ABCP's of stealing $32 Billion. Case study 2 for inquiry

[admin]

Monday, March 31, 2008

Presented by

Faces of the ABCP crisis
As Purdy Crawford hits the road to sell his ABCP workout, hard-hit individual investors just want their money back

John Greenwood And Grant Surridge, Financial Post
Steve Bosch/Canwest News Service
Nearly eight months after $35-billion of asset-backed commercial paper seized up, the faces of the losses are becoming clear.

Individual noteholders from across the country are now coming out of the woodwork, and networking on Facebook, to tell their stories of devastating losses from risky investments that few people really understand.

There are an estimated 1,600 of these retail investors, according to insiders. They are frustrated and angry and in no mood to make concessions. Yet the future of a crucial restructuring of the asset-backed commercial paper market rests in their hands.

Having frozen the market for these notes back in August to plot a rescue plan, the banks and financial institutions involved announced their solution earlier this month: New notes would be created and the entire restructuring placed in bankruptcy protection. This would allow the group to move through its final, delicate stages without external distractions such as lawsuits.

The final vote for the restructuring plan will take place on April 25. It must be approved by a majority of noteholders. Since there are only around 200 corporate and institutional investors, the fate of the biggest workout in Canadian corporate history may now rest in the hands of the little guy.

Much hangs in the balance. A "no," vote means the restructuring fails and the trusts that issued the stalled notes go into receivership, possibly triggering a financial meltdown, analysts warn.

If the restructuring is approved, the markets would carry on and the notes unfrozen. But according to a recent RBC Capital Markets research report, some of the notes may have lost 80% of their value.

And there's a trade-off: A clause in the deal would provide legal protection to all the banks, investment dealers and others who created and sold the ABCP. If investors agree to the restructuring, they must also promise not to sue to get their money back.

Beginning today in Toronto, Purdy Crawford, the Bay Street lawyer who heads up the investors committee, will be travelling to major Canadian cities to persuade investors to sign on to the plan. He faces an uphill battle.

Financial Post spoke to six retail investors to get their stories.

'Little guys speak out'

The committee that has put together a plan to restructure the market for the asset-backed commercial paper in Canada, frozen since August, today begins hawking its merits to those who will vote on it on April 25. What the committee, headed by Purdy Crawford, didn't reckon on are the 1,600 or so small retail investors who are faced with potentially losing their life savings. The Financial Post's John Greenwood and Grant Surridge look at six of their stories.

---

Ron Lawley will never look at investment dealers the same way again. A retired computer technician, Mr. Lawley lives in Nanaimo, British Columbia, where until recently he and his wife enjoyed a modest but satisfying lifestyle. Then came last summer's credit crunch, and for the first time Mr. Lawley learned the term "asset-backed commercial paper." The education, he says, came from his broker, who informed him last September that he owned about $210,000 of the stuff, but not to worry, that it was only a "glitch" in the market that was making his money --about one-quarter of his savings --inaccessible.

"This is absolutely ridiculous," he said in an interview. "I'm 72, I've worked all my life, I've never had a day without a job and this is how I get treated. This stuff should never have been sold to people like me."

He is especially upset about the way he came to own an asset he still doesn't fully understand. Having told his broker to put his money in government bonds, he was surprised to discover unfamiliar names of these notes on his statement. Last week, someone sent him a copy of the nearly 400-page document that outlines how the ABCP restructuring will work. "I'm not even going to read it." he says. "I just want my money back." John Greenwood

---

It was August when Brian Iler first read about ABCP while he was on vacation. While technical, the stories said people lost money. The Toronto-based lawyer felt sorry for them.

When he got home there was a letter from his broker. It was to say his account held about $229,000 of ABCP. "I was totally shocked," recalls Mr. Iler, who says he told his broker he wanted secure investments.

After asking questions, he eventually got hold of a DBRS report that "clearly describes a very risky investment."

For his part, the broker insisted he had followed instructions and that all would be fine in the end. But, at 62, Mr. Iler figures he may end up having to delay retirement .

What bothers Mr. Iler most, however, is the way retail investors have been treated. He reckons the little guys only ended up with the power in this restructuring because the banks were so focused on finding a solution that worked for them that they failed to see what was given away.

"When the penny dropped, there must have been someone with a lot of egg on his face," Mr. Isler says. J.G.

---

Yulan Wong was successful as a Vancouver real estate agent before she retired, but now she counts her pennies when she goes to the supermarket.

About two years ago, her broker started putting Ms. Wong's savings into ABCP, saying it was for "diversification."

"She said it was guaranteed by the Royal Bank of Scotland and Barclays Bank," Ms. Wong says.

Ms. Wong, who is 62, says she has about $300,000 tied up in illiquid ABCP. Just over half the money in Ms. Wong's account was savings she planned to live on. The other half belongs to her niece. When ger parents died several years ago, Ms. Wong became her guardian. "I told her I don't have the money, I can't give it back to you," she says. "It's caused a lot of stress in the family."

"I've worked very hard all my life, I've never complained. But this is too much."

Unable to persuade her broker to buy back the investment. Ms. Wong is pinning her hopes on a bid by small note-holders to try to force a better deal from those trying to restructure the market. J.G.

---

"You can't get your money, man. It's frozen." That's what Reid Moseley's friend and broker told him last August when he went to withdraw the cash he had temporarily parked in ABCP while waiting to close the purchase of his dream home in the Calgary suburbs.

The 61-year-old retired teacher and father of four says his broker said there was no risk, that he would get a better return than with Treasury Bills. He figured it was a no-brainer -- better than having his $50,000 nest egg sitting in the bank not earning interest.

Now he's had to take out a $30,000 line of credit to pay the bridge-loan tied to his new home. It's sucking up capital from his hobby business selling antiques, and he doesn't know how much he will get back.

He doesn't blame his broker for the fiasco, but is furious the major banks will not come to the rescue of small investors who ended up with money in investments those banks were supposed to back in a crisis.

Mr. Moseley feels cut off from a restructuring process conducted behind closed doors by lawyers and bankers who don't know what it is like to be in his situation. "That $50,000 represents my life and my wife's life work in terms of what we were able to put aside," says Mr. Moseley. Grant Surridge

---

Nick Kovics was specific in the instructions he gave his broker about the $100,000 he decided to invest. "This is money I cannot lose," he says. "This is my safety net." The 34-year-old chemical engineer and part-time MBA student had always managed his own investments, but on the recommendation of friends, he went with a broker who told him that putting the money in asset-backed commercial paper was safe.

He first heard about the frozen ABCP by reading the newspaper. Even when his broker confirmed the situation he was not initially worried. But he got anxious as as each extension and deadline passed. "It's got me nervous now." He's wondering when and if he'll get his money back.

Unlike other investors who are close to retirement, Mr. Kovics can afford to wait out a lengthy lawsuit. He'll vote against the proposal unless all his money is returned.

But what's most galling for Mr. Kovics is that he invested the money at the end of July, two weeks before the market for the paper froze up.

He says that as a young investor, he has always been willing to take on risk and has managed his portfolio through bear markets before. The first time he chose to trust some money with a professional, he is suffering what may be his biggest loss ever. "The irony is unbelievable." G.S.

---

Mike and Wynne Miles are anguishing over how to vote on the ABCP restructuring plan. In their late 50s, the couple has a significant portion of their savings tied up in the paper. Since both are self-employed, they have no pension, and they have two kids they're putting through university. They say their broker didn't even tell them he was putting their retirement money into ABCP.

Now they worry that if they vote for the deal, they'll forfeit their right to sue and be forced to wait years to get their money back, with no interest earned in the meantime.

"We can't afford to wait that long," Ms. Miles says softly. The couple are also terrified of what voting "no" might mean: That the deal collapses and they lose everything.

The couple plans to fly to Vancouver this Wednesday to hear Mr. Crawford pitch the restructuring plan to investors, although they are worried they won't know what to ask.

Mr. Miles also questions the money being spent trying to fix the ABCP mess. "All sorts of people are being paid to fix this thing, and it's the same people who broke it in the first place." G.S.

[admin]

Subject: Request for criminal investigation into the manufacture, credit rating and sale of Non Bank Asset Backed Commercial Paper (ABCP)
Date: Thu, 24 Dec 2009 10:33:48 -0800
From: Mike Miles <mikemiles@shaw.ca>
Reply-To: mikemiles@shaw.ca
Organization: M. Miles and Associates Ltd.
To: Dean Buzza <dean.buzza@rcmp-grc.gc.ca>


Superintendent Buzza,

I am enclosing a request for a criminal investigation into the manufacture, credit rating and sale of Canadian Non Bank Asset Backed Commercial Paper (ABCP).

I am aware that IMET has previously declined similar requests. However the recent rulings by the Ontario Security Commission and the Investment Industry Regulatory Organization of Canada indicate that there are sufficient grounds to warrant such an investigation (see attachments).

Our letter is directed to your office due to the importance of this issue and the diverse geographical location of the complainants.

I was requested to appear before the House of Commons Justice and Human Rights Committee on December 9, 2009 and discussed ABCP related issues pertaining to proposed amendments to the Criminal Code contained in Bill C-52. I will be forwarding a copy of this email to the Committee to ensure they are informed of recent developments. Our request will also be released to the media due to the widespread interest in this matter.

Thank you kindly for your assistance.

Respectfully,

Mike Miles

[admin]

http://www.osc.gov.on.ca/documents/en/P ... entree.pdf
According to independent financial analyst Diane Urquhart, the provincial securities
commissions, including the OSC, exempted the Non Bank ABCP from being sold by a registered
dealer and by prospectus, if it has an approved credit rating from an approved credit rating
organization as defined in National Instrument 45-106. The provincial securities commissions
were enablers of DBRS being the only credit rating organization providing top credit ratings for
the Non Bank ABCP. The provincial securities commissions could have forced the Non- Bank
ABCP sponsors to prepare prospectuses for their commercial paper when Standard & Poor's
reported that the Non -Bank ABCP was below investment grade in 2002. Instead, the provincial
securities commissions granted Mutual Reliance Review System for Exemptive Relief decisions
that allowed the dealers to proceed with distribution of the money market paper on just the one credit
rating from DBRS passing the minimum credit rating standard in the regulations.

[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

[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]

(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]

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]

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. “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 people police themselves any longer on the honor system.