ABCP's of stealing $35 Billion. Case study 2 for inquiry

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greatest story never told: Updated 2013 After seeing how well the CSA is doing to "protect the public" 800 words

-HOW TO STEAL BILLIONS OF DOLLARS IN CANADA,
-GET HELP FROM 13 SECURITIES COMMISSIONS,
-LIFT $2 BILLION FROM THE PUBLIC SERVICE PENSION PLAN OF CANADA (Retired RCMP and Judges pensions)
-HAVE A JUDGE GRANT YOU IMMUNITY FROM CIVIL PROSECUTION
-HAVE THE RCMP CLOSE THE FILE WITH THE ADVICE AND HELP FROM A SALARIED SECURITIES COMMISSION MAN..(WINK).........THIS IS FREE MONEY!

begins with this self congratulatory paragraph in the 2009 Canadian Securities Administrators “enforcement” report:

click to enlarge "......a good example of collaborative work"....... etc., etc blah, blah..........


And here are the fines we levied on those who acted up:

click to enlarge image, double click to zoom in

So now you have the story..........but this is only the story that 13 securities commissions across Canada want you to know.

Keep reading if you would like to see which parts of the story that the CSA forgot to mention:

In 2006 and years just before, many financial institutions needing to dump toxic sub prime mortgage investments were barred from doing so in Canada due to rating requirements in the securities acts.

So, in typical “self” regulating fashion, (“rules? what rules? we don’t have to follow any stinking rules”) where the six figure salaries of the regulators are fully funded by 9 and 10 figure financial firms, an “exemption” application is filed so that this pesky law does not have to be followed.

Securities commissions accept the very important looking paperwork, with very important sounding words from important lawyers........as well as the......ah......fees.

With “no provisions in the Act to inform the public”, of course all of this has to be done out of sight.............

$35 billion of toxic investment products are dumped on unsuspecting Canadians, municipalities, universities, judges and RCMP pension plans etc., etc. A suicide or two results when this money fails to be returned to its owners.

Securities commissions, (who let the toxins into Canada) lay low for a year or two, until the heat dies down before getting involved. The former vice chair of the OSC who signed some of the actual permissions letting our laws be violated, says “we had no clue”, which is perhaps the most honest evaluation.

After the dust settles, and immunity from civil suit is sought (first order of business) for those involved.......and a judge, not knowing that his own Public Service Pension Plan of Canada was cheated out of $2 billion dollars......signs the immunity order. Hmmm. These fraud artists are so damn good in Canada. Charm the pants off a judge whilst lifting his wallet.

Where was I?

Oh, so immunity from civil suit, some government bailouts and some pressure from a Calgary engineer (Brian Hunter) with a Facebook group of angry victims, results in about 1800 investors (those under $1 million) demanding AND getting their money back. (second history setting “first of its kind” financial event coming out of Calgary) Not before a suicide or two, the family distress, the breakdowns. Thank you securities commissions for “protecting" us.

Approximately two years later, the securities commissions (who have laid low due to their involvement in selling out the public protections and allowing the toxins) decide to now act like they are doing their job. They line up some “offenders” and dispense their “punishment”. Fines of about one half a penny for every dollar cheated from the public are levied against the offenders.......one half a penny per dollar. This is a very profitable business.

Then they (Canadian Securities Administrators) put that in their annual report on enforcement to show the world how well they are “protecting Canadians” from financial crime. (see firms image above) Wow, these guys are almost as good as the fraud artists themselves.........

What they fail to mention of course, is their own culpability in aiding the entire scam to happen, for some money in fees, to pay off a few lawyers salaries. I guess this had to be edited out for space in the enforcement report............

They also forgot to mention about allegations of criminal breach of the public trust that were levied against them with the RCMP IMET. That was an experience.

When the RCMP were forced, kicking and screaming like a child leaving Chucky Cheese, to look at allegations that the Securities Commissions breached the public trust in selling out (“exempting” is the more polite term they prefer) the Securities Act in your province, you will never guess who the RCMP turned to for help investigate the securities commissions. To work alongside RCMP in their investigation of the securities commission breach of trust allegation. Of course, none other than an Ontario Securities Commission man named Mike Watson. An OSC person in the upper salary ranges, who sits on a joint management committee with the RCMP to “co-operate” and counsel the RCMP on economic crimes. Hmmmm. Starting to figure this out yet?

Did I mention that these financial crime guys in Canada were good? By that I mean they have every base, every street corner, every angle covered so well.

If you want to pick the pockets of Canadians, I think this is probably the best way to do it. The exemption list at my securities commission is about 25 pages long, single spaced, of names of financial folks who are funding your securities “protection” officials. Good luck retiring. With government officials like this, you probably don’t need to worry about retirement at all.........

References:

RCMP IMET report,
exemptive relief applications,
securities commission approval reasons: “each of the decision makers is satisfied that the test contained in the legislation for the decision makers to make the decisions has been met”.
Story of ABCP toxic sub prime mortgage investments details
Testimony and submission to Ottawa standing committee (very productive)
Contacts, victims, news media coverage
All found on the public record, and some published at http://www.investoradvocates.ca in and among the 42 topics found there on securities industry misconduct and professional malpractice. Also visit http://www.investorvoice.ca for a look even further back into the history of lying to, and cheating Canadians out of their hard earned money, by trusted professionals and public servants. There are some nasty folks offering to serve you "professionally" here. The good news is that when you learn of their tricks, you can get every dime they helped you lose back, and some justice in the process.

[admin]

click to enlarge

(1550)

The Chair:
Thank you very much.
Folks, you've heard the bells start ringing. We're going to suspend until after the vote, unless there is consent to go another 15 minutes.
Some hon. members: Agreed.
The Chair: All right, we'll continue for another 15 minutes.
Next on our list is Larry Elford.

Mr. Larry Elford (As an Individual):
Thank you.
Ladies and gentlemen, I'm here to tell you how to commit the perfect crime, perhaps with the help of Bill C-52. Let's call it “How to Steal Billions in Six Minutes and Never Be Caught”.
If I were to rob a financial institution in Canada, I am subject to the penalties of the Criminal Code; I think everybody knows that. If a financial institution, however, robs Canadians using any one of a thousand methods that I witnessed while working for financial institutions, they are not even subject to the penalties in this proposed bill, as I read it. They fall under the Securities Act. Investment crime is more likely to fall under the protection—yes, I said “protection”—of securities commissions in 13 provinces and territories than to be prosecuted. Most of the time, independent police agencies are not even involved.
I worked in the financial industry for 20 years and I found it nearly impossible to hold a discussion about ethics and honest treatment of customers, so strong was the culture and addiction to sales, commissions, and bonuses. Most Canadians, however, are of a mistaken impression that our financial institutions are so trustworthy as to be above examination.
I would like to challenge this dangerous conventional wisdom, and I'll go so far as to call it a form of collective insanity.

The Chair:
Mr. Elford.

Mr. Larry Elford:
Yes?

The Chair:
I've just been advised that it's possible the vote may happen much sooner than in 30 minutes.
We are going to suspend, and we'll be back as soon as we're done voting.

Mr. Larry Elford:
That's no problem.

The Chair:
And you can start over.
The meeting is suspended.
(1550)

(1645)


The Chair:
I reconvene the meeting.
I believe that when we left off, Mr. Elford, you had started to speak. I invite you to start from the beginning so that we have a complete picture of what you're telling us.

Mr. Larry Elford:
Thank you, Mr. Chairman.
I was saying that I'm here to tell you how to commit the perfect crime, possibly with the help of Bill C-52. I mentioned the Criminal Code of Canada and the fact that if I were to rob a financial institution, the Criminal Code would probably apply to me, but in a financial institution in Canada governed by the Securities Act in 13 provinces and territories, there's any one of a thousand methods that I've witnessed of robbing the savings of Canadians and Canadian taxpayers, and they're often not subject to criminal sanctions of any kind. Maybe on the fingers of my hand, I could come up with the number of criminal penalties against actual subjects in the last 10 or 20 years.
Investment crime is more likely to fall under the protection of securities commissions. That word is terrible to say: that securities commissions are protecting investment crime. But that's what I saw over 20 years of working in finance. Most of the time, the independent police agencies are not involved and not even notified.
I worked for 20 years in the financial industry. I found it nearly impossible to discuss ethics and honest treatment of customers. The culture of sales commissions and bonuses was far too strong. Most Canadians, however, are of a mistaken impression that our financial institutions are so trustworthy as to be above examination. I mentioned that I'd like to challenge that dangerous piece of conventional wisdom and that I'd like to go so far as to call it collective insanity.
Most Canadians have also been sold a story that our Canadian financial institutions are the world's strongest. While that may in fact be true, it ignores the possibility that they may be strong because they are legally allowed to be predatory and are protected from real competition and real examination in Canada. It ignores millions of dollars that I watched being skimmed from your investment returns and your pension accounts by predatory sales practices dressed up in a disguise of “investment advice”, damage that cuts the retirement of the average Canadian investor by half.
Also ignored are billions of dollars in damages every year from a system designed to place the interests of financial institutions ahead of their customers'—a system we do not speak of, but which exists in actual practice. It ignores investment frauds that are penalized by authorities in the United States, while here in Canada the same abuses are considered standard industry practice, and they continue to harm Canadians each and every day. Regulators in Canada are allowed to turn a blind eye to all of these. It ignores hundreds of billions of dollars in damages by companies like Northern Telecom, Global Crossing, Enron, Eaton's, and a thousand others that are used in some way to fatten investment bankers, lawyers, or CEOs at the expense of your financial security.
Financial abuse by the institutions we trust is costing Canadians more money each year than the cost of every other crime in the country combined. I used Justice Canada's website for my figures. Yet we act like good Canadians and we praise our financial institutions for being among the strongest in the world. It's a little bit like praising the schoolyard bully for being so well fed, after he has stolen everyone's lunch.
Let me reveal four simple ingredients I found in our financial system that allow billions of dollars of financial abuse to take place each and every year.
The first ingredient in making financial crime pay is having the ability to self-regulate, to have our own in-house policing system, and to use this system to often bypass real criminal investigation and prosecution. Part of this includes securities commissions, and 13 of them across the country act more and more like the corrupt sheriff in every Smokey and the Bandit movie I've every seen. They seem to feel that they too are above examination.
The second ingredient is that the financial industry, rather than the taxpayer, pays the salaries of these regulatory agencies. That means that clever financiers get to choose who to hire to regulate financiers. Imagine if you were a criminal mind and you had the ability to choose who you wanted to police yourself.
The third ingredient in making financial crime pay is to pay them about triple what they would earn in the same job elsewhere. The salary of the head of the Securities and Exchange Commission in the United States is capped at $162,900 per year. The 13 securities commission heads in Canada are paid as much as four times this amount, each one of them. I'm told there were once 90 staff members at the Ontario commission alone who were each paid more than the top man in the United States.
(1650)

Overpaying our regulators makes them highly compliant, conflicted, and more willing to say yes to the financial industry. The Canadian public, on the other hand, does not pay their salaries, and members of the public are not usually even allowed in the front door of any securities commission in Canada. Instead, they are sent to non-government industry groups where they are spun around by an industry-run kangaroo court process. The public will not be helped but simply abused a second time. Please don't take my word on this; ask any abused investor.
If you were shopping for a list of ingredients required to make financial crime pay, last but not least is the ability to buy permission to violate the laws of Canada. In fact, 13 securities commissions, acting in concert, will allow any financial institution in the country to violate our laws simply by filing an application to do so. I have in my hand a list of several thousand such legal permissions that have been granted without informing the public of a single, solitary one. This is the greatest gift you could possibly ask for as a criminally minded financier: to be able to break any law you wished in this country in pursuit of profits.
Finally, we come to the helpful effects of Bill C-52. I see nowhere in this bill where it applies to public market fraudsters. In fact, my reading of it shows that subsection 380(2) of the Criminal Code, relating to public market fraudsters, has been removed or is not present in this bill. That would be a fantastic gift from the writers of this bill to yet again the financial markets of Canada; we can continue to hide our crimes inside our own private regulatory system with no outside oversight or interference.
Thank you for your time.

The Chair:
Thank you.


http://www.parl.gc.ca/HousePublications ... e=E&Mode=1

justice committee , ottawa , parliament, C21, C52

[admin]

WHAT DOES THIA HAVE TO DO WITH FINANCIAL CRIME?? read on

Anti-smoking group has mixed feelings about Big Tobacco fines

Last Updated: Friday, August 1, 2008 | 11:51 AM ET CBC News

Tobacco giants to pay up to $1.15B over contraband sales
A prominent anti-tobacco group says it's simultaneously pleased and disappointed by the huge fines levied against two of Canada's largest tobacco companies.

Imperial Tobacco and Rothmans Benson & Hedges admitted on Thursday their involvement in cigarette smuggling schemes during the late 1980s and early 1990s and agreed to fork over as much as $1.15 billion in fines and civil payments in connection with aiding contraband tobacco sales.

Imperial Tobacco was issued a $200-million fine and will pay up to an additional $400 million over the next 15 years, while Rothmans Benson & Hedges was fined $100 million and will pay up to $450 million more in civil payments over the next 10 years.

While the Non-Smokers' Rights Association, a non-profit health organization headquartered in Toronto, is pleased with the fines, the anti-tobacco group is disappointed no charges will be laid against company executives.

"If you or I had any intention of defrauding the government of a couple of million dollars, we'd be thrown in jail," said François Damphousse, the organization's Quebec director.

"Why aren't the executives facing such charges for having defrauded the government of billions of dollars?"

Damphousse also noted the fines don't come close to making up for what the government lost in tax revenue at the height of the smuggling operation. His group has fought hard to keep taxes on cigarettes high

Joseph Erban, who runs smoking-cessation support groups at Montreal's Jewish General Hospital, recalled that 20 years ago, massive amounts of cigarettes were being smuggled into Canada from the United States.

"Cigarettes were readily available," Erban said. "You didn't have to go very far to get an illegal carton of cigarettes for half the cost of what they would be selling at the retail level."

Expensive cigarettes deter people from smoking, Erban said. He said the cheap, black-market smokes bootlegged in from the U.S. made it difficult for many people to quit.

(same man at the "get out of jail free" side of both crimes, tobacco smuggling as well as financial ripoff of billions)

http://www.cbc.ca/news/health/story/200 ... oking.html

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Tobacco giants to pay up to $1.15B over contraband sales
Fines, payments largest 'in Canadian history': O'Connor
Last Updated: Thursday, July 31, 2008 | 1:22 PM ET CBC News

Canada's two biggest tobacco companies pleaded guilty Thursday to customs charges and agreed to pay as much as $1.15 billion in fines and civil payments in connection with aiding contraband tobacco sales.

Imperial Tobacco was issued a $200-million fine and will pay up to an additional $400 million over the next 15 years, while Rothmans Benson & Hedges was fined $100 million and will pay up to $450 million more in civil payments over the next 10 years.

The companies pleaded guilty to "aiding persons to sell and be in possession of tobacco manufactured in Canada that was not packed and was not stamped in conformity with the Excise Act."

Revenue Minister Gordon O'Connor called the fines a "clear message" to companies that the government is committed to fighting illegal tobacco in Canada.

The additional amounts the companies have agreed to pay by way of civil settlements with the federal government, Ontario and Quebec will be administered by the Canada Revenue Agency. The civil agreement also includes a commitment by the companies to combat contraband tobacco activities in Canada.

"These represent the largest criminal fines and civil settlements in Canadian history," O'Connor told reporters in Lévis, Que., after the fines were announced. "The companies have accepted their actions and have agreed to a comprehensive settlement package."

In a release, Benjamin Kemball, president and CEO of Imperial Tobacco Canada, said the company was " pleased to have resolved this issue.”

Minutes after the fines were announced, Rothmans released a statement saying it has agreed to a friendly takeover bid by U.S.-based Philip Morris International Inc. for $30 per share in cash, valuing the company at $2 billion.

'No company is above the law': RCMP
The charges stem from contraband tobacco sales between 1989 and 1994, which involved products being produced in Canada and shipped to locations in the United States to be distributed to smugglers or black market distributors, who brought it back into Canada for illegal sale, the RCMP said.

The fines and civil payments conclude more than eight years of investigation by the Mounties in Ontario and Quebec, assistant RCMP commissioner Mike Cabana said.

“The message sent today is that no company is above the law,” he said.

Cabana said the past practices do not reflect today's "huge" tobacco-smuggling business, which he said is dominated by foreign manufacturers smuggling products into Canada with the help of organized criminal groups.

http://www.cbc.ca/news/canada/story/200 ... ement.html

(advocate comments: Fascinating to think that the head of the company (Purdy Crawford) involved in the largest crime (at that time) in Canada, is also actively involved in the next largest crime in Canada, the Asset Backed Commercial paper crisis..........I make no allegations, but leave you responsible to your own) 4 minute CBC News clip here http://www.youtube.com/watch?v=ZsvJjOCDT9s&feature=share&list=FLy8dpTRZHEz-0JBa_l0w7AQ

[admin]

THANK YOU CANADIANS FOR LETTING US FINANCIAL PEOPLE POLICE OURSELVES, IT IS WORKING OUT SPLENDIDLY!!:)
==========================================================================================================
(a November 10th, 2011 update on the largest financial swindle in Canadian history. A swindle that took money from all Canadians, rich or poor, and all governments, municipal, provincial, federal, and all taxpayers)
(advocate comments above, analysts report starts below)

The buddy system at the Ontario Securities Commission is alive and well, when you consider that the three OSC Commissioners James Turner, Mary Cordon and Paulette Kennedy reduced the enforcement staff's recommended penalty from $16.5 million to $2.0 million in yesterday's Coventree penalty decision, with the two top executive offices fined only $500,000 each, payable by Coventree. The three commissioners had found Coventree and its two top executive officers Dean Tai and Geoffrey Cornish guilty of disclosure offences under the Ontario Securities Act on September 28, 2011.
Here is a breakdown of the penalties
http://www.osc.gov.on.ca/en/Proceedings ... entree.htm

· Coventree pay an administrative penalty of $1,000,000;
· Coventree pay $250,000 of the costs incurred by the Commission in connection with the hearing of this matter;
· each of Cornish and Tai are prohibited from becoming or acting as a director or officer of a reporting issuer, other than Coventree, for a period of one year;
· each of Cornish and Tai shall pay an administrative penalty of $500,000;
· for greater certainty, this Order is not intended to prevent Cornish or Tai making any claim for indemnity from Coventree in respect of the amounts payable by them.

Coventree was a specialized investment bank responsible for packaging 46% of Canada's Non Bank Asset Backed Commercial Paper (Coventree owned 100% of Nereus Financial) , which failed on August 13, 2007.



The current marked to market losses on the Non Bank ABCP market are at $10 billion, four years after the financial crisis occurred. At their peak these losses were $25 billion in the Fall of 2008 after the Lehman bankruptcy in the U.S.
Canadian Non Bank ABCP Marked to Market Valuation
Outstanding Amount
Wtd. Avg. Price
MTM Valuation
October 31, 2011
MTM Loss
October 31, 2011
MAV 1, 2 & 3 All Classes
$29,417,766,387
$66.23
$19,482,287,148
-$9,935,479,239

Source:
Market Prices from GMP Investment Management for October 31, 2011
Diane A. Urquhart Analysis

The Canadian investment banks quietly settled about $5.8 billion of this toxic product in their retail money market funds and brokerage accounts, but two small dealers, Canaccord and Credential Securities, refused to settle with their retail Non Bank ABCP owners. Ultimately, the two hold-out dealers settled with their 1800 retail clients for $187 million on January 19, 2009, which was the largest retail settlement in Canadian history that returned 100 cents on the dollar of damages, plus interest and legal costs. I was the financial expert and Henry Juroviesky of Juroviesky LLP represented the unsettled retail owners of Non Bank ABCP.

Getting your money back after an intense 18 month stressful fight is not justice. Wynn Miles, a retail owner of the Non Bank ABCP, wrote to the OSC on Oct. 26, 2011 in the email provided below. She says, "Mr. Cornish and Mr. Tai should have known the weaknesses of these complex investment products, and should have administered them in a more responsible manner that did not breach security regulations. It is my hope that the OSC will ensure these senior executives of Coventree are held personally responsible for their actions."

The OSC is effectively condoning the creation and distribution of toxic investment products by Canada's investment banks by imposing ridiculously low fine after a thorough hearing of the facts and a finding of serious securities offences. In fact, it was the OSC that facilitated the distribution of this toxic investment into retail accounts when it made the following regulatory changes in 2005 and 2006.

· In 2005, the $50,000 minimum sale allotment test for the commercial paper prospectus exemption was changed by the Ontario Government to a test based on getting an approved credit rating from an approved credit rating. There was no simultaneous introduction of government quality control supervision over the credit rating agencies, who were given investor protection responsibilities in the public interest.

· In 2005, the Ontario Government provided an exemption to the credit rating agencies as experts subject to civil liability for misrepresentation in information provided to the secondary market. This exemption from civil liability occurred at about the same time that the credit rating agencies were given public interest responsibility for determining the safety of commercial paper, without any government supervision.

· In 2006, the Ontario Securities Commission (OSC) gave exemptive relief to BMO, CIBC/CIBC World Markets and Toronto Dominion Bank to distribute Non Bank ABCP on the basis of just one credit rating agency meeting its minimum credit rating standard, even though the other three credit rating agencies gave ratings that were below the minimum standard in the regulations. These exemptive relief diluted the rigour of not failing any of the DBRS, Standard and Poor’s, Moody’s or Fitch minimum rating standards in the regulations. On Non Bank ABCP, DBRS was always the one credit rating agency giving top credit ratings, while Standard and Poor’s and Moody’s credit ratings failed the minimum standards for commercial paper set out in the regulations.

The OSC, AMF and IRROC collective fines and settlements from the 7 investment banks who settled and the Coventree fine is only $140 million. All of the investment banks have received immunity from lawsuits for any cause of action from the ABCP CCAA Final Plan legal release approved on January 19, 2011. If the powerful perpetrators toxic investment products do not receive financial penalties or jail sentences when found guilty of securities offences, then the next toxic investment product earning hundreds of millions of dollars of investment bank and legal fees is already under development.

U.S. District Judge Jed S. Rakoff is speaking up on November 10, 2011 about the U.S. SEC's leniency in its $285 million settlement with Citibank for its role in selling a structured credit product that was designed to fail. Citibank earned an illicit profit of $160 million, while investors lost $700 million.
Wall Street Journal, Judge Unloads on Deal SEC Struck With Citi, November 10, 2011

http://online.wsj.com/article/SB1000142 ... 70848.html

Who in Canada ever stands up to stop the complacency and buddy system at the OSC?

For additional information, contact me.

Diane A. Urquhart
Independent Financial Analyst
Mississauga, Ontario
Tel: (905) 822-7618
Cell: (647) 980-7618
E-mail: urquhart@rogers.com

[admin]

An simpler explanation of the sub prime debt failure.

Simplified. A Primer: Understanding Derivatives



Heidi is the proprietor of a bar in Detroit ...
She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.
To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.


Heidi keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit .


By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.
Consequently, Heidi's gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit.
He sees no reason for any undue concern because he has the debts of the unemployed alcoholics as collateral!


At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into [flash=]DRINKBONDS[/flash].
These "securities" then are bundled and traded on international securities markets. 
Naive investors don't really understand that the securities being sold to them as "AAA Secured Bonds" really are debts of unemployed alcoholics.

Nevertheless, the bond prices continuously climb - and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.
One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi.
 Heidi then demands payment from her alcoholic patrons.  But, being unemployed alcoholics -- they cannot pay back their drinking debts.


Since Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and Heidi's 11 employees lose their jobs. 
Overnight, DRINKBOND prices drop by 90%.
 The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
 The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities. 
They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.
Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.


Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.
 The funds required for this bailout are obtained by new taxes levied on employed, middle-class, nondrinkers who have never been in Heidi's bar. Apply this model to an entire world or an entire continent of bars and you have the equivalent of our sub prime mortgage crisis of late.

 Now I understand

[admin]

click to enlarge (Image from Ontario Legislature investigation into Securities Commission in 2010 or 2011 I believe)
Oct 15, 2011

To: Ron Liepert, Alberta Finance Minister

Dear Mr. Liepert,

Further to unanswered questions by Alberta Finance by your predecessors, I wish to ask the following, and request a clear and succinct reply to six direct questions below. It is a matter of urgent public interest to Albertans. (background at http://www.albertafraud.com )

1. Why can investment sellers violate the law in Alberta and sell tainted products?
2. Why does our crown Alberta Securities Commission allow this? Profit from this?

More than a billion dollars of substandard investments have been sold in Alberta, with the permission of the Alberta Securities Commission. (ASC).  In Canada $32 billion has gone missing with bad commercial paper (ABCP).  

The cost of  every other crime in the country is approx $40 bil according to Justice Canada, so we have that one financial crime equalling nearly every other crime in Canada combined.  

Several thousand legal exemptions of all kinds, have allowed substandard investments and advice to be provided to Albertan’s, without any notice being sent to the investors.  To consumers.

Six questions went unanswered by Iris Evans despite eight requests and Ted Morton three requests.

3. -What public interest is served by allowing financial laws to be violated?  

4. -Why are laws allowed to be broken without public input and public notice? In secret.

5.-Why is Alberta Finance suppressing this information, rather than protecting the public interest?
6.-Where is evidence of the public interest obligation of the Securities Commission?

Here is the only answer received to date from the Alberta Finance:

“In this particular situation (ABCP) it appears the commissions carefully considered the situation and acted properly in granting the exemptions.”

Here is the official reason given by the ASC for most legal exemptions:

“Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.”

These answers are non answers and they are an insult to the public. There appears to be a damaging incestuous relationship between the financial services industry and our government securities regulator. Our Minister of Finance should be moving forcefully towards honest accountability. Anything less may constitute a breach of trust. Anything else leads one to assume a corrupt relationship between the ASC and industry.

These matters have caused billions of dollars to be siphoned out of our economy assisted by 13 securities commissions.   Will you Mr. Liepert please take steps to answer these questions for the benefit of all Albertan’s?

[admin]

http://www.theglobeandmail.com/report-o ... le2183316/

Coventree misled investors on ABCP: OSC
JACQUIE MCNISH
Globe and Mail Update
Published Wednesday, Sep. 28, 2011 12:07PM EDT

A panel of the Ontario Securities Commission found that Coventree Inc. and two of its senior executives breached securities laws by misleading investors in 2007 about underlying weaknesses in the asset-backed commercial paper (ABCP) market.

Coventree was a publicly traded Toronto investment bank company that designed many of the complex structures which issued ABCP, short-term notes that were backed by mortgages and other assets. The two senior executives cited by the OSC are Geoffrey Cornish, a founder and president from 2006 to 2007, and Dean Tai, founder and chief executive officer from 2006 to 2007.


The OSC issued a 153-page decision on Wednesday, which followed weeks of hearings late last year. The decision detailed extensive private communications between senior executives and other ABCP players about the increasingly frail market for ABCP. Concerns about toxic subprime mortgages in the U.S. had infected the market in the summer of 2007 and a number of big ABCP investors were balking at buying the notes.

In August, 2007, the market for non-bank issued ABCP froze and thousands of Canadian investors were left holding $32-billion of notes that could no longer be traded or redeemed.

“It is clear to us having considered and reviewed the extensive evidence submitted to us over 45 hearing days, that Coventree and a number of the dealers distributing Coventree-sponsored ABCP from Aug. 1, 2007, to Aug. 13, 2007, had knowledge of liquidity-related events and developments in the ABCP market that were important to investors considering the purchase of ABCP. It is unlikely that any investor would have purchased Coventree-sponsored ABCP, or any other ABCP, if they had been aware of those market events and developments,” the OSC said in its decision.

The OSC's decision included pages of private e-mails between Coventree executives and board members that show the company had learned as early as Aug. 2 that skittish investors were balking at buying ABCP.

Internal documents portray an increasingly distressed executive team that was worried behind the scenes, but in public pursued a strategy of calming clients. Mr. Tai was so relieved that the notes were still trading on Aug. 3 that he told Coventree directors in an e-mail that “we managed to roll our paper today.”

Ten days later, investor fears brought the ABCP market to a halt. A national committee of bankers and investors spent the next two years restructuring the tainted notes. Although most individual investors recovered their investments, many pension funds and other big investors were forced to absorb hundreds of millions of dollars in writedowns on the notes.

Coventree is in the process of winding down its business. The company reported a loss of $4-million in June and shareholders agreed that month to dissolve the company. The decision was stayed until the OSC released its decision.

Coventree issued a statement Wednesday summarizing the decision but saying little else.

“Coventree is continuing to review the commission's decision with counsel and is considering its options,” the statement reads.

Spokesmen for Mr. Cornish and Mr. Tai could not be reached immediately.

The OSC has asked Coventree and the two executives to schedule a sanctions hearing within the next 30 days.

[admin]

Barclays loses legal battle over ABCP
JEFF GRAY — LAW REPORTER
Toronto Globe and Mail
Published Tuesday, Sep. 13, 2011 7:46PM EDT

An Ontario Superior Court Judge has ruled that Britain’s Barclays Bank PLC engaged in “fraudulent misrepresentation” in a tangled dispute that followed the meltdown of Canada’s asset-backed commercial paper market in 2007.

In the ruling, released last week, Mr. Justice Frank Newbould also questioned the reliability of testimony from Barclays Capital’s Canadian-born co-CEO, Jerry del Missier.

The decision declares that Barclays, one of the world’s largest and most respected banks, “breached its good faith obligations” and sent out “misleading” statements. Barclays completely rejects the findings and is mulling an appeal.

The judgment – in a fight over investments that Judge Newbould calls “byzantine” – provides a look inside the collapse of Canada’s $30-billion asset-backed commercial paper (ABCP) market, which seized up as the first signs of the global financial crisis began to set in four years ago.

Other banks in similar positions were spared the threat of litigation because they participated in the Montreal Accord negotiations that restructured the ABCP mess. The result of this trial suggests that was a wise move.

In 2009, Barclays launched a lawsuit against Devonshire Trust, which was known as a “conduit” in the ABCP market. Devonshire’s largest investor was the large public sector pension fund, the Caisse de dépôt et placement du Québec.

Devonshire, partly owned by the National Bank, had been set up in 2006 to buy income-producing assets from Barclays with money made by issuing ABCP to other investors. The assets in question were complex: two so-called “synthetic leveraged super senior credit default swap” contracts. Devonshire paid $600-million to Barclays for them.

According to the judgment, the deal took nine months to negotiate. Barclays was to pay a monthly premium to Devonshire for what was essentially “credit protection.” Devonshire agreed that if losses in portfolios of debt obligations – corporate bonds and mortgage-backed securities not owned by Barclays – reached a predetermined level, it would pay a specified amount to Barclays.

If there were no defaults in those portfolios, Barclays would have to return $600-million to Devonshire in 2016. That money, and another $100-million of Devonshire cash, is now at stake in the litigation.

In a footnote, the judge compared the credit-default-swap deal to a sports bet: “The concept is not different than one boy betting against another that the Toronto Maple Leafs will not end up worse that some agreed place in the standings … in the next NHL Season.”

Barclays had also signed on to be a “liquidity provider” for Devonshire, agreeing to provide funds to repay ABCP notes issued by Devonshire in the event of a “market disruption,” in exchange for premiums paid by Devonshire.

The precise definition of “market disruption” was a “hotly contested issue” in court, the judge writes. But there is no question that in August of 2007, most observers outside a courtroom would say the ABCP market was disrupted, as it froze completely while panic spread about defaults on U.S. subprime mortgages.

Devonshire sent the required market-disruption notices to Barclays, asking for emergency cash infusions. When they didn’t arrive, Devonshire told Barclays it was in default.

Meanwhile, meetings between the market’s big players, held in Montreal in the days after the crisis, would result in the Montreal Accord. But Barclays refused to sign on for this restructuring, and held its own talks with Devonshire investors.

By late 2008, the Caisse was the only holdout. Both sides had agreed to suspend the effects of the default notices during their negotiations.

Each day, Barclays sent an e-mail to Devonshire (which was not involved in the talks) indicating that the “standstill” agreement was still in place while negotiations with the Caisse continued. Like all the e-mails, the last one, sent Jan. 9, 2009 stated that the agreement would remain “to allow for these negotiations to continue.”

But Judge Newbould ruled that these statements were “misleading.” Despite this assurance that talks were continuing, Barclays had just issued an “ultimatum” to the Caisse – an ultimatum, the judge ruled, that Barclays knew the Caisse would never accept. Judge Newbould ruled that the evidence showed Barclays had already decided to end the talks, kill its deal with Devonshire and file a lawsuit.

While senior Barclays executives, including Mr. del Missier, testified they believed the talks with Caisse would still continue, Judge Newbould said he did not buy it.

“If Mr. del Missier held the rosy view that he testified to, of which I have considerable doubt, it appears that it would have been a misinformed view,” the judge writes.

Judge Newbould concludes that Barclays failed to “be honest and candid” with Devonshire.

“While it is not strictly necessary for the purposes of the misrepresentation claim to determine whether the misrepresentations amounted to a fraudulent misrepresentation, in my view they did,” the judge writes.

In addition to ruling in favour of Devonshire, the judge also dismissed the methodology the bank had used to argue that it had lost $1.2-billion, pegging its losses instead at just $12,000.

A spokeswoman for Barclays Capital in New York, Kerrie Cohen, said the bank did nothing wrong.

“We are disappointed in and disagree with the Court’s decision and are carefully reviewing our options with respect to an appeal,” Ms. Cohen said in an e-mail.

“We believe we acted in full accordance with our legal and commercial rights in terminating the swaps transactions, and we completely refute that we acted in bad faith or made any misrepresentations in connection with the events leading up to our termination of the swaps.”

Despite the ruling, the complex dispute is not over yet. In addition to a possible appeal by Barclays, key issues in the case were actually separated into two trials, the second of which has yet to occur.

Toronto lawyer Tom Curry of Lenczner Slaght Royce Smith Griffin LLP, who acted for the trustee of Devonshire Trust, said the trial was hard-fought.

The ruling, he said, was a reminder that banks must be upfront with clients and business partners: “It’s the way I think that all Canadians would think that the law works. And that’s why, although it’s a case surrounded by enormous complexity, at its essence it is a case about commercial behaviour.”
http://www.theglobeandmail.com/report-o ... clecontent

[admin]

IIROC rejects Deutsche request : “ Canada's securities market regulator has rejected a request from Deutsche Bank AG to halt proceedings in a case involving the German- based bank's sale of asset-backed commercial paper to clients in Canada. However, the Investment Industry Regulatory Organization of Canada granted a delay in the case, saying it will now begin on an undetermined date to be set as soon as possible after April 4 next year. IIROC has accused Deutsche Bank of failing to notify clients about information it had received in 2007 about growing troubles in the U.S. subprime mortgage market that would have an impact on the ABCP market. Canada's market for non-bank ABCP froze up shortly afterward. Deutsche Bank argued the case should be halted because it could not compel people to testify at an IIROC hearing who are not IIROC members but were involved in the ABCP market. In a written decision released Tuesday [ Oct. 26, 2010] , an IIROC hearing panel dismissed the request, saying a
10
decision should be made in the course of the hearing about whether a lack of any testimony unfairly prejudices the bank's case.” https://secure.globeadvisor.com/servlet ... RBTICKERAA TL_1 and http://docs.iiroc.ca/DisplayDocument.aspx? DocumentID=E1E788BDCAF64A2485ACDFC5BF46B841&Language=en


from ken at
canadianfundwatch.com The Fund OBSERVER Mid -November , 2010

[admin]

The perfect crime, in eight steps.

Step one
The plan

It is 2005. In a room somewhere in a tower in Toronto, sit the men, finance experts pondering how to profit from markets today. Where is the biggest kill?

“How about this? We create trusts, take investors money and put into the trusts telling them that they are secured investments.........”

In a game of financial “hot potato” substandard investments get artfully passed from sophisticated investors (financial dealers) down to unsophisticated buyers (retail investors). The game is to pass these investments down to the ultimate loser as fast as possible, earn your commission and move on the the next deal.

Along come sub prime mortgages, people betting against those sub prime mortgages, institutions hedging the sub prime notes they already have, people concerned about the upside or the downside of this Asset Backed Commercial Paper.

They cook up these trusts, with cute names such as “Apollo, Rocket, Opus, and Planet”, take money off ordinary Canadians, send it overseas to a German bank as collateral against the sub prime market failing. God only knows what will happen in the end, but we will have our millions in fees, so do we really care? This is dual agency (acting on both sides of the transaction, seller AND trusted advisor) in Canada. Nothing like that is allowed in real estate or other professions, but investments in Canada is still a game of self regulation, which in other words means, “anything goes”.

Step two
The con

These trusts do not qualify to be sold under most securities law in canada, so we need to put some lipstick on the pig with two items. First we need to have a better credit rating, and second, we need to get the securities commissions to look the other way for a little while. The credit rating agencies are for sale, so that one is easy. Luckily there is a loophole in the securities regulatory system that grants the regulators the “discretion” to hold sway over the law from time to time. So this too will be a breeze. These so-called “regulators” get to “sell” permission slips to violate the securities act. This happens every day in Canada, to practically every sales organization in the country, and the beauty is that “there is no provision in the act that says we have to notify the public” when we do this. (OSC quote) What a gift!


Step three
The insiders


We approach friends at one of 13 securities commissions.
We pay their salaries so we have an easy entrance. Thank god for self regulation.

One of the gifts of self regulations is that we appoint, pay and some would say “own” the regulators of financial products in Canada. That makes it a simple matter of paperwork and an exchange of money to get these same financial regulators to approve of something called a “legal exemption”. Simply put, we apply at the easiest or closest securities commission for permission to sell these “hot potato” investments which cannot otherwise be sold. They do not meet our laws without this exemptive relief. All 13 securities commissions grant the relief, since all of them depend on the millions of dollars of revenue that we pay them for just this kind of thing. Presto! An otherwise illegal investment is turned into a legal one, and we do not even have to notify the public that we took this hidden step.

The second gift given to those who “self regulate” is a little game in Canada called ther “passport” system, whereby if one securities commission approves of a legal exemption, typically (and for money) the other twelve will go along without question. We are told that the passport system enables a smoother flow of securities rules across thirteen jurisdictions but what it does best is assist in the flow of financial abuse across those jurisdictions.




Step four
The crime
We dump this product immediately onto other dealers like National Bank, Cannacord capital etc, knowing that they will “dispose” of the corpse by pushing it off onto unsuspecting retail investors. City treasury’s, mom and pop investors, university’s etc. Their “retail sales force” motivated by commissions and loyalty to the company, get into high gear, get on the phone and start calling the suckers, er customers that they hope to unload this product on. It must be noted and applauded that in Canada TD Bank was one of the only financial dealers who did not try to ride this gravy train. Thank you TD.

Step five
The lookouts

You always need to be on the lookout for the cops, even when you have “legal permission” to break the law. It just pays to cover all the bases.
In that respect our highly regarded regulators and self regulators have made their way into the RCMP and onto something called “joint management committee’s” inside the commercial crime division, the IMET. (Integrated Market Enforcement Team) With our own industry people, from our own industry associations so carefully placed, and above examination, we can “help” to ensure that the right people do not get criminally investigated.

Osc, iiroc, other industry groups working inside the RCMP. Sitting on joint management committees, to “help” the RCMP.

Step six
The cleanup man


To put additional insurance on making sure that the right people do not get charged for this perfect crime, we need a “cleanup man”. The mafia-like guy who can dispose of any traces of the crime, any bodies (figuratively speaking, this crime involved no loss of life). In the United states when the sub prime crime reared its head, there was involvement by the president, FBI, Treasury secretary, Federal reserve as well as congressional hearings and senate hearings to question the culprits. Here in Canada, all those people turned away for some reason. Also turning away were the self regulators, the securities commissions (who granted the permission to violate our laws). Perhaps they should be afraid of being investigated themselves?

No, the person chosen to clean up the mess, and try to make sure the right people do not get hurt was a private lawyer, chosen for his ability and his connections in doing this kind of thing. Previously he had involvement in tobacco smuggling operations, called the largest fraud in Canada by the RCMP) and he was able to get himself and senior exec’s free of criminal matters in this case. A fine of one billion against the company, (Imperial Tobacco) while he was the president of the parent company. So there is your experienced cleanup man.
The fist thing he does is to try and negotiate immunity from civil and criminal prosecution for the “boys” in the back-room. He succeeds in getting civil immunity for the boys but criminal immunity is not allowed. Not to worry, as the odds of any police in Canada investigating this one are slim to none. Remember that we have some of “our boys” on the inside at the RCMP.

Step seven
The penalty

One half of one cent for every dollar missing. Not bad.
After the cleanup, after the damage control, after negotiations for immunity, and a great deal of government money to pay back investors, the securities commissions awake from their slumber, feel that it might be safe to poke theirs heads up, and take some perceived action. They know that 99% of Canada still does not know that they granted permission in the first place to allow this product to be sold, so they feel pretty smug in stepping up and imposing “pretend” penalties on the culprits. Little dow we know of the incestuous relationship between the culprits and the “regulators”. Susan Wolbergh Jenah was the vice chair of the OSC when she was busy signing her name to legal exemptions to allow these dubious products to be sold without meeting our laws. Then a few years later she moves to the head of the IIROC (gang of investment dealers) and lo and behold she comes out and says that the dealers did not know what they were selling?? I wonder if she had a clue when she allowed them to be sold, or if she was just happy doing what she was told in order to collect a $400,000 salary at the time. Her new salary at IIROC went to $700,000. It is amazing what you can buy with a six figure salary. Do not go to jail. Collect $32 billion.

Step eight
The profit

99.5 cents profit on every dollar taken, or if not all profit, at very least we can say that 100% of losses born by investors and the taxpayer. “Shoot, I was hoping for 99.9%”, you could almost hear the investment dealers say. “We will have to give the securities commission people a $100,000 raise in salary so they get it “right” next time”.

The fines imposed amount to a huge number in the newspapers, but in actual fact amount to less than one half of one penny for each and every dollar missing. $32 billion missing. Hundreds of millions of dollars in fees to the manufacturers, sellers, lawyers, regulators, receivers, mafia-type cleanup man, and so on. And nobody can be sued, nobody going to jail.

$32 billion is not quite equal to the cost of each and every other crime in the country, combined. Just about. Also just about the cost of running the province of Alberta every year. From one crime. One set of legal exemptions.

It is hoped that Canada gets an improved securities regulatory system soon, as it is unlikely that the country can afford to let the most cunning, clever financial people police themselves any longer on the honor system.

Step Nine.

When some of the investors who lost money make official complaint to the RCMP IMET financial police, the RCMP does a quick dismissal of the case, without interview of experts who volunteer info and expertise. Guess who helps them with the decision to dismiss and with writing the final report? An official on loan to the RCMP and on the joint management committee of the RCMP from the Ontario Securities Commission. The very same OSC that gave investment dealers permission to exempt themselves from the law. SOooooo, despite the RCMP receiving a criminal complaint that securities commissions were in breach of the public trust, for selling out the public interest protections of the law.......the RCMP allowed the organization that was involved in committing the crime, to participate in closing the file on the crime. It just does not get any more "organized" than that, and it does not get more perfect than that.

We learn during this process that the budget for the entire RCMP IMET force Canada wide, is under $20 million dollars per year, which is equal to or less than the budget for my police force in a city of 78,000 people. Do we really want to catch our most trusted criminals, or is this just a pretense?

[admin]

Dear Sergeant Fozard,

The Ontario Securities Commission is presently holding an inquiry to investigate the actions of "Coventree Inc,"' prior to the collapse of ABCP in August 2007. A brief description of today's proceedings is available at the following link:

http://www.vancouversun.com/business/fp ... story.html

It is alleged , by OSC, that:

"Coventree Inc., the largest player in Canada's collapsed ABCP market, knew about the growing fear among investors around subprime mortgages long before demand for ABCP imploded in August 2007....but did not disclose these worries (to) the broader market. Instead, Ms. Waechter said, the company sought to deal with the issue by disclosing limited information ...on July 24 to select investment dealers detailing subprime holdings in trusts it sponsored";
In a further measure, it began shifting unwanted subprime home loans about among its trusts to satisfy large clients such as the Caisse de depot et placement du Quebec"; and
Failed to disclose to investors that its business would be seriously hurt by DBRS changes to the way it rated it rated asset backed commercial paper".
This testimony may be directly relevant to the potential criminal fraud that we have requested that IMET investigate on behalf of the ABCP retail owners. It is my understanding, based on discussion with you, that this information will not be made available to IMET unless OSC makes a determination that they have detected criminal fraud. However it is our position that IMET, not the self regulatory bodies such as the OSC or IIROC, should be responsible for determining whether criminal fraud has been committed.

If IMET cannot access the information being obtained by the OSC, I would like to request that a representative of IMET attend the ongoing OSC hearings and record any information or potential evidence that may be relevant to the file on potential criminal fraud associated with the manufacture and sale of ABCP prior to August 13, 2007.

Please don't hesitate to call me at 1250-595-0653 should you wish to discuss this request.

Respectfully,

Mike Miles
for
Retail ABCP Owners Committee

[admin]

(advocate.....according to one witness who attended the hearing mentioned in this article by John Greenwood, Conventree is documented as having "shuffled the deck" moving bad assets out of their best client's accounts (the caisse) and putting them into less sophisticated accounts.......wish we had ability to prosecute criminally in Canada)


Wednesday, May 12, 2010

Coventree promoted ABCP to calm markets, OSC says
John Greenwood, Financial Post
Norm Betts/Bloomberg News
Coventree Inc., the largest player in Canada's collapsed ABCP market, knew about the growing fear among investors around subprime mortgages long before demand for ABCP imploded in August 2007, said a lawyer for the Ontario Securities Commission.

Jane Waechter said Coventree was fielding calls from concerned investors about exposure to dodgy U.S. home loans as early as the first quarter of 2007, but did not disclose these worries the broader market.

Instead, Ms. Waechter said, the company sought to deal with the issue by disclosing limited information to its dealers and major investors, but the move only boosted their anxiety.

The allegations come on the first day of regulatory hearings into whether Coventree properly disclosed information about its troubles to shareholders.

Ms. Waechter said the company knew that demand for some of its ABCP was disappearing a day after it sent an email on July 24 to select investment dealers detailing subprime holdings in trusts it sponsored.

In a bid to calm the market, the company hiked the interest on its paper, according to the OSC.

In a further measure, it began shifting unwanted subprime home loans about among its trusts to satisfy large clients such as the Caisse de depot et placement du Quebec, Ms. Waechter said.

Despite such moves the ABCP market continued to deteriorate, with prices falling as buyers retreated.

At the start of August 2007 -- nearly two weeks before the market froze up completely -- Coventree management deemed the situation so serious they called an emergency board meeting at which a possible press release about the problem was discussed, but never issued, the lawyer for the OSC said.

Canada's $35-billion ABCP market finally collapsed on Aug. 13, 2007, taking many noteholders and Coventree shareholders by surprise.

[admin]

Diane Urquhart was recently in town to tell us about our $30 million investment in three magic beans. Our local city of lethbridge got suckered into buying these magic investments by a combination of a fast talking commission sales geek, and a very inexperienced city treasurer who ignored our city investment policy or got suckered by the silver tongued sales geek. (either way, Lethbridge is a bit behind in best practices for professional money management)

Diane told (and showed) us how the asset backed commercial paper that we were sold was neither asset backed, nor commercial paper. It (the money) was immediately placed into "trusts" and those trusts were immediately pledged as security to Deutsche Bank of Franfurt Germany, as collateral in a crazy insurance scheme (see credit default swaps on google) where OUR money was used to insure the loan losses of Deutsche Bank. Loan losses that were likely to come about as a result of investments in sub prime mortgages.

We were the unwitting provider of insurance on their loans. Wow! That is quite a lot to swallow.

The liquidity (read guarantees) agreements that Deutsche Bank provided on this investment which allowed it to earn it's R1 rating by DBRS (no one else would touch it) turned out to be false, and probably fraudulent. Certainly the circular flow of money, (us insuring their bad debts, them guaranteeing us that we would not lose money if they demanded payment) made it look fraudulent, like a "magic money machine".

We have once again been duped by an investment industry bound and determined to earn a fee, by honest or dishonest means.

[admin]

I recommend anyone interested in fraud by "trusted criminals" such as that done in the case of ABCP listen to the podcast on PBS BILL MOYERS JOURNAL as he interviews BILL BLACK from the University of KC in Missouri

Bill is one of America's "godfathers" if you will, of study and research into "trusted criminals".

some excerpts:

In Sept 2004 the FBI warns that there is "an epidemic of mortgage fraud" building. They said that if it was allowed to continue that it would produce a crisis as least as large as the S&L debacle. No response.

Now we learn that after the attacks of sept 11, 2001, the US Justice Department transferred 500 white collar specialists from the FBI to the role of national terrorism. Bush never replaces the 500 vacant positions.

We end up with a crisis at least 100 times worse than the S&L crisis, and one that nearly bankrupted the US financial system and brought the economy to a halt.

There are now 1/5 as many FBI agents in this area, as there were working to figure out the S&L crisis.

Brooksley Borne, a US commodities regulator tried to save us from ourselves, and the wizards of wall street blocked her and put her out of business. Allen Greenspan was one of the key players who took her out of the game, and this one of the key players who ruined the US economy.

The US administration is so frightened of world collapse that they go about hiring the very people who got the USA into the mess, and they allow them to help hide from the american public that extent of the damage. Hire "yes" men to help you hide the body. Makes sense.
Government is too cozy with the bankers. They dont want to find the scope of the problem. (sorry for the note taking style, but I am typing while listening to the podcast)
Hire the very people who failed the system and let them help you hide the bodies.......Tim Geithner was one of the nations top banking regulators during the entire debacle and yet he ends up in Obama's financial admin team. He failed in every way.
Paulson was former head of goldman Sachs, and is now treasury secretary??

that is like putting the ......you know the analogy
As long as we keep the old guard that made the problems, they will not go too hard in trying to be open about the problems.
They violate the laws to hide their crimes. They simply refuse to obey the laws.

The USA sent $5 billion in subsides to UBS bank, as swiss bank at the same time that UBS was under criminal investigation for tax evasion against the US. They eventually paid $780 million in fines for such tax evasion, with the money $5 billion that the US gave them???

In clinton's administration the powers that be rescind the Glass Seagall act of the 1930's that called for a separation between banking and investment banking due to its help in causing the great depression. they thought we were smarter now. We were not.

No one tries to learn the facts, to investigate, like they do after an airplane crash, to find out what went wrong and who to avoid in future. No we do not do that with finance. We pocket the money, and bury the bodies. We fail to learn.
People in political power act in concert to hide financial crimes because it is in everyones best interest to hide and cover up malfeasance. (everyone except the taxpayer that is, and they get no voice in the matter, just the bill)
(I can see that right down to my local municipality (lethbridge) wanting to have the ABCP issue please go away by city council members)
The reagan administration's main priority during the S&L Crisis, was to cover up the losses due to the political implications. (he would know this better than anyone)

It is more than a financial crisis, it is a moral crisis.
A relatively few well heeled people were able to bring the economy to its knees for their own selfish greed.
"It is not necessary to hope in order to persevere"
Get rid of the people who have caused the problems.
(we are now promoting them instead)
The interview is titled "CORRUPTION IN AMERICAS BANKS"

watch it on Bill Moyers Journal on PBS