official” rates of inflation to make his calculations, the above example I’ve provided actually UNDER-ESTIMATES the reality of the negative social impact of the Central Banking cartel as $300,000 1993 dollars would actually have LESS purchasing power than $30,000 1933 dollars. Of course, other tangibles such as better technology in 1993 versus 1933 would grant one a better overall quality of life, but technological advances that create improvements in quality of life are certainly not attributable to bankers.If you’re old enough to remember growing up in a time where your father was the sole breadwinner of your household, your mother stayed at home and raised you, you had 2, 3, or even 4 other siblings, and no one was ever without food or clothes and you were considered middle class, that “middle class” life today has all but vanished and has become extinct thanks to the global scam of fractional reserve banking. And we can all thank the criminal Central Bank cartel, as well as their shills and misinformation agents such as Warren Buffet, Charlie Munger, Bill Gates, Jamie Dimon, etc. for this new, much more miserable reality. It amazes me that even when ex-bankers like Greenspan make admissions of their criminal negative impact upon society, that those working within the banking industry still refuse to process the inherently immoral nature of the crime syndicate for whom they work, such is the utter success of bankers’ centuries-old propaganda campaigns. Economic/GDP Contributions, Drug Cartels v. Global BanksLet’s assume that the creation of debt has a net negative overall affect on society (as debt creation drains the wealth of individuals) while the creation of GDP has a net positive affect on society. In the past 15 years, G7 Central Bankers created $7 of debt for every $1 of GDP that they contributed to society, resulting in a net negative [-$6] contribution. In the late 1980s through the early 1990s, drug lord Pablo Escobar “came to control 75 percent of the global [cocaine] market, with [drug] revenues from trafficking equivalent to [a positive] +5 percent share of the country’s GDP.” (Source: Garcio -Bario, Constance. “U.S. War on Drugs in Colombia is Ravaging Farmers and Land”, 2 March 2004. Common Dreams Newscenter). In fact, Pablo Escobar always declared, at every opportunity afforded him, his belief that he was helping Colombia’s economy more than he was hurting it: “The entire economy benefits from drug money; those who traffic and those who do not. If a drug trafficker builds a house, the peasant who cuts the wood for it benefits from that.” Unfortunately, it is exactly this flawed belief of Escobar’s that valued money over all other factors, including morality, that the vast majority of today’s global Bank CEOs have embraced. Though there is no honor in the above statement, whether you agree with it or not, in regards to economic contributions to society, it is obvious that Escobar’s drug cartel produced far more value in terms of GDP for society than bank cartels. Goodwill, Drug Cartels V. Global BanksPablo Escobar, during the height of his drug cartel’s success, was credited with being directly responsible for pulling thousands of his countrymen out of poverty and providing them with jobs. With his billions of drug cartel money, Escobar built schools, hospitals, fútbol fields, and churches and even sponsored many little-league community fútbol teams. Escobar even built housing developments with his blood money and gave thousands of units to poor people rent-free. Of course, these actions were not all altruistic by any means as Pablo’s dealers also were known for widely distributing cocaine in the same housing developments that Escobar built for the poor. Thus, by giving away these apartments, Escobar was ensuring himself of a steady supply of customers.

Despite these obvious contradictions, for all the goodwill that Pablo generated in Colombia, he was revered by thousands in his country as a saint during the height of his empire and still is today. However, to many others, he was and still is a monster.While I am sure that Jamie Dimon, Lloyd Blankfein, Brian Moynihan, Stuart Gulliver, Michael Corbat, Hank Paulson, Ben Bernanke, Peter Zöllner, Christine Lagarde, Mario Draghi, and Mark Carney have all made sizeable donations in their communities at some point and to civic-minded organizations like hospitals and schools and the arts, their more prominent donations seem to be to the police state that can ensure that their rule of corruption will continue. JP MorganChase CEO Jamie Dimon’s well–publicized 2011 $4.6 million payoff to the New York Police Department coincided with a violent police crackdown on Occupy Wall Street protests of Wall Street’s biggest and most corrupt banks, including JP Morgan. Never in a thousand years would hundreds of thousands of the poorest people in any community anywhere in the world call Bernanke, Saint Ben, Blankfein, Saint Lloyd, Moynihan ,Saint Brian, or Dimon, Saint Jamie.

Exploring this topic exposes the ludicrous nature of the inseparable relationship between Drug Lords and Bank Lords. If Bank CEOs did not launder Pablo’s money, Pablo would not have been able to build his schools, churches, medical facilities, homes and community recreational centers. Thus, are Bank CEOs contributing to society because they enable Drug Lords to provide thousands of jobs in their communities? Global Wars: Drug Cartels v. Global BanksIn the category of war and war crimes, who inflicts more harm upon humanity – Drug Lords or Bank CEOs? Though we know that Drug Cartels are drains on the financial resources and budgets of many governments worldwide due to the “War on Drugs” that governments wage upon them, these wars are limited in scope and finances, and are just a drop of water in the ocean when compared to the wars that are financed by Central Banks. Furthermore, the “War on Drugs” is a false war whose true purpose is not to eradicate drugs from neighborhoods but to enrich various parties involved in executing the War on Drugs, namely the military industrial complex, government officials and bankers. Criminal bank cartels are the first enablers of every major war in world history, and other than defense contractors, the largest war profiteers of any global industry.

In some instances, the Central Bankers are even alleged to have instigated and encouraged wars to fulfill their own political agendas.In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigley, a Professor of History at Georgetown University, and US President Bill Clinton’s mentor, wrote:“[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the Central Banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”Dr. Quigley stated that the key to the Banking Cartel’s success was to control and manipulate the currency supply of a nation while lying to and informing the public that their government was in control of the currency supply. Thus it is no coincidence that five countries the US has invaded in the last decade – Lebanon, Iraq, Libya, Somalia and Sudan – all are not member states of the Bank for International Settlements (BIS), the Central Bank of Central Banks – while a sixth the US attempted to invade before being rebuffed by Russia’s Putin, Syria, is also NOT a member state of the BIS.Although many American children have falsely been taught in schools that the Revolutionary War started with a protest against prohibitive taxes on tea and stamps known as the Boston Tea Party, Benjamin Franklin correctly explained that it was the inability of the Colonists to get the power to issue their own money, permanently out of the hands of King George III and the international bankers, that was the prime reason for the Revolutionary War.

However Ben Franklin was incorrect about his perceived success of the American Revolutionary War, because the Rothschild banking families still maintained control over America’s currency supply after the so-called “revolutionary” war ended.French leader Napoleon Bonaparte stated:
“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
In response to Napoleon’s rich understanding of the nefarious objectives of powerful banking families, the Rothschild banking cartel funded the Franco-Prussian war to allegedly put an end to Napoleon’s rule of France.During the Civil War, US President Abraham Lincoln stated:
“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”

President Lincoln was murdered on April 14, 1865, less than two months before the Civil War ended.35th US President John F. Kennedy was intent on shutting down the US Federal Reserve and the IRS due to the same realizations of his predecessors that the Central Banking cartel was nothing more than a crime syndicate posing as a legitimate entity and signed Executive Order 1110 on June 4, 1963 that stopped the creation of US Federal Reserve Notes, removed the power of the Rockefellers, JP Morgan, Rothschilds, Warburgs, et al from creating currency in the United States, and returned the power of coining currency to the US Treasury, with the intent of forever retiring criminal fractional reserve currency from use inside the United States. Just five months later, JFK was murdered and his successor, Lyndon B. Johnson, immediately cancelled Executive Order 1110 and reinstated criminal fractional reserve banking in the United States.

To this day, the private banking families that own the US Federal Reserve are the principal financiers of all modern wars, including wars in Libya, Somalia, Iraq, Afghanistan, etc. , providing the war appropriation funding to governments for which governments must pay these bankers interest. When estimates of the US-Iraq War alone have been in the $2 trillion range, it is self-evident that bankers are making out like bandits from funding such wars. Furthermore, as Central Bankers create massive amounts of money (debt) out of thin air to fund major wars, it is self-evident that the creation of 2 trillion new dollars just to fund the Iraqi War has a hugely negative impact upon world citizens as it destroys the purchasing power of all existing dollars in circulation. In other words, every major war leaves the citizens of the nations involved in that war, as well as all global holders of the two currencies used in the warring nations, poorer and in a worse economic state.

Though it is beyond the scope of this article, if you research current global geopolitical tensions between Russia, China and the US by following the trail of money, you will discover that this too has originated from disputes over the desire of Federal Reserve bankers to maintain US dollar hegemony and to prevent the petro-Yuan from replacing the petro-dollar in international trade.

Furthermore though we have informed you earlier in this article that Pablo Escobar was believed to have been responsible for over 4,000 murders whereas El Chapo Guzman was believed to have been responsible for over 80,000 murders, these despicable inhumane statistics still pale in comparison to the more than 4,486 US soldiers killed, more than 1 million Iraqis killed, 3.5 to 5 million refugees, and 15 million Iraqis living in poverty, created from the singular US-Iraq War (Source:

Since Drug Wars to bring down Pablo Escobar don’t come anywhere close to creating the massive level of debt from just one war that Central Banks fund, nor do they come close to the numbers of murders that intense political wars cause, it is apparent that not even Drug Lords can compete with Bank Lords when it comes to spreading misery through the vehicle of global war.Just a hundred years ago, it was common knowledge among the people that any war in which their leaders entangled them was going to cheapen the currency held in their savings, and consequently, the majority of people always fiercely contested every war and insisted on diplomacy over war whenever possible.

Today, it is a sad state of affairs when bankers, through the vehicle of nationalism, have been able to convince people to cheer for their own economic demise, as state announcements of war against other nations are often met with zombie-conditioned, nationalistic chants of “[insert country name here]” versus the thoughtful intelligent protests over currency devaluations that used to meet every single build-up to war just a couple of generations ago.

In conclusion, we have summed up the societal value of a drug cartel like Pablo Escobar’s cocaine empire versus the societal value of Global Banking/ Central Banking Crime Syndicates in the below global bank CEOs do more harm to society than drug lords?In every category above, the Drug Lord causes less damage to humanity than Bank Lords. When the negative social value of a violent murderous Drug Lord can be successfully argued to be far less than the negative social value created by a sociopathic Bank Lord, we have truly reached the crossroads to determine our future. Either we all stand united and take action starting today to topple the current immoral and misanthropic global banking system, or we resign ourselves, our children and our grandchildren to another century of slavery and tyranny.

The collective choice is ours to make.If you really care about the future of this world and the future of your children and grandchildren, I implore you to please send this article to every single person you know that works for a large global bank to enlighten them about the atrocious, horrific crimes that are being committed by their leaders. Robert Mazur, an anti-money laundering expert that works closely with US law enforcement agencies is on record as stating that
“the only thing that will make the [bank CEOs] properly vigilant to what is happening is when they hear the rattle of handcuffs in the boardroom.”

As there could not have possibly been a stronger, air-tight case made in the favor of pre-meditation and prior knowledge of money laundering against HSBC CEO Stuart Gulliver and other top executive HSBC bankers, and even this “can’t fail” case failed to jail any HSBC banker,
it is obvious that the only way to stop the crimes of the new Bank Lords is through grass-roots activism.

As I have repeatedly stated in this article,
when the Bank CEOs know that there is zero risk of going to jail, even after they are caught, or of suffering any negative repercussions from continuing to bathe in blood money, they will never cease engaging in the types of crimes that drags the world further into darkness

And even if Nanex’s Eric Scott Hunsader did say tongue-in-cheek that he would
“put everything he had in Goldman Sachs because these guys can do whatever they want”
after listening to the secret tapes whistleblower Carmen Segarra made of her conversations with her bosses and between her colleagues and Goldman Sachs executives, there are surely a lot of people that will act on such knowledge to help these Bank CEOs become even more powerful and wealthy (i.e. buying their stock instead of divesting, closing deals with them, etc.).

In fact, today’s Bank Lords enjoy a level of special immunity from prosecution against their crimes that no Drug Lord in history ever was able to secure, and this makes the Bank Lords even more powerful than the Drug Lords they are replacing in the global crime syndicate. And this is why only we can really force significant change and stop the transformation of the big bank CEOs into the next Pablo Escobars and El Chapo Guzmans. Please participate in raising awareness about this extremely important issue and help us to light up the darkness by sending this article to every friend or acquaintance you know that works for a large global bank and ask them to follow their consciousness and morality.About the author: JS Kim is the Managing Director of SmartKnowledgeU, a fiercely independent investment research, consulting and education firm.

Learn how to combat banking corruption with targeted wealth preservation strategies and read our SmartWealth fact sheet to learn how you can win a free membership to our newest service, the SmartKnowledgeU SmartWealth Progra (an alternative educational program that breaks down how global capital markets really operate), coming soon. Follow us on Twitter, subscribe to ourYouTube Channel and join our LinkedIn group. ... rug-lords/
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Re: Financial crime more than every other crime combined

Postby admin » Fri Oct 17, 2014 3:55 pm

Crime rates in Canada drop but cost of crime rises to $85 billion in one year
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Media Contacts: Paul Brantingham
Stephen T. Easton
Release Date: October 16, 2014
VANCOUVER—Despite a decline in the crime rate, crime cost Canadians $85 billion in 2009 (the latest year with comprehensive data) including $47 billion incurred by crime victims, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

The study, The Cost of Crime in Canada: 2014 Report (link at end of this post), measures the overall costs of police, courts, prisons, rehabilitation and education. And the varied costs incurred by crime victims due to stolen or damaged property, crime prevention, lost health and productivity, and less tangible costs associated with anger, frustration and fear.

“Unfortunately crime is a fact of life, but to understand whether we spend too little or too much on fighting crime, we need to understand the full costs,” said Stephen Easton, Fraser Institute senior fellow, professor of economics at Simon Fraser University, and lead author of the study.

Although the Canadian crime rate fell 27 per cent between 2002 and 2012, crime costs increased dramatically.

For example, policing costs jumped 43 per cent from $8 billion in 2002 to $11.5 billion in 2012, while corrections costs (prison, parole, etc.) rose 32 per cent from $3.6 billion to $4.8 billion over the same period. Additionally, the cost of legal aid for people who can’t afford legal representation in criminal cases rose from $322.1 million (2012 dollars) in 2002 to $430.7 million in 2012.

The study also found that while the number of criminal cases completed in Canadian courts over the past 15 years has remained relatively stable, the proportion of cases taking more than a year to complete doubled from eight per cent to more than 16 per cent. For example, the proportion of homicide cases that took more than a year to complete rose from 10 per cent in 1994/95 to 49 per cent in 2009/10.

“The costs of crime are rising in part because the Supreme Court of Canada has imposed a set of evolving requirements on the police and prosecutors that make it more expensive to capture and prosecute criminals,” Easton said.

While the study examines the overall cost of crime in Canada, it pays special attention to crime victims, outlining victim profiles based on crime statistics.

For example, the average age of a violent crime victim is 32. Approximately 50 per cent of attempted murder and robbery victims are under the age of 24. Most other violent crimes and property crimes (i.e. vehicle theft) disproportionately affect Canadian males (for example, 64 per cent of assault victims are male), yet approximately 72 per cent of sexual assault victims are female.

“As Canadians, we must ensure that our criminal justice system works fairly and efficiently—crime victims deserve nothing less,” Easton said.

“When making spending decisions on crime prevention, prosecution and punishment, governments across Canada need to clearly understand the potential effect of those decisions, for the sake of taxpayers, crime victims and their families.”

Screen Shot 2014-10-17 at 4.46.04 PM.png ... x?id=21877 ... a-2014.pdf COST OF CRIME

(advocate comments: University studies by reputable experts put the cost of investment deception and the taking advantage of the vulnerability of consumers by giant banks and investment dealers, at more than $25 billion dollars JUST in the area of mutual fund products alone. (Link to 2007 Canadian U of T study “The $25 Billion Dollar Pension Haircut”, here:

Adding in things like exempt market securities (billions), and toxic investment products which receive a free pass (legal exemption) from the Securities Acts adds in billions more. (Sub-prime Asset Backed Commercial Paper in Canada alone pocketed $35 billion of Canadians money) These the tip of the iceberg. It leads one to conclude that investment firms in Canada are doing as much financial damage to Canada using deceptive or fraudulent practices, as the economic damage done by each and every other crime in the country combined. No wonder there is so much "distraction" on TV, the financial powers have a lot to cover up……:) See various articles and studies further in this topic for similar views……for example the next article by financial journalist Paul Farrell of Marketwatch saying this:
"10 ways Wall Street skims $100 billion of your money"
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Re: Financial crime more than every other crime combined

Postby admin » Thu May 15, 2014 9:36 pm

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May 16, 2014, 12:01 a.m. EDT
10 ways Wall Street skims $100 billion of your money
Commentary: Stop paying excessive fees, do your own investing

By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Wake up America, you’re wasting your money paying big advisory fees for hot tips on the stock-market casino. The Wall Street Journal just hammered home my point with this scary comparison:

Big advisory fees cost Americans $100 billion a year in lost profits.

Put $200,000 in stock ETFs averaging 0.04% fees and you’d have $2.0 million for retirement in three decades. But put the same $200,000 in mutual funds charging the industry average annual fee of 1.25%? You’d only have $1.4 million in 30 years.

Get it? You’d lose $600,000. You’d have $600,000 less for retirement. You’d lose but some clever advisers would pocket your $600,000 into their retirement accounts.

Wake up! It’s time to do it yourself, invest and manage your assets without paying big fees for advice. Why? Most of Wall Street’s advice is not only too costly, it’s unconscionable and usually not worth much. To see why, read these 10 warnings and tips:

1. The one big secret to successful investing—low expenses

If you remember nothing else, burn this into your brain. When we published “The Lazy Person’s Guide to Investing” one of the most valuable tips was from a study the Financial Research Corporation did for the industry insiders. They studied five fund categories: domestic equities, international-global, corporate bonds, government bonds and tax-free securities. Eleven predictors were tested: Past performance, Morningstar ratings, expenses, turnover, manager tenure, net sales, asset size, and four risk/volatility measures, alpha, beta, standard deviation and the Sharpe ratio.

Conclusion: only one had any predictive value: the expense ratio. All other predictors turned out to be unreliable, including Morningstar’s ratings and the Sharpe Ratio developed by a Nobel economist. Bottom line: pick cheap funds, no-load index funds.

2. American investors are losing over $100 billion annually to Wall Street

The financial industry has no moral compass, no integrity. You can’t trust them. Their total focus on getting rich is reflected in Jason Zweig’s Journal column, “Investors: How Dumb Are You?”: “The average investor in all U.S. stock funds earned 3.7% annually over the past 30 years.” That’s a third of the S&P 500’s 11.1% annual returns. Yes, stock funds have underperformed the market about “7.4 percentage points annually for three decades, according to Dalbar, a financial-research firm in Boston that has updated this oft-cited study each year since 1994.”

Yes, you lose $600,000. But Wall Street’s casino just keeps scamming your funds. Yes, massive sums of money. The S&P 500’s total capitalization is $16.7 trillion. So with Wall Street skimming 7.4% annually, American investors are losing over $100 billion from their retirement portfolios every year.

3. Vanguard’s Bogle warns: Wall Street is a rigged casino, get out

So why do Wall Street, all the mutual fund managers and the entire financial-advice industry get away with running what amounts to a rigged casino? More importantly: Why do so many of America’s 95 million investors let them get away with it? Vanguard’s Jack Bogle has been asking these questions for decades. In his classic, “The Battle for the Soul of Capitalism,” Bogle called this loss of a moral compass, “mutant capitalism.” He sees financial markets as a gambling casino with millions of “croupiers” manipulating the gaming tables 24/7, skimming billions off the top.

4. Advisers have no stock-picking skills

Actually it’s worse. Nobel economist Daniel Kahneman also used the casino metaphor in “Thinking, Fast and Slow.” Based on “50 years of research” he found that the “stock-picking skills” of managers and advisers is “more like rolling dice than like playing poker.” Their picks are no more “accurate than blind guesses.” In fact, “this is true for nearly all stock pickers ... whether they know it or not ... and most do not.”

5. Markets are notoriously unpredictable, irrational and dangerous

Wharton School of Finance economist Jeremy Siegel, author of “Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies,” researched 120 of the biggest up and biggest down days in the stock market over the last two centuries. Guess what? In only 30 of those big-move days did Siegel find any reasons for the market’s movement. In other words, 75% of the market’s biggest twists and turns in history were irrational and unpredictable black swans. Wall Street’s just guessing.

6. The more you actively trade, the less you earn

You think trading will bring you bigger profits, peace of mind for retirement? Nope. For six years University of California behavioral finance professors Terry Odean and Brad Barber researched 66,400 portfolios with a big Wall Street firm. They found three key factors that resulted in substantially reducing investor returns: transaction costs, stock-picking skills and taxes. Active traders averaged 258% portfolio turnover annually. But they earned seven percentage points less annually than buy-and-hold investors whose average turnover was a mere 2%.

7. Online trading makes it easier to lose, faster and even more

Another Odean-Barber study shows that investors who converted from off-line to online trading saw their returns drop substantially. Before going online they were beating the market by 2%. Afterwards they were losing, under the market by 3%. Stay out. Before one of the largest online discount brokers, Ameritrade, went public, the founder, billionaire Joe Ricketts, told Fortune: “The best thing, really, for an investor to do is buy a good company and hold it ... Trading often and heavy is not something that makes you a lot of money. That’s contrary to my own interests, but it is the truth.”

8. Investors encouraged to buy high/sell low, losing at top and bottom

Your trading and stock-picking skills are probably as bad your adviser’s. A key Morningstar study concluded that investors tend to get in and out of the market at the wrong time, buy high, sell low and lose. They go in at the top. Get out at the bottom. Irrational exuberance creates a buying frenzy at the top. Investors jump in. They lose. Then hang in there as the market drops, buying on dips. More drops. Panic, fear sets in, they sell at the bottom. Lose. Warning, Playing in the market casino is a fool’s game, a waste of your time. Buy and hold … and hold.

9. Warning, your brain’s a saboteur and Wall Street’s manipulating it

One behavioral-finance study reported in Money magazine concluded that 88% of investors experience a phenomenon psychologists call “optimism bias,” overconfidence. Then, we make bad investment decisions taking on too much risk, and lose. Then we hide that reality, lie to ourselves about how bad it wasn’t. Over half the overconfident investors who thought they were beating the market in the recent bull, were lying to themselves, underperforming by 5% to 15%. But could not admit failure. Our brains are too often our worst enemies.

10. Most stock market day traders really don’t make much money

Trading is not the get-rich-quick scheme that the overoptimistic newsletter gurus want you believe. Yes, you can trade online for a few bucks a pop. But you can still make lousy picks. Lose fast and furious. Other Odean-Barber research reveals that as many as three-quarters of traders lose money. And in the end even the rare successful trader rarely make more than $100,000 a year, averaging half that. As David Dreman put it in his “New Contrarian Investment Strategy,” “Market timers, if they don’t die broke, rarely beat the market.”

Even the best professionals don’t trust their own ability to predict the market. Like Ted Aronson. His firm manages a $24 billion institutional fund. But his family’s taxable money is invested in low-cost index funds, his Lazy Portfolio. Asked if investors should gamble in Wall Street casino, he said: “For good reasons and bad, I’d hold tight. The good include my faith in capitalism and its ability to weather a storm, even one of biblical proportions. The bad reason is, I have no faith in my ability to time this sort of thing. Even if I got out in time, I probably wouldn’t be able to correctly time getting back in!”

Yes, very simply, Wall Street is a high-risk gambling casino, where the house always wins. You can’t trust it. They are skimming over $100 billion from America’s 95 million Main Street investors every year. My advice to investors is stop paying your heard-earned money to advisers with no real stock-picking skills, whose advice is “more like rolling dice than like playing poker,” and no more “accurate than blind guesses.”

Take charge of your future, hone your own skills. You’ll save money, you’ll have a bigger nest egg for the future. ... genumber=2
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Re: Financial crime more than every other crime combined

Postby admin » Thu May 15, 2014 9:26 pm

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1. Did you know that when the "Minimum Sentences for White Collar Crime" Bill C21 was passed with this government, that investment bankers and those who deal in public markets were able to "delete" the section of the criminal code of Canada, as it applied to this very bill. They were able to "negate" the jail term provisions that might apply to public markets. I was in Ottawa, testifying on the bill when it was happening. see this video for a quick and dirty synopsis 1 minute 30 seconds

2. Were you aware that 13 securities commissions in Canada are 100% paid by investment industry fees and charges?

3. Did you know that in Alberta and Ontario that top Securities Commission people earn over $700,000 per year, and in Alberta the top four employees shared $2 million between them? For public employees?

4. Were you aware that securities commission officials will grant "exemptive relief" to our provincial laws, to securities dealers in order to sell defective, toxic products to consumers, or to give faulty advice, allowing dealers to make multiple-times more money?

5. Did you know that these exemptions are hidden from input and from view by the public who purchases the investments which are magically turned from illegal to legal with a securities lawyer's pen?

6. There are approximately 500 such exemptions granted by these securities commissions each year, and in no cases will the securities commission show cause, process, and proof of no harm to the public interest from these legal games.

7. More recently, "exempt market securities" have lifted over $2 billion from the hands of the public, into the hands of fraudsters. Secondary effects show that some well connected lawyers and accounting firms are realizing as much or more money from the "rubble" (receivership process) than even did the original fraudsters.

8. The largest crime in Canada was $35 billion gone in sub prime mortgage securities, which were illegal for sale in Canada, were it not for the saving grace of friendly securities regulators, who granted exemptive relief so these products could be sold, and Canadians victimized.

9. $2 billion was taken from the PSPP (the pension plan of retired judges and RCMP) at the same time that judges were granting "immunity" from prosecution to those responsible (I assume they do not know to this day, but the PSPP annual report for 2008 includes the write downs)

10. Regulators turn a blind eye daily to 150,000 investment salespersons in Canada, who do NOT carry the proper license nor fiduciary duty to call themselves "advisers", under the law, however by spelling their title "advisor" with an "o" rather than an "e", they may be able to skirt the spirit of this legal license category and fool the public into a false sense of trust. A University of Toronto study puts the harm to Canadians in just the retail sale of mutual funds alone, at about $25 billion each year gouged out of Canadians who are not aware of this "adviser/advisor bait and switch". video concept here one minute and 39 seconds and this one at 3 minutes length

I find myself rather blown away by the ability of the financial industry to "own" the media in Canada, with their advertising dollars, and I am seeking ways and means of working outside the box to get this info out to the public. It is certainly not as easy as simply pointing these things out. The media has a part to play in disclosure.

Thanks for any help you can be.

Cheers and best regards


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Re: Financial crime more than every other crime combined

Postby admin » Thu Feb 13, 2014 9:15 pm

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Study: SEC Fiduciary Delay Costing Retirement Investors $1 Billion per Month

Two years ago, the SEC’s botched proposal for a uniform fiduciary standard was greeted with a uniform chorus of derision from both Congress and the brokerage industry. The biggest complaint was the alleged “cost” to investors should the SEC hold brokers to the same standard as it holds Registered Investment Advisers under the 1940 Investment Advisers Act. The SEC asked the industry to show evidence of this cost, but, sheltered by the bipartisan boos from the political realm, never seemed to provide the promised smoking gun. It turns out, a much publicized academic research study released last month may have finally supplied the much anticipated evidence of cost – but with a surprising twist.

The paper, “It Pays to Set the Menu: Mutual Fund Investment Options in 401k Plans,” (Pool, Veronika Krepely, Sialm, Clemens and Stefanescu, Irina, January 20, 2013), is the result of work done by researchers from Indiana University and the University of Texas at Austin. Much of the media reporting focused on the study’s confirmation of what many had long suspected: trustees who were allowed to engage in self-dealing transactions often do, and often at the worst possible time. Pool et al concluded trustees with a conflict of interest are more likely than unconflicted trustees to keep and to add poorer performing affiliated funds. Worse, employees continued to invest in these poorer performing options even though they had better alternatives.

This conclusion is similar to that drawn by “Broker Incentives and Mutual Fund Market Segmentation,” (Diane Del Guercio, Jonathan Reuter, Paula A. Tkac, NBER Working Paper No. 16312, August 2010). This paper found investors earned, on average, 1% more per year by buying mutual funds directly instead of through a broker (you can read the full report in our earlier story, “Does New Study Seal the Deal for Fiduciary Standard – or Just Warn Plan Sponsors?”, January 19, 2011). “Both studies look at agency problems in delegated portfolio management but they focus on very different aspects (brokers vs. 401k trustees),” says Irina Stefanescu, Assistant Professor of Finance at Indiana University’s Kelley School of Business and one of the co-authors of last month’s study.

The new study concentrates only on listed trustees. “We collected the names of the ‘plan trustees’ as they are disclosed in the 11-K,” says Stefanescu. “We have not focused on conflicted advisors.”

That conflicts-of-interest exist in the 401k service provider world isn’t surprising. “Unfortunately, it is quite common for mutual fund companies that also act a ‘non-discretionary’ plan trustee to encourage the use of their own proprietary funds,” Houston-based Robert A. Massa, Chief Investment Officer at Ascende Wealth Advisers, tells He continues, “To address this problem, I take a considerable amount of time to educate the plan committee members on delineating the differences between the services provided by the plan recordkeeper, the plan trustee and the investment provider(s). Most committee members have a hard time understanding the difference. If they hire a mutual fund company to handle all plan services on a turn-key basis, it can be difficult for the committee members to fully understand the fees and services provided because of the one-stop shopping approach. But this is the core problem. In these fully-bundled, one-stop-shopping arrangements, employers can usually offer a 401k program with great educational materials and online technology, but if they fail to perform their due diligence, they can end up with a stable of funds that may underperform the market.”

“In an ideal world, all fiduciaries that act for a plan under the auspices of ERISA should operate independently,” says Gabriel Potter, Senior Researcher at Westminster Consulting, LLC in Rochester, New York. Potter adds, “Individual advisors acting as consultants may adopt the title of ‘fiduciary’ without really understanding the legal ramifications of the decision. Investment management firms often take up the fiduciary mantle when acting as a consultant, but may be incapable of separating themselves from the inherent conflict-of-interest. It is the advisors’ responsibility to understand if their duties preclude them from being a fiduciary adviser, but the roles of a fiduciary vs. a non-fiduciary individual advisor are sorely misunderstood, even by professionals.”

Making their conclusions even more dire, the study’s sample does not include conflicts-of-interest resulting from brokerage-based “advice.” Paula Hendrickson, Director Retirement Plan Consulting at First Western Trust in Denver, Colorado says, “Many plan sponsors join forces with a brokerage firm to develop their investment strategy and the broker has an inherent conflict-of-interest.”

But the study does reveal something that stunned even the researchers. “Perhaps the most surprising result was the future underperformance for the lowest performance decile funds,” says Stefanescu. The study concludes “We estimate that on average they underperform by approximately 3.6% annually on a risk-adjusted basis. This figure is large in and of itself, but its economic significance is magnified in the retirement context by compounding. Our results suggest that the trustee bias we document in this paper has important implications for the employees’ income in retirement.”

Just how economically significant is this result? asked Stefanescu if the authors came up with a dollar figure, but she told us, “Translating these percentages into dollars depends on various assumptions on holding periods and compounding horizons.” Still, that doesn’t prevent anyone from using published data to come up with a number.

And that’s precisely what we did.

According to the January 24, 2013 entry of January Market Size Blog, U.S. retirement assets (including IRAs, 401k plans and 403b plans) total $10.3 trillion at the end of the third quarter in 2012. The universe of trusteed plans in the “It Pays to Set the Menu” paper indicates 33% of the assets are held by “conflicted” trustees. We’ll assume this number for 403b plans and IRAs as a way of accounting for conflicted brokers. (Please note, the 33% number does not mean only 33% of the plans are advised by conflicted vendors, it only means the actual conflict occurs in only 33% of the assets. In other words, a conflicted adviser is likely to also put assets into unaffiliated funds.) A third of the total U.S. retirement assets is $3.4 trillion. Now, we take 10% of that reflecting the lower performing decile of funds and that’s equal to $340 billion. Finally, we take the average underperformance of 3.6% annually and you get $12.3 billion of lost performance each year.

That’s more than a billion dollars a month, or $24.6 billion since the adoption of a uniform fiduciary standard was first proposed.

That’s the real dollar price tag the SEC’s inaction is costing U.S. retirement investors. Go ahead. Check the math. Refine the assumptions. You’re still talking huge numbers.

Elle Kaplan, CEO & Founding Partner of Lexion Capital Management LLC in New York City explains the true tragedy of this wholly unnecessary delay as she expresses concern the indictment of studies like this might take the bloom off the rose of the 401k plan. She says, “Embedded in the term ‘conflict-of-interest’ is the key word: conflict. The fact these conflicts exist is a major problem and should be extremely troubling to all 401k plan advisers. If we are encouraging people to save for retirement, but then we give them options that are poor investment vehicles with bad returns, we are hurting the very people we are supposed to help. We are letting a few bad apples get in the way of delivering responsible options for retirement planning.”

If you enjoyed this article, you’d probably enjoy Mr. Carosa’s latest book, 401(k) Fiduciary Solutions. Published by Pandamensional Solutions, Inc., this highly recommended book contains 320 pages of insights from some of the industry’s most well-known thought leaders. 401(k) Fiduciary Solutions covers all 401k compliance issues in a single reference source. It is written for plan managers, sponsors and others with 401k plan fiduciary responsibilities. Click here to order it now direct from the publisher’s site on ... gn=012214z

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Re: Financial crime more than every other crime combined

Postby admin » Sun Sep 11, 2011 8:57 am

cda v USA enforcement.jpg
If the average property crime in Canada carries a cost to society (I recall seeing this figure at Justice Canada or Stats Canada site) and there are some 90,000 property crimes each year.........then the sale of toxic sub prime mortgage investments in Canada was white collar crime equal to 6.4 million property crimes.

SIX POINT FOUR MILLION individual crimes..........or the financial equivalent of same......done by financial Mega Criminals, our own white collar banking and financial people, assisted by lawyers, accountants, regulators, and the usual cast of characters. Not one single criminal charge among the total.

Imagine if you could figure out how to commit the equivalent of six point four million crimes......and know that no one would ever get caught and no one would go to jail. (this was just one type of investment, non bank ABCP investments, and in no way reflects the total amount of financial damage done each and every year by these same Mega Criminals)

Lawyer Purdy Crawford (head of the ABCP restructuring process) went into court arguing for immunity from criminal and civil prosecution for the toxic sub prime mortgage paper collapse. He obtained immunity from civil prosecution for all involved, but did not receive immunity from criminal. ( he was also involved in the "largest crime in Canadian history", according to the RCMP, which resulted in a company he headed (Imperial Tobacco under Imasco Ltd) paying a $1 billion dollar fine for tobacco smuggling)

(Conrad Black was able to do the equivalent damage of 1200 or 12,000 property crimes, depending upon which amount of his crimes you work on, the amounts he was successfully prosecuted on, or the alleged amount he actually lifted. He was not able to be prosecuted in Canada, but had to be brought to justice by US authorities.)

RCMP IMET managed to bring together five (5) convictions for white collar crime by the IMET organization since it was began eight years ago, and in no case have I seen convictions, prosecutions, or even investigations undertaken on Mega Criminals beyond the $100 million mark.

My conclusion is that if you get yourself into the position of a Mega Criminal in Canada, (too big to prosecute), then financial crime is free from consequences. Unfortunately, this is not only the rantings of a more than slightly disturbed individual, but appears to be somewhat supported by the facts.
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Re: Financial crime more than every other crime combined

Postby admin » Sat Jul 09, 2011 9:37 am

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"Self Regulation is De-criminalization" ... wanted=all
As Wall St. Polices Itself, Prosecutors Use Softer Approach

Daniel Rosenbaum for The New York Times
“Traditionally, a bank would tell the Department of Justice when an employee engaged in crimes, but what do you do when the bank itself is run by a criminal enterprise?” said Solomon L. Wisenberg, former chief of a Justice Department financial institutions fraud unit.
Published: July 7, 2011

As the financial storm brewed in the summer of 2008 and institutions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.

Matt York/Associated Press
Beazer Homes ran afoul of the Department of Housing and Urban Development over its mortgage practices. But the Justice Department came to an agreement with the company, ending HUD's inquiry.

Daniel Rosenbaum for The New York Times
"They threatened the HUD office of the inspector general that we would not be allowed to go forward with our investigation of executives if we didn’t agree to their settlement," said Kenneth M. Donohue, former inspector general of HUD, speaking about the Justice Department.
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Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.

Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.

The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.

But this approach, critics maintain, runs the risk of letting companies off too easily.

“If you do not punish crimes, there’s really no reason they won’t happen again,” said Mary Ramirez, a professor at Washburn University School of Law and a former assistant United States attorney. “I worry and so do a lot of economists that we have created no disincentives for committing fraud or white-collar crime, in particular in the financial space.”

While “deferred prosecution agreements” were used before the financial crisis, the Justice Department made them an official alternative in 2008, according to the Sullivan & Cromwell note.

It is among a number of signs, white-collar crime experts say, that the government seems to be taking a gentler approach.

The Securities and Exchange Commission also added deferred prosecution as a tool last year and has embraced another alternative to litigation — reports that chronicle wrongdoing at institutions like Moody’s Investors Service, often without punishing anyone. The financial crisis cases brought by the S.E.C. — like a recent settlement with JPMorgan Chase for selling a mortgage security that soured — have rarely named executives as defendants.

Defending the department’s approach, Alisa Finelli, a spokeswoman, said deferred prosecution agreements require that corporations pay penalties and restitution, correct criminal conduct and “achieve these results without causing the loss of jobs, the loss of pensions and other significant negative consequences to innocent parties who played no role in the criminal conduct, were unaware of it or were unable to prevent it.”

The department began pulling back from a more aggressive pursuit of white-collar crime around 2005, say defense lawyers and former prosecutors, after the Supreme Court overturned a conviction it won against the accounting firm Arthur Andersen. That ended an era of brass-knuckle prosecutions related to fraud at companies like Enron.

Another example of this more cautious prosecutorial strategy: Government lawyers now go to companies earlier in an inquiry, and often tell companies to figure out whether improper activities occurred. Then those companies hire law firms to investigate and report back to the government. The practice was criticized last year when the Justice Department struck a settlement with Beazer Homes USA, a home builder accused of mortgage fraud.

This “outsourcing” of investigations — as some lawyers call it — has led to increased coziness between the government and companies, some critics say.

In banking, the collaboration is even stronger, dating to the mid-1990s when banks were asked to regularly report suspicious activities to the Treasury Department, an effort that aimed at relieving regulators of some of their enforcement loads. But it gave regulators a false assurance that banks would spot and report all wrongdoing, former investigators say. Moreover, companies are not as likely to come forward with evidence related to senior executives or to widespread patterns of misbehavior, some academics say.

Intended to make the most of the government’s limited investigative resources, the government’s cooperation with corporations and industry groups can work well and save money when business hums along as usual. But some veterans of government prosecutions question such collaboration in financial crisis cases, and contend they should have been pursued more aggressively.

“Traditionally, a bank would tell the Department of Justice when an employee engaged in crimes, but what do you do when the bank itself is run by a criminal enterprise?” said Solomon L. Wisenberg, former chief of the financial institutions fraud unit for the United States attorney in the Western District of Texas in the early 1990s. “You have to be able to investigate without just waiting for the bank to give you the referral. The people running the institutions are not going to come to the D.O.J. and tell them about themselves.”

A Clash of Agencies

Beazer Homes, based in Charlotte, N.C., became one of the nation’s 10 largest home builders in the 2000s — in large part because of mortgage lending options that attracted buyers. But its mortgage business eventually attracted prosecutors, too.

In March 2007, the inspector general and officials of the Department of Housing and Urban Development began investigating claims that Beazer had engaged in mortgage fraud, causing losses to the Federal Housing Administration’s insurance fund that covered mortgages when buyers couldn’t pay.

Investigators found that Beazer had been offering a lower mortgage rate if buyers paid an extra fee, but then not giving them the lower rate. And it was enticing homeowners by offering down payment assistance, but not disclosing that it then raised the price of the house by the same amount.

The Beazer board’s audit committee hired the law firm of Alston & Bird to conduct an internal investigation. Documents supplied to Congress by HUD show that Justice Department officials advised HUD investigators not to interview borrowers or former Beazer employees until Alston & Bird completed its review.

In April 2009, justice officials notified HUD that a deferred prosecution agreement with Beazer had been reached — the sort of deal that Sullivan & Cromwell had celebrated in its client memo a year earlier — essentially shutting down the HUD investigation.

Beazer agreed to pay consumers and the government as much as $55 million under the deal. It also paid approximately that amount to Alston & Bird, investigators found. While a member of the justice team told HUD that criminal proceedings would be forthcoming against individuals at Beazer, the documents show, there has been only one indictment: of Michael T. Rand, the company’s former chief accounting officer, whose trial is to begin this fall.

A year after the settlement, Kenneth M. Donohue, the inspector general of HUD at the time, raised questions about its handling. He said he was disturbed by the interference by the Justice Department and its calls to stop pursuing Beazer executives so the deferred prosecution deal could be completed. “As a law enforcement official for over 40 years,” Mr. Donohue wrote in a letter to Eric H. Holder Jr., the attorney general, “I have never witnessed a like action in any of my varied dealings.”

In a recent interview, Mr. Donohue, now a senior adviser at the Reznick Group, an accounting firm in Bethesda, Md., said of the Justice Department: “The most important point of this whole thing is the fact that they threatened the HUD office of the inspector general that we would not be allowed to go forward with our investigation of executives if we didn’t agree to their settlement.”

David A. Brown, acting United States attorney on the case, said: “What we do is work cooperatively as a team in conducting these investigations. We don’t tell agencies to stand down when they are working as part of the team.” He said that the investigation was continuing, and that the Justice Department was proud of the deferred prosecution agreement and the restitution Beazer paid, which more than covered the losses of the Federal Housing Administration fund.

Beazer did not respond to an e-mail, and Alston & Bird did not return a call seeking comment.

Ms. Finelli, the department’s spokeswoman, said that deferred or nonprosecution agreements had led to charges against individuals in many cases; of the 20 companies she cited, three were financial companies. But none were cases related to the financial crisis.

Still, some lawyers applaud the closer relationship between the government and business. “Given the scanty resources that have been committed to corporate crime enforcement, I think the government’s leveraging of its prosecution power from corporations and their lawyers has been critically important,” said Daniel C. Richman, professor of law at Columbia and a former assistant United States attorney in New York.

But Professor Richman added that the government should have “a much more developed, funded and empowered S.E.C., Federal Reserve, E.P.A. and other agencies to do regulation, to do enforcement and feed cases where necessary to criminal prosecutors.”

Changing Course

The names have become synonymous with corporate wrongdoing — and forceful prosecution: Not just Enron, but also WorldCom, Tyco, Adelphia, Rite Aid and ImClone. In the early part of the last decade, senior executives at all these companies were convicted and imprisoned.

But by 2005, a debate was growing over aggressive prosecutions, as some business leaders had been criticizing the approach as perhaps too zealous.

That May, Justice Department officials met ahead of a session with a cross-agency group called the Corporate Fraud Task Force. It was weeks after Justice Department lawyers had presented to the Supreme Court their case against Arthur Andersen, which was seeking — successfully, it would turn out — to overturn its criminal fraud conviction in a prominent case.

In the meeting, the deputy attorney general at the time, James B. Comey, posed questions that surprised some attendees, according to two people there who asked to remain anonymous because they were not supposed to discuss private meetings.

Was American business being hurt by the Justice Department’s investigations?, Mr. Comey asked, according to these two people, who said they thought the message had come from others. He cautioned colleagues to be responsible. “It was a total retrenchment,” one of the people said. “It was like we were going backwards.”

Mr. Comey said recently that he did not recall this conversation.

Around the same time, the Justice Department was developing instructions on dealing with companies under investigation — particularly companies that work with the government. It issued a memo in 2003 that gave companies more credit for cooperating than in the past. That message was reinforced in another memo in 2006.

As the first memo put it, “it is entirely proper in many investigations for a prosecutor to consider the corporation’s pre-indictment conduct, e.g., voluntary disclosure, cooperation, remediation or restitution, in determining whether to seek an indictment.”

During this period, the Justice Department increased the use of deferred prosecutions or even nonprosecution agreements.

Many well-known companies have benefited. In 2004, the American International Group, the giant insurer, paid $126 million when it entered a deferred prosecution agreement to settle investigations into claims that it had helped clients improperly burnish financial statements.

Deals over accounting improprieties also were struck that year by Computer Associates International, a technology company, and in 2005 by Bristol- Myers Squibb, a pharmaceutical concern. Prudential Financial entered into a deferred prosecution in 2006 over improper mutual fund trading.

No such prosecution deals for large banks have yet arisen out of the financial crisis. Some bank analysts say they may be coming. The government may eventually strike one with Goldman Sachs, which it continues to investigate for its mortgage securities dealings, Brad Hintz, a securities analyst at Sanford C. Bernstein & Company, wrote recently. “If an alleged violation is identified during a Goldman investigation, we expect a reasoned response from the Justice Department,” he added.

Goldman Sachs declined to comment.

The S.E.C. can also file deferred prosecutions, and it sometimes issues reports about wrongdoing in lieu of litigation. It has been increasing the number of reports it files, and is considering issuing one about misleading accounting at Lehman Brothers, Bloomberg News has reported. The S.E.C. did something similar last year to resolve a credit ratings investigation of Moody’s Investors Service. The reports from the commission are intended to give companies guidance on appropriate practices.

Such results provide bragging rights among corporate defense lawyers, according to longtime observers of the legal system.

“The corporate crime defense bar has this down to a science,” said Russell Mokhiber, the editor of Corporate Crime Reporter, a publication that tracks prosecutions. “I interview them all the time, and they boast about how they’ve gamed the system.”

Industry Advantage

Even as companies cooperate with the government, they also work closely with one another, creating industrywide strategies in response to investigations. Legal representatives for Goldman Sachs, Morgan Stanley, JPMorgan Chase and others talk regularly about what they hear from the government, according to lawyers in the industry. They have long held these conversations — known as joint-defense calls — but given the increased cooperation of the government with companies, lawyers can exchange more information.

Goldman’s recent battle against the S.E.C. — in which it agreed to pay $550 million to settle claims that it had misled investors in a mortgage security it sold — was helpful to other banks, according to one lawyer who participates in these calls. On several occasions in 2009 and 2010, after Goldman and its law firm, Sullivan & Cromwell, visited the S.E.C., lawyers representing other banks received intelligence on the government’s areas of interest. The result has often been that banks walk into prosecutors’ offices well-prepared to rebut allegations.

One assistant United States attorney, who requested anonymity because he is not allowed to speak with the news media, said many inquiries had been tabled because banks had such good answers.

“They’ll hire a counsel who is experienced,” said the assistant attorney, who has direct knowledge of cases related to the financial crisis. “They often come in and make a presentation: ‘We’ve looked at this and this is how we see it.’ They’re often persuasive.”

Some defense lawyers say it is easier to make a persuasive case because prosecutors, having becoming more dependent on companies for investigative legwork, are less knowledgeable and thus less likely to counter with evidence they have uncovered.

The process, in the end, is cloaked, some critics say. The Justice Department does not disclose any details about its decision-making in specific cases, such as why it did not charge individuals at a company.

“We will not get an explanation of why there haven’t been prosecutions; at best, we will get a reference back to the Department of Justice manual that leaves the discretion to the prosecutors,” said Professor Ramirez of Washburn University. “The legal representatives will argue that since recoveries can be had by using civil measures, even private litigations, there’s no need to bring criminal measures. I disagree with that very much.” ... wanted=all
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Re: Financial crime more than every other crime combined

Postby admin » Sat Apr 23, 2011 9:22 am

images.jpeg (13.95 KiB) Viewed 29222 times
According to the Canadian Anti Fraud Center (Calgary Herald Sat April 23, 2011), they recorded "$53 million lost due to mass market frauds such as spam email and telephone scams".

Most years I can come up with $35 billion quite easily lost due to predatory investment practices by investment "professionals" in Canada. $35 billion is "systemic", built into the profits of financial pros each year due to the distinct advantages or "decriminalization" that self regulation offers the industry.

First, $25 billion each year is gouged from mutual fund consumers due to monopolistic mutual fund selling and managing practices of the few largest institutions here in Canada. ( source THE $25 BILLION PENSION HAIRCUT, a study by pension expert Keith Ambaschteer, University of Toronto, Rotman School of Business, also backed up by mutual fund fees around the world joint studies done by London School of Economics, Harvard, and Georgia Tech)

Then add in $10 billion each year added costs of having thirteen provincial and territorial securities commissions in an economy the size of Texas. ($10 billion estimate from a study done by Columbia University Prof John Coffee) (do not even want to begin yet counting the damages done by these commissions as they are each paid by the securities industry, and appear to be rather beholden to same) (see )

So we are at $35 billion each year, gouged from Canadians, about $1000 for each man, woman and child in the country. We have not even looked at a single security related fraud, such as a Bre-x ($8 billion), Non Bank ABCP ($32 billion), Nortel ($366 billion), ponzi-like income trusts, or any of the dozens of names found elsewhere in this forum. ( ) We have not looked at the sales tricks of retail commission investment sellers, each and every one misrepresenting themselves as some kind of "pedigreed professional". Each one (four out of five, or nine out of ten depending on which product sold) placing their vulnerable clients into the most expensive investment products they can choose from, in a feeding frenzy of sales commission harvesting. (see tricks of the trade topic on )

Please see some of the following non industry paid web sites for candid information about how your financial health is jeopardized by predatory financial professionals: (read a few of the "cases" BEFORE you invest to see what banks are like "AFTER" they get caught, it aint pretty and it what they promise) a broker tells of his quest to find ethics and integrity inside the indsutry same broker tries to develop "accountability projects" designed to protect the public while holding criminals accountable for their actions (at an altitude where the police and prosecutors are not found) (sorry for the aviation reference)
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Re: Financial crime more than every other crime combined

Postby admin » Mon Feb 28, 2011 11:32 pm

another good explanation of why financial crime pays

"...........the prosecutors, hopefully most prosecutors, are honest if they're playing by the set of the rules; they're hampered by the illegal constraints. The white-collar criminal has no legal constraints. You subpoena documents, we destroy documents; you subpoena witnesses, we lie. So you are at a disadvantage when it comes to the white-collared criminal. In effect, we're economic predators. We're serial economic predators........"

read the whole thing here ... 28-62.html
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Re: Financial crime more than every other crime combined

Postby admin » Mon Feb 28, 2011 10:33 am

FAIR Canada has issued a report entitled "A Decade of Financial Scandals" calling for government and regulatory action to improve prevention, detection and prosecution of financial fraud and to better compensate victims of investment frauds.

"The Canadian regulatory system is complex and fragmented. There are thirteen provincial and territorial securities regulators and two national SROs. In addition, there are many other provincial and federal regulators involved," said Ermanno Pascutto, Executive Director of FAIR Canada." "When it comes to investigation and prosecution of financial fraud, the complexity and fragmentation is far worse. With this bewildering array of regulators, investigation agencies and prosecutors, no one agency has ultimate responsibility for combating investment fraud."

"We make wide-ranging recommendations calling on the Federal and Provincial Governments and regulators to take coordinated action to combat financial fraud" said Mr. Pascutto. "Financial fraud has affected some 10% of Canadians and the system is simply not effective at protecting consumers, punishing fraudsters, or compensating victims."

FAIR Canada studied a cross-section of fifteen cases of financial scandals selected from across the country based on the high profile coverage they garnered, the number of investors affected and the significant amount of losses incurred. Findings from the review of the fifteen financial scams include...

Investment Fraud a Daily Event in Canada

While the FAIR Canada report focuses on fifteen financial scandals over the past decade, one only needs to read the media routinely to see how these types of scandals happen on a daily basis. Here are a few that have come across our desks over the last couple of months:

February 10, 2011 (The Globe and Mail) - BC securities regulator cracking down on fraud

February 9, 2011 (Vancouver Sun) - 'Wealth enhancement expert' drives dairy farmers to the brink

February 9, 2011 (Investment Executive) - Fraud conviction upheld against man who bilked Ontario investors of $40 million

January 31, 2011 (The Globe and Mail) - Bloc takes Tories to task on fraudster's release

January 5, 2011 (Toronto Sun) - Fraudster's sentence a joke - victim

December 22, 2010 (Canadian Business Online) - AMF Launches Suit against Hooshang Imanpoorsaid and Seeks $376,000 in Fines

November 25, 2010 (The Globe and Mail) - How did $170 million go missing?

November 16, 2010 ( - Ontario probes dropped charges in alleged Ponzi scheme

see the original, with links to each story at
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Re: Financial crime more than every other crime combined

Postby admin » Tue Aug 31, 2010 11:35 am

are the on-going trailer fee commissions that your fund manager pays to your salesperson an extremely sophisticated derivative of the definition of “secret commissions” under Section 426 of our Criminal Code because of their lack of dollars and cents amounts transparencies?

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Re: Financial crime more than every other crime combined

Postby admin » Sat Aug 28, 2010 11:55 am

Monday, June 28, 2010 ... -scam.html

SKIM: Skimmed milk refers to milk which has
had the rich cream taken off the top, leaving a
less rich milk product.

For our purposes skimming refers to removing
a hidden fee from a mutual fund portfolio prior
to valuing the portfolio for an investor.

It also leaves a less rich portfolio for investors.

The media and casual investors intently follow the stories of investment scams and how they devastate the lives of investors and their families. It is understandable of course: a good human interest angle will definitely get the attention of readers!

In fact, the damage done by investment scams and frauds is very minor compared to the damage done within the standard “rules of engagement” between investors and investment firms. F.A.I.R. Canada has reported that as little as 2% of the dollars lost in major frauds over the past decade in Canada involved a regulated investment firm. In short the odds of being “scammed” in a recognized mutual fund are near zero. The odds on having your investments “skimmed” however are close to 100%!

THE SKIM: As an investor you put money into a fund to gain diversification and professional management. Those are worthy goals and the fund industry is fully capable of delivering on both fronts. The issue that leads to the skim is putting a value on the services you want. In effect the industry has clouded the process on two key fronts by:

n Adding mandatory “advice charges” to many mutual funds, most often through hidden and excessive sales fees being mislabelled as an advice fee.

n Portraying licensed fund sales persons as “Financial Planners”, “Advisors” or some form of Vice President / Director. These titles imply an advice or planning offering often not available.

The net effect, for most investors, is a steady skimming of your investment portfolio in return for little or no advice or planning services.

In fact, there is no requirement for a fund salesperson (your planner or advisor based upon their job title) to even talk with an investor in order to justify the skimmed fees for “advice”.

You can, in effect, be charged fees for an unlimited number of years without even knowing who your current advisor / salesperson is! Your salesperson could sell their clients to other salespeople and the advice fee continues to be skimmed annually and forwarded to the new “advisor” you have often never even met.

WHAT IS MISSING: At its most basic level, what is missing is the quality professional advice and financial planning most clients need—deserve but cannot identify or articulate without having experienced it. Basic advice such as:

n a detailed financial plan,
n an annual review of the Investment Policy Statement,
n disclosure of material information on changes made in fund management,
n an assessment of client need versus risk
n etc.

All of these would require a salesperson to spend time before a meeting doing preparation, time in a meeting reviewing client requirements and current finances, and post meeting time to implement any required changes. If a salesperson spent 3 hours per client per year doing a proper review then the fee likely could be earned.

Does it happen? No it does not. How do I know? I worked for a major bank with a large financial planning team. The bank would never allow sufficient time to do even a basic annual review. We always had literally thousands of uncompleted reviews and no prospect of ever getting caught up.

Why? Take 250 clients times (x) three (3) hours and you have 750 hours of review work. That is roughly 100 days of work per year.

So, the salesperson gets the fee if they do not do the work and

n they get the same fee if they do complete the work.

How many salespeople do you think will opt to do the work? What if you have 300 or 400 clients? The system clearly cannot work as it is structured.


As an ex-banker I was always amazed that bank robbers would risk up to ten years in jail to rob a bank for $300 (average take from a bank robbery these days is quite low) when instead passing bad cheques/cheque fraud could earn you thousands with virtually no risk of jail time. Only a dummy robs a bank using a mask and a gun these days.

Similarly, I cannot understand why fraudsters would go through the hard work and stress of scamming investors (false documents, false statements, a risky paper trail, high risk of being exposed and charged with a crime),

n when you can legally “skim” investment accounts with fees that add no apparent value and are not required to be disclosed to investors.

What Does Add Up:

Investors pay a number of innocuous sounding fees either directly or indirectly from their investment accounts. Most investors work on a basis of trust and have no clue what dollar amount they are paying in sales commissions nor what they should be receiving for those sales commission fees. This is the environment that makes the skim possible and lucrative.

The average financial planner / salesperson may have a portfolio under administration of $20 million dollars. At a mere 0.5% skim the portfolio is diminished by $100,000.00 per year. Many trailer fees are as high as 1% which translates to $200,000.00 being taken every year from client accounts. There is no accountability that would require any work to be done by the salesperson.

n The money is skimmed by the fund firms and forwarded directly to the salespersons firm.

Many salespeople lock clients into the fund via a deferred sales penalty program for up to seven years. In the simple example given, with a 0.5% trailer fee, the total money skimmed by the average salesperson over that sales cycle will be $700,000.00. Now picture a firm with 1,000 salespeople on staff. I think it becomes clear why fund sales are such a lucrative business and why your salesperson can drive a nicer car than you can.

For those who say, well the salespeople have to eat too – I will remind you of two things:

1. Front-end loaded fees: Salespeople often receive 5% of the invested funds up front from the fund firm. On a $20,000,000 portfolio that is $1 million dollars. The commission is split amongst the 600 or so client accounts of the salesperson and is again a hidden charge.
(Investor Economics data suggests the average portfolio for a salesperson in the advice business is just over $20 million)

2. With the skimmed fees we are talking about a forced, concealed payment for a service that is often neither articulated nor delivered to the client.


We do not have to be skimmed as fund investors. You have several options to help fix the problem.

1. Set clear expectations with your salesperson for what you expect for the fees you pay.

a.) Communication should include monthly updates, and semi-annual conversations as well as at least one face to face meeting every year.

b.) Investment information should include an estimate and explanation of all fees paid from your account, performance results versus a set benchmark, and current versus targeted asset allocations.

c.) Planning information should include a review of your financial situation, income, expenses, and liquidity needs going forward.

2. Ensure that your salesperson has the capacity to handle your account effectively. A salesperson with 100 clients is more likely to have the capacity for a review than a salesperson with 600 accounts. Ask about support staff but remember support staff is to aid with internal paperwork not to handle client reviews.

3. Purchase low cost mutual funds and you will not have as many worries about skimming. You can purchase funds without imbedded advice fees from a number of fund firms and can purchase ETF funds without imbedded advice fees as well. Ditching your advisor / salesperson does not ensure you avoid the skim as discount brokers often take the skimmed fees that normally went to the salesperson.

n That is of course the height of skimming as discount firms are not even licensed to provide any advice to investors.

It is not easy to be a wise investor when the market is such a deceptive place.

It truly is a “buyer beware” experience and not a safe place for those who tend to trust without verifying.

sois mike
Posted by sois mike at 4:18 PM
Labels: hidden fund fees, skimming commissions, trailer fee ... -scam.html
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Re: Financial crime more than every other crime combined

Postby admin » Tue Aug 24, 2010 9:50 am

Screen shot 2010-08-24 at 10.49.30 AM.png

This link will take you to a four minute expose describing exactly how easy it is to gain billions of dollars in an unethical and/or fraudulent manner, and if you are part of the "right" system, you will be completely above examination. Above prosecution.

It is free money for those who choose to take it. It is your money they are taking.
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Re: Financial crime more than every other crime combined

Postby admin » Thu Aug 19, 2010 5:38 pm

This post deals with the billions of dollars that was lost in the Asset Backed Commercial Paper (ABCP) fiasco. This cost you big money - approximately $1,000 for every man women and child in Canada. In terms of crime it costs nearly the same all the combined crimes committed in Canada. If you took all of the tax dollars paid for everyone you know for their entire life you would not even come close to the money scammed by "trusted criminals". This page provides a summary of the topic, hopefully, after reading this you will follow the recommended action to force the government to take action on this item and prevent it from ever occurring again. This is a true Canadian story of predatory practice by financial institutions and its enabling by government agencies.

First of all the word "crime" is used in the moral sense. Most people would think that taking billions of dollars for selling garbage would be a crime. However, even in fraudulent cases it is rare for for the perpetrators to be even charged much less convicted if it exceeds $10 million. With financial crimes in the billions, it has become apparent that police in Canada cannot act on cases larger than millions.If you are going to steal - steal big. We will tell you how they do it!

Probably the first thing you need to know is what are you are selling. Investments are the area to create and get away with the perfect crime. It is a self regulated (we police ourselves thank you) industry and below we will highlight just one (one out of thousands) of the perfect crimes that this industry gets away with, and describes how they use the help of regulators, professionals and politicians to assist them in the getaway. ABCP or Asset Backed Commercial Paper.

Investopedia defines and explains ABCP as "A short-term investment vehicle with a maturity that is typically between 90 and 180 days. The security itself is typically issued by a bank or other financial institution. The notes are backed by physical assets such as trade receivables, and are generally used for short-term financing needs. A company or group of companies looking to enhance liquidity may sell receivables to a bank or other conduit, which, in turn, will issue them to its investors as commercial paper. The commercial paper is backed by the expected cash inflows from the receivables. As the receivables are collected, the originators are expected to pass the funds to the bank or conduit, which then passes these funds on to the note holders." This paper is toxic when there is little to no chance that the receivables will ever be seen.

Now you know what you are selling here is how you proceed:

TWO GOVERNMENTS - Province of Alberta and the City of Lethbridge
ONE CRIME - Asset backed commercial paper - subprime mortgages and other debt<
ONE PROFITS FROM IT - Government regulators collect money from the investment dealers to enable the sale of questionable products
WE ALL SUFFER - Even if you have not personally invested in these toxic products, your tax dollars pay for these defaulted loans


TAKE TOXIC SUB PRIME MORTGAGES - Bad debt such as mortgages that have little to no chance of repayment
PACKAGE THEM - Put together a portfolio of some good products mixed with bad products and promise a good or reasonable rate of return
GET A CREDIT RATING AGENCY TO RATE THEM -These ratings are not provided by an independent agency. You pay the agency to provide a rating.
SELL THEM TO PUBLIC (Including Government agencies such as cities, universities, etc)
APPLY TO SECURITIES COMMISSIONS (PROVINCIAL GOVERNMENT AGENTS) FOR PERMISSION TO SELL TOXIC INVESTMENTS- When a product does not meet the the regulatory requirements you can apply and pay for exemptions from the regulations. To see the list of current exempted products go to ... rders.aspx

RETAIL INVESTORS (4.2 Billion) To be fair to these investors they see an investment that has a good credit rating and is approved for sale in the province by the provincial security commission. Many investors do not know that both the ratings and the exemptions have been paid for through a system that rewards conflict of interest rather than prevents such conflicts. This can be referred to as putting lipstick on a pig
FINANCIAL INSTITUTIONS - They get rid of their bad debts and get real assets such as cash
ALBERTA GOVERNMENT REGULATOR - ASC earns fees for approving toxic investments. The agency that gives permission to violate our laws hands out fines of 1/2 penny for every dollar scammed

THE GOOD NEWS (If you are the perpetrator)

NO INVESTIGATION No police will come; the police focus on street crimes. They typically look away at crimes over ten million. they do not have the resources or the skill sets to go after these crimes. The investment industry is self regulating.

Hey! I thought Canada had great banking laws to protect us from this. Yes, but this is not banking. The is investment manipulation, scheming and scamming to put customers money into investment bankers pockets. PricewaterhouseCoopers ranks Canada as the 4th most fraudulent country out of 54 countries. ... ndex.jhtml






Alberta Securities Commission (ASC) -ARE YOU ON THE JOB.......OR ON THE TAKE?


NONE..........ZIP.........Total silence from Ted Morton, Alberta Finance Minister in charge of the ASC. (Morton refuses in writing to provide answers or comments to our enquiries)


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