Securities Commissions assist predatory behaviours

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Re: Securities Commissions assist predatory behaviours

Postby admin » Tue Feb 10, 2015 11:07 pm

In Canada, there are literally thousands of lawyers and industry mouthpieces, paid millions and millions of dollars to ensure that deception and fraud crimes of your "trusted" investment dealer and salespersons will never see a policeman or a prosecutor. Self regulation is mafia-like decriminalization…… ... ment-37661

Here is a great article from a US expert who describes how it works…..something you will never see written in any Canadian media.

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The mafia would love this arrangement. It gets to rob you and if it is caught your only recourse is a court that is controlled by the mafia. This sounds far-fetched, but this is the way Wall Street operates. It can sell you toxic mortgages and IF it is caught your only recourse is an arbitration process that is controlled by FINRA. In case you don’t know this, FINRA is funded by Wall Street and it is what is called an SRO (Self-Regulatory Organization). That’s right Wall Street regulates itself. The SEC goes along with it because Wall Street special interests control the politicians who control the SEC. Like I said, the mafia would love this arrangement. There is no downside, except fines, if they are caught. And, the payment of fines is a cost of doing business. See The Street’s Due-Process Joke by Jim Tague.

How do they get away with it? The service agreements that you sign limit your recourse to an arbitration process that is controlled by FINRA that is controlled by Wall Street. Does this sound like a stacked deck? You bet it is and there is nothing you can do about it except not buy from their salesmen.

The bigger question is why do you let Wall Street get away with it? One simple answer is you need what they are selling – investment expertise, advice, and services. This is what you see on TV, but this is not what you get. 75% of all the financial experts who sell their products are salesmen who tell you they are experts to facilitate the sale of high and low quality investment products.

I think there is a second more basic reason. Wall Street figured out a long time ago that money is a relationship business. You tend to follow the advice of people you like because you trust people you like. You have trouble believing people you like will rip you off to make more money. Consequently, a top requirement when they recruits salesmen is a friendly personality that masks the real intent of the advisor – maximize revenue from your assets.

Why is a nice advisor such a big risk? If you are like 80% of investors you do not even read the service agreement (contract) that contains the arbitration restriction. You trust your nice, friendly financial advisor who says he will always do what is best for you. Based on assumed trustworthiness there is no reason to read an agreement that is loaded with legal and investment jargon

You better select a real financial expert you can trust. Your recourse is limited if you select the wrong advisor. And, this is just the way Wall Street wants it.

Tell Us What You Think!

Tags: financial advisor, Financial experts, investment, investors, Wall Street Jack Waymire, PaladinRegistry, Paladin Registry

About the Author

Jack Waymire worked in the financial services industry for 28 years. For 21 years he was the president and chief investment officer of a registered investment advisory firm with more than 50,000 clients. He left the industry in 2003 when his book (Who's Watching Your Money?) was published by John Wiley. That same year he launched an investor information website ( that was based on the principles in his book. Jack is a columnist for Worth magazine, a frequent blogger on major financial sites, and widely quoted in the media including the Wall Street Journal, Forbes, BusinessWeek, Bloomberg, and Kiplinger.
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Re: Securities Commissions assist predatory behaviours

Postby admin » Wed Oct 22, 2014 2:02 pm

Trick or Treeeat!

Your "protective" investment industry regulators are showing where their "treats" come from, and who they play tricks on……

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Elford on CRM :I just realized out what CRM stands for………It is a CRIME at how many years, and hundreds of millions of dollars can be spent to fully capture regulators, and get away with their help to conceal one simple trick……..the regulator TRICK IN THE SO-CALLED "CLIENT RELATIONSHIP MODEL" (CRIM) IS TO HIDE THE MOST IMPORTANT RISK OF THE INVESTMENT RELATIONSHIP FROM CONSUMERS….THE most important item in any relationship is in clearly informing the consumer whether they are dealing with a person who has a legal and professional loyalty to the investor and only to the interests of the investor………..or hiding industry product salespersons in a disguise of advice, without the license, the proper incentives, or the legal and professional requirements normally associated with professional advice givers. It is simply a crime (CRM) and I continue to have to apologize to the investing public for the behaviours of my "profession".

We are obviously using our paid and captured regulators well, for the tens of millions of dollars we give them……please forgive us if they pretend to be your granny. It is, after all, nearly Halloween.

the-big-bad-wolf.jpg ... =%2Fsearch
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Re: Securities Commissions assist predatory behaviours

Postby admin » Wed Mar 26, 2014 9:11 am

Here are the links to pages shown in Video #2 titled "SUITABLE" TO STEAL

The video is found here:

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Links listed below:

Larry Elford YouTube site

FINRA Suitability ... st/P197434

IIROC Canadian "rules" ... anguage=en

SEC rules ... report.pdf

History of 33-403 - The Standard of Conduct for Advisers and Dealers: Exploring the Appropriateness of Introducing a Statutory Best Interest Duty When Advice is Provided to Retail Clients

Canadian Securities Administrators ... px?id=1163

CIBC submission to regulators ... 33-403.pdf

National Post media story ... rn-around/

$25 Billion Dollar Pension Haircut

Suitability video about dirty water being "drinkable" (aka "suitable") ... re&index=3

Images shown:


CLIENT%20FIRST%202000-1.jpg (34.44 KiB) Viewed 14772 times


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Re: Securities Commissions assist predatory behaviours

Postby admin » Tue Mar 18, 2014 9:09 pm

The regulatory "two step" dance...........where captured and crony regulators intentionally steer consumers into harm and away from protection.

"Financial Advisor Chicanery: Imagine a two-tiered health care system in which some doctors were legally obligated to do what's right for their patients and others, like snake-oil salesmen of yore, could recommend whatever treatments made them the most money, as long as they didn't kill patients outright. Now imagine that the shysters did all they could to blend in with the real doctors. That's effectively the type of system we have today among the people Americans count on to tell them how to invest their life's savings. Registered investment advisors must, by law, put clients' interests first. Many thousands of other "advisors" at places like Morgan Stanley, Merrill Lynch and smaller shops are held to a much lower "suitability" standard. In essence, even though these people often refer to themselves as "financial advisors" or by some other comfort-inducing title, they're really glorified salesmen. Some do a great job serving their clients. Others don't. It's up to them. Under the law, as long as they avoid putting an 85-year-old widow into an exotic derivative with a 20-year lockup, they're bulletproof. Few clients know this fiduciary-suitability gap exists. The suitability crowd has worked tirelessly to keep the standard low and the distinctions murky. The cost to the public is incalculable but huge."

Excerpted from Where Wrongdoing Still Thrives on Wall Street, by Neil Weinberg, editor in chief of American Banker. ... 940-1.html

Regulators (securities commissions) must purport to be "protecting the public" while earning and justifying salaries in excess of $700,000 which are fully paid by the investment industry, hmmmm, what to do, what to do?

Step one: (just one recent example) Regulators maintain the ruse by selling stories such as "Protecting Investors", "Fraud Prevention" and "Check your advisor's registration days....".

For example: "For Immediate Release
March 18, 2014

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St. John's – In the time it takes you to read this headline, you could have checked to see if your investment adviser or firm is registered. March 19, 2014 is Check Registration Day, and the Canadian Securities Administrators (CSA) are encouraging investors nationwide to help protect themselves from investment fraud by first checking to see if the individual or firm offering them an investment is registered to do so.


Next we need to view the "Story Beneath The Story" to find out what is being hidden from you in this great looking investor "protection" announcement.

STEP ONE: HIDE YOUR TRUE LICENSE BECAUSE IT MAKES YOU LOOK LIKE A COMMISSION SALESPERSON AND CURTAILS BUSINESS (factually, 150,000 persons who call themselves "advisor" were legally licensed as "salesperson" until Sept 2009, when the CSA surreptitiously altered and deleted the word "salesperson" from 13 Securities Acts)

The story BEHIND the story told by securities dealers and regulators, is this. They wish you to check ONLY that your "advisor" is registered with them, and they will do everything in their power to PREVENT you from learning if that person is actually licensed in THAT EXACT role (the "title" on their cards)........there is no such license category called "advisor", but there is one called "adviser". 99.9% of people licensed in Canada are not representing themselves as per their license, but rather mis-representing themselves to prevent customers from knowing they are truly commission salespeople. The regulators are wilfully blind to what I see as fraudulent misrepresentation of mere commission salespersons as "professional advisers" with a fiduciary duty to care for the client. Here are the "official" license categories at the CSA:

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Step two of the story Behind the story told by investment dealers and regulators, is that the actual license held by the person "pretending" to be your "adviser" by titling themselves "advisor" (spelled with an "o").........their legal title in most often "Dealing Representative"......and industry rules prevent them from communicating with you without notifying you of their actual license........have you EVER had an investment person tell you that they were a "dealing representative??? This is why you need an investment guide and bodyguard, if you take your portfolio seriously.......Your dealing representative is not even on your side of the table, they are in competition with you over your own investment returns. The regulators are aiding them in hiding this conflict, this "competition", and this mis-direction. How can we allow investment regulators in Canada who turn a blind eye to clear and blatant deceit of consumers? Look up your very own "advisor" here and see what his or her official license category actually is. License search here: ... spx?id=850

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#3 So, it is my experience, (and well evidenced) that your investment dealer and the regulators which they pay up to $700,000 salaries to, are in cahoots to lift as much money from your rightful returns as is possible, even if they must mislead and fool you to get away with this. Serious savers need to treat themselves to a Portfolio review by a non-conflicted-guide and if said guide does not point out to you enough ways that your retirement is being systemically cut in half (over the long term) by people you should not be trusting.......I will eat your hat.

To quote my friend G.H., "And once you learn that it was a big LIE, the question that begs asking is "what else is officially a lie" ?

Please read this Wall Street Journal blog article about mis-spelling ones title (advisor) to mis-represent oneself to potential clients, while hiding ones license category and duty of care: ... n-advisor/

View this video from a recovering broker, who describes how investors are fooled for money: ... re&index=2

Finally, this study by U of T Pension expert tells one example of how much money is at stake to those who take advantage of clients: ... sp=sharing

Keywords for search: Audit, two-step, mislead, misdirection, captured,

Links to pages in video for your reference:

Canadian Securities Administrators (umbrella org for 13 securities commissions) ... px?id=1225

CBC Marketplace program Titled SHOW ME THE MONEY about bad advice ... y-reponses


Wall Street Journal Blog SHOULD YOU GO TO AN ADVISER OR AN ADVISOR? ... n-advisor/

CSA page "working with an Adviser" ... &itemid=84

CSA Broker/license Search page ... spx?id=850

FINRA Home page

FINRA Broker Check

CSA list of registration categories ... ion_EN.pdf

OSC (Ontario) Securities Act page ... _index.htm

Securities Act (Ontario) sec 44 (representation prohibited) ... e.htm#BK82

American Banker Mag "Financial Advisor Chicanery" ... 940-1.html


Some relevant research links not mentioned in this video: The Laws That Govern the Securities Industry‘haircut " investor naiveté and industry marketing savvy is costing Canadians investing though mutual funds as much as $25-billion per year" Investment Advisers INVESTMENT ADVISERS ACT OF 1940 ... ility.html Forbes "Investors Misled By Brokers Masquerading.." ... 5868241980 IIROC (salesperson) industry self regulatory (non statutory) rules (the Canadian equivalent of FINRA in the US) (These are the foxes who say, "trust us, we can police ourselves.......honest:) PERHAPS THE BEST SUBMISSION TO THE SEC,ABOUT THE TOPIC I HAVE COME ACROSS (from www ) ... ntext=jcfl Brokers and Advisers – What’s in a Name? (Fordham Journal of Corporate & Financial Law) (well researched and written) ... 2420130418 Financial advisers' credentials mislead seniors, watchdog says ... story.html "Advisor", when caught and in court, testifies "I was just a salesperson.........."

viewtopic.php?f=1&t=10 Two emails from Canadian Securities regulators about the question of "advisor/adviser" terms.
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Re: Securities Commissions assist predatory behaviours

Postby admin » Sat Dec 21, 2013 10:04 am

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(In Australia the regulators seem to work for public Canada, the regulators work for........$700,000.:)

20 December 2013Media Release
Delivering affordable and accessible financial advice

The Assistant Treasurer, Senator the Hon Arthur Sinodinos, today announced reforms to the Future of Financial Advice (FOFA) legislation.

"Consistent with the Coalition's election commitment to reduce compliance costs for small business, financial advisors and consumers who access financial advice, the Government will undertake a package of amendments to improve FOFA" said Senator Sinodinos.

The Government supports the principles of FOFA, however the previous Government's reforms went too far, creating unnecessary complexity, imposing significant burdens on industry and reducing the availability and increasing the cost of advice to consumers.

"Our consultation with industry indicates that the Abbott Government's FOFA reforms will save the financial services industry an estimated $90 million in implementation costs and reduce annual compliance burdens by an average of approximately $190 million per year" Senator Sinodinos stated.

Key elements of the Government's amendments include:

Removing the 'opt-in' requirement

The Government will remove the need for clients to complete unnecessary paperwork in order to continue their arrangement with their adviser. This requirement adds a burdensome layer of red tape to industry and does not provide any significant consumer protection.

Annual fee disclosure

The Government will streamline the existing requirements to ensure that the requirement to provide fee disclosure statements only applies to new clients from 1 July 2013. Applying this requirement to existing clients is overly onerous as the fee disclosure arrangements are significantly more costly to apply to pre-1 July 2013 clients.

Removing 'catch-all' from the best interests duty

The Government will amend the best interests duty to ensure that advisers can be confident that they have provided compliant advice to their clients.

The existing catch-all arrangements have left advisers uncertain as to whether they have satisfied the best interests duty.

Scaled advice

The Government will amend the best interests duty to explicitly allow for the provision of scaled advice. The uncertainty caused by the current arrangements have prevented consumers from being able to access affordable advice that is specifically tailored to their needs. The changes will enable advisers to agree on the scope of advice to be provided with their clients, whilst ensuring that the advice is still appropriate for the client.

This reform will enable consumers to receive "one-off advice" from financial advisers.

Exempting general advice from conflicted remuneration

The Government will ensure that the ban on conflicted remuneration only applies to personal financial advice. General advice is provided under a wide range of circumstances and often educates and informs clients, providing many clients with financial information they would otherwise be unable to afford.

Applying the ban on conflicted remuneration to general advice risks limiting the availability of this type of advice and unnecessarily burdens industry by capturing staff not directly involved in providing advice to clients.


The Government will amend the existing grandfathering provisions to ensure that advisers can move between licensees whilst continuing to access grandfathered benefits. The current grandfathering provisions are reducing competition in the industry by impeding the movement of advisers between licensees.

"I am confident that these reforms will ensure that the integrity of the financial advice framework is maintained whilst delivering a system that offers affordable and accessible financial advice to the Australian community," said Senator Sinodinos.

A detailed summary of the Government's amendments is at Attachment A.

Attachment A

Opt-in: Remove the opt-in requirements so that advisers no longer need to seek their client's agreement every two years.
Annual fee disclosure: Remove the retrospective application of the fee disclosure requirement, so that advisers will not need to provide fee disclosure statements to clients who entered into a fee arrangement before the mandatory 1 July 2013 commencement date of FOFA.
Catch-all: Remove the catch-all provision (s961B(2)(g)) so that advisers can be certain they have satisfied their obligations under the best interests duty.
Scaled advice: Clients and advisers will be explicitly allowed to agree on the scope of financial advice to be provided, whilst ensuring advice is still appropriate for the client.
Life insurance inside super: The ban on conflicted remuneration will only apply to commissions on risk (life) insurance products inside superannuation in circumstances where no personal financial advice about these products has been provided i.e. where automatic coverage is provided inside a default (MySuper) superannuation fund.
General advice: Benefits relating to the provision of general advice will be exempted from the ban on conflicted remuneration.
Execution-only exemption: Introduce a causal link into the exemption so that benefits are permitted where no advice has been provided to the client by the individual performing the execution service (as opposed to the licensee or authorised representative more broadly) in the previous 12 months.
Training exemption: Broaden the existing training exemption, that provides for training in relation to providing financial product advice as a permitted non-monetary benefit, to include other forms of training that are relevant to conducting a financial services business.
Volume-based shelf-space fees: Amend the drafting of the ban on volume-based shelf-space fees to clarify that incentive payments between fund managers and platform operators for preferential treatment of certain products on the platform "shelf" are banned.
Define intra-fund advice: The definition of intra-fund advice will be referenced in the FOFA provisions.
Grandfathering: Amend the existing grandfathering provisions, that exempt certain benefits under pre-existing arrangements from the ban on conflicted remuneration, to allow advisers to move between licensees and to continue to access grandfathered benefits in certain circumstances.
Amendments will also be made to clarify the operation of the grandfathering arrangements with respect to the sale of financial planning businesses, superannuation to pension switches under multi-product offerings, and employed advisers becoming self-employed advisers.
Conflicted remuneration: Amend the conflicted remuneration provisions to:
allow for the payment of benefits under "balanced" remuneration structures;
expand the basic banking exemption to include all simple (i.e. "Tier 2") banking products; and
permit the payment of performance bonuses that are calculated by reference to remuneration which is exempt from the ban on conflicted remuneration.
Stockbroking: Amend the existing stockbroking-related exemptions to:
clarify the application of the stamping fee exemption to initial purchasing offer arrangements; and
clarify the application of the brokerage fee exemption to products traded on the ASX24.
Minor technical amendments: A number of minor amendments will be made to address technical issues including clarification of the client-pays exemption and consequential amendments to the application of the wholesale and retail client distinction under FOFA.
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Re: Securities Commissions assist predatory behaviours

Postby admin » Wed Jun 12, 2013 1:12 pm

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Watching 13 Canadian Securities commissions collect salaries as high as $700,000 at the top, while frantically trying to hold up the facade of "investor protection" is like spotting the Canadian Tire tent in a Waterton Lakes campground on a windy day. It is the one flattened or failing badly. So are our securities regulators. They are beginning to be called a "financial abuse concealment and damage control" division of the financial industry, and I now realize that the name fits.

Here is another example of them saying one thing while practising exactly the opposite......where does one find such sycophants...........nevermind, I almost forgot the $700,000 part.

What delicious irony that while the "facade" of Canadian investment regulations proclaims in bold letters, PROTECTING INVESTORS", actually they have removed many of the protections for investors, at the request of industry trade and lobby folks, and they are just now starting to "talk" about it (protecting investors).

"Exploring the Appropriateness of Introducing a Statutory Best Interest Duty When Advice is Provided to Retail Clients" (or should we continue further down the road of telling the public that we are giving them trusted "advice" while screwing them on fees and commissions............hmmm, what to do?)

Expect their conclusion in favour of the public interest in the 12th......................of never. ... px?id=1154
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Re: Securities Commissions assist predatory behaviours

Postby admin » Thu May 23, 2013 9:00 am

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Flaherty says Ottawa to move ahead with single securities regulator plan even without provinces

OTTAWA — Finance Minister Jim Flaherty says the federal government will again push ahead with the creation of a national securities regulator, with or without the agreement of the provinces and territories, to deal with areas in which Ottawa is constitutionally responsible.

“I’ve been advocating a common securities regulator for a long time, with limited success,“ Mr. Flaherty told the House of Commons finance committee on Wednesday.

The Supreme Court of Canada ruled in 2011 that Ottawa’s attempts to create a single federal regulator — there are now 13 separates bodies — infringed on some provincial constitutional responsibilities.

In his March 21 budget, Mr. Flaherty again broached the issue, saying the different levels of government could find common ground without affecting constructional rights.

Wednesday’s committee hearing was called to enable members of Parliament to question the government on its budget implementation bill, C-60.

The March budget document stated: “Canada is the only industrialized country without a national securities regulator. By pooling provincial, territorial and federal jurisdiction and expertise, Canada could have a world-leading securities regulatory regime.”

Mr. Flaherty told MPs that his reading of high court ruling was that “we all have constitutional responsibilities in the area of securities. But the federal government has a systemic responsibility for systemic risk across the whole country in terms of the securities market.”

At the same time, he said, the provinces have “day-to-day regulatory responsibilities.”

“We have tried greatly and repeatedly” to get the majority of the provinces to join Ottawa in a joint regulator.

“This is not a federal regulator. This would be a joint Canadian regulator — similar to the Canada Pension Plan — where the provinces and the federal government would delegate our jurisdictions,” he said.

“We have been unable to reach that kind of consensus.”

The Supreme Court has told the federal parliament that “we are responsible systemically for the system,” the minister said.

“We will, if we have to, create a federal securities regulator to deal with those areas of jurisdiction that the Supreme Court of Canada has told

get the entire article here ... provinces/
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Re: Securities Commissions assist predatory behaviours

Postby admin » Thu May 09, 2013 9:56 pm

Funny to look back and compare to today:

ASC under suspicion of self dealing, willful blindness or failure to protect the public interest for 20,000 to 30,000 investors 2013 ... JBa_l0w7AQ
This video of only three minutes duration begins the cluster-frack that is the ASC all over again, letting them once again investigate themselves and their own behaviour???

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Now looking back, here are some clips of other allegations from 2005: view clips between 8:00 and 10:00 minute mark. Alberta Legislature 2005
Then again from 11:20 Alberta Legislature 2005
Again from 16:40 Alberta Legislature, April 4, 2005

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(This information is now almost ten years old, and nothing as changed, except it has gotten worse)

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Ten years later, and the ASC is still failing to protect investors. Billions in damages each year to Albertans and no accountability for the ASC to follow best practices for the public.
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Re: Securities Commissions assist predatory behaviours

Postby admin » Fri Mar 08, 2013 11:14 pm

The integrity of the capital marketplace is at stake," Dunn said. It’s nothing Albertans haven’t heard before. They’re still waiting.
(Full article below at next posting in this forum topic viewtopic.php?f=1&t=105 )

Western Standard Dec 12, 2005


Click to enlarge image, click again to zoom in)

for zoom tools to work you may have to view it in this forum topic viewtopic.php?f=1&t=105

Western Standard Dec 12, 2005
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Re: Securities Commissions assist predatory behaviours

Postby admin » Fri Mar 08, 2013 11:00 pm

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It was a cool but sunny summer Monday in August and a fuzzy, blue, six-foot-tall dog strolled jauntily into the windowless meeting room of a downtown Calgary hotel and put his arm around Bill Rice, the newly minted chairman of the Alberta Securities Commission. Rice, looking a bit uncomfortable with the man-size creature pressed up against him, was anxious, nonetheless, to promote the pooch - Investor Ed - to the reporters gathered in the room. Investor Ed, after all, is, like Rice, a new face at the ASC - a fun and helpful fella who’s arrived on the Alberta equities scene to help novice investors navigate the world of stocks. Among other things, he’s got a website that offers tips on how to invest in the market safely, how to hire an adviser and how to sniff out publicly traded firms that may not be playing by the rules.

But the eight or so reporters who showed up that day didn’t seem particularly charmed by Ed. They were more interested in the scandals that have been, well, dogging the ASC for months. Staff may have calculated that the rumours and accusations surrounding the way the ASC operates had died down sufficiently, marking a good time to stake out a new, positive track for the regulator (and what better way than with a cuddly blue dog), but eradicating the bitterness would prove much more difficult. Memories of ruthless firings of whistle-blowers, the anonymous letters to the government from fearful but alarmed employees within the ASC, allegations of sexually inappropriate behaviour in executive offices—all of it was still very much present in the reporters’ minds. As were the secret reports on ASC activities, buried out of sight from the public, and alleged attempts by ASC management to thwart the work of the auditor general in investigating them. The memories were all still too fresh.

The reporters peppered Rice with questions about everything but poor Ed: When would the ASC reports be made public? How and when would the fired employees be replaced? How was the ASC going to address all these issues? “I don’t see any evidence of issues,” a frustrated Rice responded. “None of what went on was on my watch. We’d like to focus on investor education, but you’d still like to talk about what went on six months ago.”

But everyone in the room, including Rice, knew that the ASC had been facing trouble long before even that. And it isn’t over yet. Rice had been brought in to clean up all the mess left behind by two previous chairmen. But fresh revelations about Rice’s own cozy relationship with an Alberta stock issuer in November, now have the Opposition party calling for the chairman’s resignation.

And while ASC executives have faced accusations of all sorts, one stands above the rest in terms of its gravity: that it may have cultivated a dual-regulatory environment, in which some Alberta companies were treated with a lighter touch than others. The latest scandal over Rice, who had, until November, kept his position as chairman of Calgary-based Tesco Corporation—a subject of ASC regulatory authority—with the full knowledge and even the permission of the commissioners themselves, only highlights what critics say has been the problem at the ASC all along. In a province where the business elite and the government elite rub elbows on a regular basis, the government-run regulator doesn’t seem to know how to act independently.

There was no shortage of rumours to give rise to the allegations that the market watchdog had been bending the rules for political purposes. On Jan. 9, 2004, Wayne Alford, who had been director of enforcement for the ASC from 2001 to 2003, wrote to then provincial revenue minister Greg Melchin, suggesting that ASC bosses had created a “two-tier regulatory regime” with two sets of rules for “normal” market participants and another set for the “powerful.” In December of that same year, a group of frustrated ASC employees presented to one commissioner, Thomas Cooke, a list of complaints about their employer. Calgary lawyer Perry Mack was hired by the ASC to investigate the snowballing allegations against the commission in February 2005. It would be the first of five probes into the ASC. Mack’s findings remain undisclosed, in the vaults of Alberta Finance. Another report, by commissioner R.J. McLeod, was completed in March, and submitted to the deputy premier and Minister of Finance Shirley McClellan. It, too, remains secret. In April, McClellan received another letter, this time from a group of 35 employees, once again blowing the whistle on what they called a highly politicized regulator suffering from a lack of leadership and rapidly losing its integrity as a law enforcement agency.

With so many alarming allegations swirling around the ASC, it was with bated breath that many inside the market watchdog and in the province’s business community awaited the report of Alberta’s auditor general, Fred Dunn, released Oct. 27. The fact that the ASC had even tried—unsuccessfully—to block Dunn’s investigation in court, arguing he had no jurisdiction to examine closed enforcement files, only thickened the plot. But if the province’s investment community anticipated a bombshell, revealing the facts behind the ocean of allegations, they would be disappointed.

Examining 82 cases, the auditor found plenty of evidence of poor documentation and haphazard enforcement procedures. Dunn acknowledged that, “We found that information in the files supporting decisions tended to diminish at higher levels . . . ” and that “the most sensitive or potentially high-profile cases [were] the most poorly documented, likely due to more involvement by senior level staff and Members, whose views were sometimes sought on a matter. Senior staff and Members tended to provide their views verbally." The report notes "one instance where the Director of Enforcement did not comply with the Commission’s conflict of interest policies and this non-compliance was not detected by the Commission’s Executive Director." But in the end, the AG concludes that, despite several enforcement cases being brought to his attention by ASC staff as worthy of examination, "there is not sufficient evidence to recommend to management that any case file we examined be reopened." There is nothing, Dunn reports, to indicate that the two chairmen who preceded Rice—Peter Valentine and Stephen Sibold—or any other executives had acted inappropriately.

That’s not what ASC insiders say. Several have told the

Bill Rice was supposed to put the regulator’s checkered past behind it. Now, he’s facing calls for his own resignation after it emerged that he remained chairman of a Calgary-based firm for months after he was appointed head of the ASC.
Western Standard that political interference has been par for the course at the provincial regulator, with employees ordered to pursue or drop files on the whim of upper management (most, fearing repercussions, have requested anonymity). "We would have an enforcement file and would want to proceed with enforcement action, and it would be killed," says one former ASC enforcement department employee. "Someone would say kill that file, we’re not moving on it."

According to another former ASC manager, files were often dropped because they were considered "too hot to touch"— in other words, too high-profile. Sometimes, he says, it was merely an associate of then ASC chairman Sibold. Other times, the order came from the Alberta government. "I saw them meddling in enforcement," attests the ex-manager. "Sometimes you would get calls from the minister [of finance] inquiring about certain problems, issues, in which case there would be enforcement taken. Sometimes there were lawyers who brought forward enforcement complaints and depending on who the lawyer was, it would or wouldn’t be investigated." Even more alarming, he says, "you might take enforcement action against someone just because they’ve pissed off somebody" with power.

If it sounds like the ASC was doling out its own brand of justice, according to one ASC insider, it was. Like the mafia, he says, "there were ‘made’ people who do the bidding of those higher up in the chain. They then adopt the view of ‘It’s my job to do their bidding.’" Even the chairmen were in on it, according to the source, sometimes taking it upon themselves "to make problems go away. It was based on an expectation that you would take care of the people higher up: a power network."

Little wonder, then, that critics claim that the auditor general hasn’t even scratched the surface of the regulator’s activities. There are, after all, nearly 7,000 companies today regulated by the ASC, some with extensive connections to the Klein government. Questionable enforcement issues, they say, go back a long way. Years-old rumours about cozy connections between high-flying tech firm Zi Corporation and the Alberta government, insiders allege, go much deeper than anyone ever suggested. Someone, they claim, either from the ASC or the government made sure that apparent regulatory breaches in that company were ignored, its enforcement cases dropped.

And with five government reports, commissioned at hundreds of thousands of dollars of taxpayer money, only to be buried by the Klein government, some wonder if the auditor general’s report itself may very well have been politicized. The province may have been eager just to make a scandal go away and return stability to Alberta’s thriving public markets— not so eager, perhaps, to drag through the mud any of the province’s proudest firms, the kind of "powerful" firms that Alford had alleged were getting special treatment. Especially them.

In the early nineties, reporters were calling Calgary-based Zi Corp (then called MultiCorp) the "Microsoft of Asia" for its groundbreaking technologies that adapt the character-based languages of that part of the world to the digital age. Today, Michael Lobsinger, chairman, interim president and CEO of the firm refers to his company more modestly, as the "Telus of Japan," though his software is most famous for its ability to simplify the input of Chinese characters into cellular phones and other text devices. In fact, Zi Corp’s eZiText, which has the ability to predict what words users want to type based on only a few keystrokes, is used worldwide. In Canada, eZiText is available on some Telus Mobility phones. And Zi recently licensed its handwriting recognition software, Decuma, to video-game giant Nintendo, to be used in its portable gaming systems.

While Zi is known globally for its award winning software, in Alberta, it may be better known for its ties to the province’s power brokers. Zi’s connections first came to light in the mid-nineties, when it found itself in the media spotlight over shares that a company director gave to the wife of Premier Ralph Klein and the wife of his number one advisor and former chief of staff, Rod Love. The shares came with the understanding that the wives would pay for them later on, but only $1 each, even though shares were then trading on the open market at $1.62. The media railed about the deal, even as more stories emerged about the comfortable relationship between Lobsinger and Klein. Lobsinger had accompanied the premier on a federal government–sponsored Team Canada trade mission to China in November 1994. Klein attended the opening of the Hong Kong Zi office, in November 1993, and he celebrated with Lobsinger at a company Christmas party in December 1994. Two ethics commissioner reports later, Klein was cleared of any alleged misconduct, but nevertheless, both wives said they would donate the $51,000 they made from selling their shares, to charity.

But Zi’s top-drawer government connections didn’t end there. In 1993, the same year that Lobsinger was handing out shares to Klein’s wife, two close associates of Klein’s also made investments in Zi. Hugh Dunne, then director of the premier’s Calgary office, purchased 7,000 shares and Klein’s brother-in-law Ted Hamilton, about 250,000 shares. Thompson MacDonald, a friend and former media adviser to Klein, has been a Zi director since 1993, when he held his own options for 75,000 shares in the company. And then there’s Derrick Armstrong, a founding director of the company who has for years sat on Zi’s board—including during the late nineties when he also sat on the ASC legal advisory committee. Armstrong had even been touted as a top contender for the ASC chairmanship in 2000, when Sibold was given the job. And in 2001, Love was appointed to the Zi board (upon temporarily leaving his government job to become a private consultant), and remained there until 2004 (when he returned to government to again become Klein’s chief of staff), selling off a load of Zi shares on his way out.

Ralph Klein attended Zi Corp’s Christmas party and office openings and travelled with Zi executives, while his wife, office director, chief of staff, and adviser have all had shares in the firm.
When Zi handed those heavily discounted company shares to the wives of the premier and his right-hand man, it might as well have been a pop quiz on the ASC’s ability to act truly independently of the political masters who control it.

The press reported in December 1996 that "a securities commission hearing into allegations of insider information and an appeal of the first ethics commissioner’s report also cleared Klein of any wrongdoing," on the Zi file. That sounds good, but there is actually no evidence that any such hearing ever took place. What’s more, a commission insider, who, out of fear for his job, has requested anonymity, alleges that one of the ASC’s top investigators, David Smiley, now manager of investigations in the enforcement department, began looking into Zi Corp (which was then still called Multi-Corp). Smiley is known to be a diligent and fastidious investigator. But in 1997, according to the top level insider, he was ordered to drop the case. "You don’t mention the name Multi-Corp to David Smiley," he says. "It should have been pursued, and it wasn’t. "And if it hadn’t been for the directive of those above him "he [Smiley] would have."

Then there were the other questions a regulator might have wanted to ask about Zi. In 1998, when a massive block of the firm’s stock was sold to a single buyer, investors awaited to be informed of the identities of the seller and the buyer. The chunk amounted to an 11.5 per cent ownership of the firm. Canadian securities regulations stipulate that any investor with 10 per cent ownership or more in a publicly traded firm is considered an "insider," someone who must make himself known and file public declarations every time he trades stock. But when 11.5 per cent of Zi changed hands on Aug. 24, 1998, neither the seller nor the buyer filed anything with regulators.

All indications are that the shares were those of the man who created Zi’s groundbreaking language software. On Feb 23, 1998, according to a company release, Zi officially acquired all the rights to the program from Eric Chappell and his programming partner, Jeff Yates, in exchange for 4,525,000 company shares.

Chappell, who has relocated to Australia and whose relationship with Lobsinger, he says, had become "pretty acrimonious," was eager to dump the shares and put his relationship with Zi behind him. He began selling into the open market, whittling down his holdings to just over three million shares. But the heavy sell-off was putting downward pressure on Zi stock. Rather than allow him to continue to flood the market with his stock, Chappell alleges that Lobsinger helped arrange a private sale of the remaining shares. Lobsinger insists he never "arranged buyers," but admits he did "make introductions." The shares were purchased in one fell swoop by a single investor, but Lobsinger insists his company did not report the purchaser’s name because they did not know who it was. But if Lobsinger’s the one who made the "introductions" in the first place, asks Chappell, "how could he not know?"

Had Zi been aware of the purchaser of the stock, it would have violated securities regulations. First, there’s the simple matter of insiders being required to report their trading activities. That’s a policy that gives outsiders some sense of how strongly management believes in the future of the stock; a heavy sell off by a company insider might indicate that things in the boardroom don’t look so rosy. It also alerts outsiders to anyone who might be loading up on company stock, perhaps with an eye to a possible takeover. But none of Zi’s future ASC filings had mentioned this mysterious new insider on the roster. If the company knew the investor, executives would have knowingly filed false statements. It might be the kind of thing that could catch a regulator’s attention—especially if it was a company that had been on the ASC’s radar before. In Zi’s case, it appears it didn’t.

In hindsight, Zi investors now know that the buyer of Chappell’s three million shares must have been New York offshore hedge-fund firm Lancer Funds, run by Michael Lauer. Shareholders may have had a passing familiarity with Lauer as his hedge fund had, at several points in the nineties, bought into a series of private equity offerings issued by Zi, says Zi’s vice-president of finance. Documents would later reveal that Lancer had invested close to US$95 million in Zi, amassing 49 per cent of company equity, without ever emerging as an insider. Perhaps Lauer was trying to stealthily prepare a takeover of the firm, but was stopped short when his assets were frozen by the U.S. Securities and Exchange Commission in July 2003.

According to the SEC, Lauer wasn’t exactly what you’d call a stickler for strict regulatory compliance. In July 2003, the U.S. market watchdog moved in on the fund, alleging that Lauer was engaged in a "massive overvaluation and manipulation scheme. "The SEC alleges that the once high-flying Wall Street whiz, whose high-profile clients included Britney Spears, would buy up huge stakes in small, illiquid stocks. When it was time to report his funds’ performance to investors, he would push prices up by buying extra shares at inflated prices. It wasn’t the fund’s first run-in with the law. Lancer associate Bruce Cowen had been indicted the previous summer in one of the largest financial fraud busts in Canadian history, a joint RCMP–FBI investigation dubbed Operation Bermuda Short. Cowen later pleaded guilty to securities fraud. Lauer is currently awaiting trial and the entire Lancer portfolio is being managed by a court-appointed receiver.

Today, Lobsinger insists he "could not legally have known" that Lancer Funds was the mystery insider. "Don’t ask me about people who have acquired stock in Zi and are being investigated. It has nothing to do with Zi," he says. His firm issued a press release on Aug. 11, 2003, followed by a similar one in September stating that it was unaware of Lancer’s large holding, despite observing in 2002 "what appeared to be a concentration of its shares held at a major brokerage firm. Zi Corporation management requested that its attorneys obtain an update from Lancer concerning the level of Lancer ownership in Zi Corporation, but despite several requests, did not receive a response."

Zi has not been implicated in the SEC investigation of Lancer Funds. Nor have charges of any kind been brought by the ASC against Zi Corp, or Lobsinger for issuing what are now known to have been false statements about company insiders. ASC investigations aren’t made public unless and until charges are laid.

But the revelations of the involvement of an alleged stock manipulator may be leading Zi investors to worry about what other pennies are yet to drop: the company’s stock has lost more than 75 per cent of its value this year. But Lobsinger maintains that his company hasn’t done anything wrong. "Nothing we have ever done has been in breach of any act or any law anywhere in Canada or the United States," he says. "If we had broken some law, the securities commission would be on us. And they’re not."

Critics of the ASC and provincial opposition parties aren’t so sure about that last part. After all, the commission itself is under intense scrutiny for its handling of enforcement files. Meanwhile, allegations that the regulator existed in what a former employee describes as a "small-p" political environment—where investigators might be moved to treat cases differently based on subtle, unwritten pressures from management—aren’t going away. The latest revelations that Rice, the current head of the regulatory agency, was allowed to keep his job as chairman of one of the market watchdog’s client firms has only fuelled the charges that the ASC is still incapable of acting as a truly independent authority. In a Nov. 10 interview, his first since the release of his report, auditor general Dunn told the Calgary Herald: "There are important matters to be dealt with at the ASC, and they must be overcome right away. The integrity of the capital marketplace is at stake," Dunn said. It’s nothing Albertans haven’t heard before. They’re still waiting.
Western Standard Dec 12, 2005
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Re: Securities Commissions assist predatory behaviours

Postby admin » Tue Mar 05, 2013 2:08 pm

“Checking registration is an essential part of any investor’s due diligence,” said Bill Rice, Chair of the CSA and Chair and CEO of the Alberta Securities Commission. “To protect their investment, we encourage all Canadians to check the registration of any individual or firm offering an investment opportunity.”

Screen Shot 2013-03-05 at 2.08.10 PM.png

see the complete release at this link below ... px?id=1125

And an investment victim writes back:

try using the national registration search for any of the scoundrels we know of.

i tried and all i got was "no records"

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Re: Securities Commissions assist predatory behaviours

Postby admin » Tue Mar 05, 2013 9:07 am

EDMONTON - "The Alberta Securities Commission does not receive enough information or co-operation from people who have been burned by investments gone bad through mismanagement or fraud, says Bill Rice, the regulatory body’s chairman."

In response to comments made by the Chair of the Alberta Securities Commission, that there has been insufficient communication on the part of investors with regard to lodging complaints and requesting investigations, your cooperation would be appreciated in answering the following questions:

1. Have you in the past reported any apparent difficulties that you have had with respect to your investments that have resulted in losses to you because of suspicion of wrong-doing?

2. What was the name and nature of the investment?

3. When was your request submitted?

4. What has been the response to date?

5. Are you aware of any investigation having been undertaken?

6. Are you satisfied with the response you have received from the Alberta Securities Commission?

7. If you feel that your investment losses may have involved fraudulent activity, as mentioned in Mr. Rice's comments above, were you informed of any criminal investigation or referral of your case to police or prosecutors by the Alberta Securities Commission?

Please forward any supporting materials that may shed additional light on this situation. Our reason for asking you these questions is to seek enough information from victims to see if a way can be found for victims be compensated by the Alberta Government as the party responsible for oversight of the ASC. Thank you for your assistance.
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Re: Securities Commissions assist predatory behaviours

Postby admin » Sun Mar 03, 2013 10:58 am

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(not sure if this is the correct article, could not open an article at the link provided, however, in the Ed Journal article found below his quote is also found:

EDMONTON - The two dozen people who told a Tuesday town hall meeting of the Alberta Investors Protection group here how they lost hundreds of thousands of dollars in failed investments are sadly just the tip of the iceberg.

“Some of us have been waiting for this 10 years or longer, having watched peoples’ lives fade away and peoples’ investments disappear,” said Larry Elford, a former Lethbridge financial adviser who became an investor advocate and is a key figure in the AIP movement. “We’ve watched more suicides than prosecutions in Canada. This could be historic.”

The point was made repeatedly Tuesday that these investors had not suffered from the natural volatility of capital stock markets, rather they lost much of their life savings due to inept or dishonest management of their money or the products in which they invested. Several people told of their frustration in trying to recoup losses or make people accountable, that they continually ran into brick walls put up by politicians, police and regulators, as well as receivers and monitors assigned to adjudicate. And that fighting is tremendously expensive, causing most people to quit.

The meeting attendees also bemoaned an apparent lack of interest or willingness to deal with white collar crime in Canada, in contrast to the prevailing attitude in the United States. The group agreed that laws and the procedure to apply them need to be changed, but wondered openly how that could be brought about.

Criminal courts will be applied. And we may find a Rosa Parks in our group who stands up and says, ‘I will not take this abuse anymore,’” Elford said, recalling a central figure in the American civil rights movement. “There will be civil charges, there will be small claims, there’ll be class actions; but the court of public opinion may be stronger than all of the above. The world has changed and we can see we shouldn’t be so trusting, we can see the carnage and the damage.”

After attending the meeting, former Alberta MLA Julius Yankowsky said that “to bring about any legislation is going to take a long time, and these people need their money back, so what other way is there to do it than bring about a class action against the government and Alberta Securities (Commission)?”

Many of the problems divulged Tuesday related to exempt market companies which don’t have to produce a prospectus to raise money or register with a securities commission. Many investments involved commercial or residential real estate, or mortgage lending.

“The exempt market was created as another capital product that companies can use to raise money, so if they’re managed well and stay within their objectives and they keep your best interests in mind, they can succeed and many have,” organizer Don Logan said. “We’re here collectively about those that have not. We don’t know if they’ve committed fraud until they’ve been through the court system, and by then your investment is worthless.”

Timing was a recurring issue.

“Those of you thinking you might have a problem need to organize, get a lawyer, be very pro-active very fast, because if you think there’s smoke, the money’s disappearing,” said organizer Terry Town. “Otherwise, by the time you get organized you’ll probably find out there’s nothing left.”

The need for both advisers and investors to be properly educated was stressed.

“Most of those agents had very little education to be in the industry,” said Nicole Shurko, a financial planner with Kyland Investment Management. “To sell these investments to your family, an agent only needs a $400 correspondence course. I think that’s embarrassing. We need to write to the Securities Commission and demand higher educational standards of the advisers out there.”

Yankowsky’s advice for investors is to “look at the track record of investment companies in Alberta and be very, very careful if you’re going to make an investment. And yet even the company I was involved with, everything seemed to be so foolproof, it was set up so beautifully.”

Awareness is key for investors.

“They cannot treat investments like they treat their oil change, where they drive to a guy and say ‘let him handle it because it’s messy and I don’t want to get oil on my fingers,’” Elford said. “If you’re not going to change your own oil and you’re not going to do your own investing, you better make sure the person who does it is a professional with a fiduciary duty. Anybody else is a salesman, and with a salesman it’s buyer beware.”

Ray Turchansky writes Fridays in the Journal.

- See more at: ... 9U0uL.dpuf
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Re: Securities Commissions assist predatory behaviours

Postby admin » Sun Mar 03, 2013 10:40 am

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(A historic look back at this old article, the storm at the ASC continues, the lawyers and regulators get richer daily, while the public gets harmed. Daily)

The Alberta Securities Commission's Perfect Storm

When Bill Rice arrived on the doorstep of the Alberta Securities Commission on July 18, it seemed the controversy that had dogged the embattled regulator for months had quieted to a whisper.


When Bill Rice arrived on the doorstep of the Alberta Securities Commission on July 18, it seemed the controversy that had dogged the embattled regulator for months had quieted to a whisper.

It hadn't.

His appointment as chairman came after the emergence of startling reports from staff whistle-blowers that top ASC brass behaved unprofessionally and interfered in enforcement cases. Alberta Finance Minister Shirley McClellan cleared the executives of any wrongdoing, but the allegations lingered.

The ASC -- already grappling with a $1.2-million wrongful dismissal lawsuit from a senior official who felt his firing was retribution for speaking out with his concerns -- also raised eyebrows when it launched a legal challenge to limit a highly anticipated report from Alberta Auditor General Fred Dunn.

Yet, Rice -- a veteran securities lawyer and former managing partner at Bennett Jones LLP -- thought the bulk of the scandal was behind Canada's second-biggest market regulator.

"From my own observations and discussions with others, I would conclude basically that people continue to have confidence in the ASC and hope to hear that whatever issues or problems are being, or have been, cleared up," Rice told reporters in September.

They weren't.

Critics took Rice to task for failing to meet an insider trading disclosure deadline, which resulted in a $1,000 late payment fee, and for staying on as chairman of Calgary-based Tesco Corp. for three months while running the ASC.

Not only that, Dunn's report -- released to the legislature in October -- contained blistering criticism of the way the regulator documented its investigation files, in particular sensitive and high-profile cases.

Not only were politicians calling for Rice's resignation, but also that of ASC enforcement director John Petch, who, according to Dunn's report, traded shares in a company under investigation by his staff.

Rice spoke to the Herald's editorial board about the "perfect storm" that faced the ASC in 2005.

The following are excerpts from that discussion.

Q: The auditor general, in his report, said there were cases -- particularly high-profile cases -- with poor documentation. How can that instil confidence in the ASC?

A: We do accept the auditor general's recommendations. We know we have been put in a circumstance where there is a great deal to respond to, and we will. We also must move forward.

Q: But what about John Petch? Should he not have known better? And are you prepared to tell us what sanctions he was given?

A: I'm not. I don't want to create an atmosphere where people are afraid to own up to their mistakes or feel that because of external pressure we would simply throw someone to the wolves who is a valuable member.

[Editor's note: A day after this interview, Rice sent a note to Auditor General Fred Dunn indicating that Petch had given the profits from his controversial trade to the Calgary Inter-Faith Food Bank, had apologized to fellow workers and had had a letter placed in his file.

Q: So it is a mistake?

A: Absolutely.

Q: It seems so elementary. Why would you make a trade in a company being investigated by the organization in which you are the director of enforcement?

A: We had the same question, but we've gone at this pretty hard and the issue to us was, do we have a more fundamental issue? That's different from protecting someone we would conclude has acted improperly -- not having made a mistake, not having made a misjudgment.

Q: How do you reconcile the dismissal of former staff members Grahame Newton and Diane Kirby for failing to follow ASC policy with the decision to keep John Petch, who also breached ASC policy?

A: I didn't take part in the decision (to dismiss Newton and Kirby). In my view, there were issues of loyalty and intention. That is, John Petch did not intend any harm to the ASC. He did not intend to embarrass me or the board or intentionally contravene a policy. I probably don't know all the facts, but there certainly is an air there was a different state of mind in respect of the people dealt with by (former interim ASC chairman) Peter Valentine versus a bad judgment call and that, to me, is a significant difference.

Q: Do you consider the Petch matter closed?

A: I consider it closed in respect to the immediate handling of it. It's never going to be closed because it happened and it's had a very significant profile. It's always going to be there in people's minds. It isn't quite like my late filing fee, but I know that even though I don't feel I did anything wrong, it's out there. It's history, it's on the record.

Q: What procedures will you put in place to make sure that political interference does not happen?

A: We have strict barriers put up around the enforcement territory. We can't talk about individual files, we can't talk about people that were investigated. Until the thing is public, it's private. That way we can go about our investigations and people are confident we're not going on a smear campaign. Our people in the enforcement area are very careful. They don't talk within the organization. The whole enforcement floor is sealed off. I can get on to the enforcement floor, the enforcement people can get on the enforcement floor. Other employees cannot.

Q: What influence do you have in deciding whether to pursue an enforcement case?

A: One of the recommendations . . . is that the chair should not have the authority to give final approval to a notice of hearing, which is the last decision made to proceed in a formal and forceful way. I think I'll take that recommendation. Enforcement is very much a projection of what the commission is all about. It's what people see, it's what the media often focuses on. I think it projects our philosophy, and I think I have to be involved in the process to understand where our priorities are. But if there is a sense the chair has the final say, and that raises questions about whether the decisions that have been made by management are somehow being overly influenced or contradicted, I won't do that anymore.

Q: Why did you stay on as chairman of Tesco Corp. in a dual role? Given the recent controversy at the ASC, did you not want to avoid any perception of conflict?

A: I thought people would accept that it was a transitional issue. I had been the chair of Tesco basically from its birth. I felt I had a significant level of responsibility to the company. There were some management transitions going on at the time that I was helping to get done and was a I bit of the historical glue. I felt I had an obligation.

It was understood by everybody that I was on the board. It was made clear -- I had to stay absolutely out of Tesco. People inside knew that. Ten minutes after I accepted the position (at the ASC), I said, 'I'm going to have to step aside from my position.'

Q: Corporate governance advocates and business academics have suggested you resign as a result of the late filing fee matter. Should you?

A: That has never entered my mind. The failure to file occurred prior to my undertaking the chair position and matters fell between the cracks. It was my responsibility to get it done. I'm not trying to make excuses about it, but this happens to many, many people. I knew that having completed what was almost a useless transaction -- closing out some options and disposing of the shares for which I think I made $171 -- that I was going to be subject to a late filing fee of $1,000. I received an invoice and I paid that fee without complaint, I did not phone anybody, I did not ask for dispensation. I took my lumps. What I thought I was doing was behaving in a way everyone else is treated. You file late, you pay a late filing fee.

I was embarrassed the thing was projected as a 'fine,' that the Ontario Securities Commission had somehow sanctioned me. But that didn't suggest to me that I was not a person appropriate to manage an organization or that I'd lost my securities skills or that somebody would suggest I was dishonest.

Q: The ASC seems to take some comfort from the auditor general's report. And yet the regulator fought very hard to prevent him from getting access to information. In retrospect, do you think the commission made a mistake?

A: I actually don't think there was any choice. The problem with the subject matter is that it was enforcement issues, and they are absolutely confidential. It's paramount that we protect that confidentiality. I think they went as far as they could to do their job in protecting that confidentiality, and the court finally said the confidentiality ban can expand to the auditor general.

Everybody regretted that process pitted them against the auditor general, that it was going to potentially be projected as 'the ASC is hiding again.' It was a very difficult circumstance that I observed from the outside. I've since been asked what I would have done, and I really don't know. I think it worked out all right because the court got to make the call. The auditor general got the information and the commissioners were satisfied they had undertaken their responsibilities, even though they were subjected to a fair amount of criticism.

Q: Why do you think so many ASC staff members came forward with complaints about the commission, whether it was to the finance minister or the media? They felt a poisonous atmosphere existed at the ASC. Is it not possible, in your mind, they had legitimate concerns?

A: Clearly there were issues, so it would be incorrect to say otherwise. I hear many different explanations and theories -- I don't think anybody feels they've got the full answer. Quite frankly, it was a bizarre circumstance, and a bizarre environment. It looks like one of those perfect storms where everything that possibly could get thrown into the mix to exacerbate the problem, did. I've read the statement of defence filed by the ASC in respect of the claim of one of the dismissed employees. It's quite a story, and I don't have any reason to suggest that statement of defence is incorrect. I don't know the facts -- I wasn't there and didn't judge the people -- but some of the circumstances described in that statement of defence are an interesting explanation of what went on. Certainly it was disturbing to me that things would have gotten to that point. It's not my place to allocate blame or question earlier judgments -- I just want to understand enough to make sure something like this never happens again.

Q: Do you have confidence in (executive director) David Linder? He was there through all of the ASC's problems.

A: I know -- and I marvel at his ability to have stood up to excruciating times. I don't have a history with David. I did not know him until I joined the commission. He's hard-working, very intense and dedicated with a long history with the organization. I don't know that I can walk in there, given the institutional history that's been lost, without looking for a great deal of help from people, and he's been one of them.

(advocate comments,.....and the perfect storm at the ASC continues.......2014........but with zero coverage by the Calgary Herald this time:) hmmmmm, I guess they solved one "problem".
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