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Misconduct and malpractice. Investment industry "best and worst practices". Information to improve public protection. Expert witness services for industry and investors. Forensic investment analysis. • View topic - GET YOUR MONEY BACK!

GET YOUR MONEY BACK!

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Re: GET YOUR MONEY BACK!

Postby admin » Sat Mar 16, 2013 6:05 pm

After sitting hours in a courtroom, while industry paid experts hid every essential item related to the truth.......and shared every single written industry platitude ..........I was so disgusted by the display of using ill gotten money from trusting and vulnerable investors, using this money to hire experts and lawyers enough to beat those who trusted them out of justice......I had to post some "more candid" discussion.

Enclosed is an industry expert who goes into better detail about the KYC (Know your Client) form, and why it is insufficient. It is an essential item to understand for those wishing to GET THEIR MONEY BACK, as it forms part of the foundation of "fooling" the public from the first meeting. I will comment further at the end.

Screen Shot 2013-03-16 at 7.02.06 PM.png

[url]http://www.clientinsights.ca/en/libraries/top-expert/seniors-issues/ellen-bessner-managing-compliance-risks-elderly-clients
[/url]
then check out this short video:

Screen Shot 2013-03-16 at 7.04.20 PM.png


http://www.investmentexecutive.com/-/video-27348-litigation-lawyer-know-your-client-and-prove-it-with-notes
(the last minute is of value for customers who may have complaints)

Soooooo......here is the part of the foundation of "fooling" the public from the first meeting. Please try this scenario on for size: "what if the KYC form, say for an elderly customer is difficult to understand, perhaps hard to read, and possibly consists of industry terms, even jargon?"

Would it be fair to say that the person in the room calling himself or herself an "advisor" was the very person who fills out the form, or who "advises" the vulnerable client on how to best fill out the form, what "best" asset mix to have, what "best" balance between growth and income, risk etc, etc? If this sounds reasonable to you then you win, because this is exactly how most, if not all KYC forms get filled out, with "advice", directions, or instructions from the "advisor" or a member of his sales staff. OK? So far so good right?

Now for the potentially fraudulent part.........for those of you ready to fight to gain your money back. "What if the guy (or gal) who called himself (or herself) an "advisor", was never actually licensed as an "advisor"? What if they were fiddling with the rules around the use of that license category and in fact never possessed that license? (check for yourself here http://www.securities-administrators.ca/nrs/nrsearch.aspx?id=850 )

If that is possibly true, then you may have the makings of a fraudulent misrepresentation argument, false pretence, misrepresentation.........

Look at this video now, for the final element in how these sleights of hand are used by the industry to gain your money from you.

Screen Shot 2013-03-16 at 7.22.36 PM.png

http://youtu.be/qqLhMw3y9bI
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Re: GET YOUR MONEY BACK!

Postby admin » Fri Mar 15, 2013 10:43 pm

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This "summary of experiences" came to me from someone who has walked a fair distance down the path of demanding that they be compensated for abuse by so-called financial professionals. I am impressed to see actions taking place, people standing up and no longer accepting this type of abuse. Now if we could get the justice system onto a level playing field between billion dollar corporations and their victims..............



Getting Your Money Back

Lessons Learned:

It will take 2- 3 years to resolve your claim.

Focus on one strategy or task when you don’t know what to do.

There are people fighting for investor rights in Canada. Draw your inspiration and expertise from them.

Find a knowledgeable expert to review your claim before seeking expensive legal advice.

Negotiate a flat rate for each service if possible.

You will see statistics of complaint to IIROC and OBSI and know that your voice was counted.

The regulatory bodies increase attention on poor investment vehicles if investors complain about them.

OBSI mediation service will take a long time, and isn’t binding. But they will argue for you for free.

List each component of your claim as factually as possible, without inference and inflammatory language. Deliver them in a calm manner.

It will take filing a claim before anyone will take your complaint seriously, but use it as a last resort.

Know all aspects of your claim yourself. It will take hours.

The cost of being represented at small claims (25K) and a fast track trial (3 days-100K) will be equal or exceed your losses.

IIROC’s Arbitration may be faster and cheaper than going to court.

Convince the judge, not the opposition, that you are right.

Return to the facts as they give you distractors.

Focus on your demeanor. Belligerence and aggression will not impress the judge. Concentrating on your demeanor will keep your emotions in check and keep the focus on your message. It inhibits their defenses and makes you less emotional and in control.

You are not only negotiating a settlement with the firm. You are also negotiating with an insurance company. There are restrictions as to what they can offer and when. Research their approach and techniques for settlement.

Back up your damages with paper evidence and a referenced rationale for your calculations.

Rely on paper evidence, regulations, statutes and case law to back up your complaint.

Put everything in a binder and use coloured tabs for the sections to find documents quickly. You must be able to find evidence quickly. Quote directly from the documents. An organized approach with lots of evidence to lead gives you credibility and shows you are serious about pursuing justice.

They can argue how to interpret law, contracts, and suitability. They can’t argue ethics and morality. They can’t argue that you shouldn’t have trusted them without compromising their integrity.

Your complaint will be repeated in their hallways and in their offices. Some of them won’t like that you complained and will change some of their policies. You can’t measure how many people in the future will not be abused because you complained.

You can’t ever know or measure the difference your complaint will make.

You will become a stronger person and your knowledge will help others.

Lastly, getting your money back will not satisfy you. Your satisfaction will come from standing up for yourself and the way you conduct yourself, from knowing what they did was wrong and that you took them as far as you could. For everyone that is different. Take pride in any action you take against them.
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Re: GET YOUR MONEY BACK!

Postby admin » Wed Mar 13, 2013 9:22 pm

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One of the neatest tricks of the investment trade, the foundation if you will, is the fooling and misrepresenting to the public that the correspondence course commission salesperson is a trusted financial "advisor".

THEN........

Once that ruse is accomplished, customers hand over their trust and vulnerability, while reducing their level of suspicion. Viola! You may find that some of these trusted "advisors" live up to their actual license category, (which is NOT as an "advisor:)

Further helping them along(to skin you of your money), as I prepare to testify in court tomorrow, is the client objectives (income, growth, short term, long term, high risk, low risk etc).

In my experience, when trusting clients approach someone posing as a trusted professional, perhaps in an institution which may have a reputation for trust (banks?) they tend to "follow" their advice and direction.

Therefore, when filling out the client objectives, they nod their heads and agree, (why? see red below) just like you and I do when our doctor tells us what to do at times when we are really and truly lost. Every had that feeling of being lost?

"The typical risk questionnaire asks people really silly questions. The questionnaires are really stupid. Unfortunately investors think they must answer them. If you ask someone, 'How many stars do you think there are in the heavens?,' they have no idea — but they'll probably still answer the question." – Behavioural Finance guru Meir Statman Source: M. Noble, Building a better risk profile, Advisor.ca , March, 2009 [His first piece of advice to advisors is this: Realize most investors have a much lower risk tolerance than they may let on. Statman's research has determined that investor risk tolerance is, on average, extremely low

Sooooo, the end result is that they guy (sorry gals, I am old school when writing) who is fooling you into a false belief that he is a trusted "advisor", is the very same guy who is "helping " to advise you while filling in the account objectives.......and probably filling them in himself, simply asking for your signature. Is that a dual professional failure?

I think so. I am testifying in court, where a mid 90 year old gentlemen is up against an investment firm, and of course, said investment firm is hanging the elderly gent with the KYC (know your client form) that was filled out by the guy who played the false pretense game.............hmmmm There is something criminal about that. Good thing us investment folks get to "regulate" ourselves or some would be in jail:)

So, anyway, all that buildup and story to give you this court precedent which you should be using to help get your money back:

Suitability jurisprudence
(c) Suitability obligation
¶ 13
The jurisprudence on the "suitability" obligation of a registrant to determine whether an investment is appropriate for a client often includes reference to the Alberta Securities Commission (“ASC”) decision in Re Lamoureux [2001] A.S.C.D. No. 613. The decision sets out applicable principles that should guide this panel’s decision and the following lengthy extract (at Part V (B) (3) (d)) is apt:

“The obligation to ensure that recommendations are suitable or appropriate for the client rests solely with the registrant. This responsibility cannot be substituted, avoided or transferred to the client, even by obtaining from the client an acknowledgment that they are aware of the negative material factors or risks associated with the particular investment.

The obligation on a registrant to ensure that each investment recommended to a client is suitable is a particularly important protection for those clients whose investment experience and sophistication may be insufficient to enable them to fully recognize or assess the risks inherent in an investment. As noted below, disclosure to the client of the negative material factors of an investment, however important, is not necessarily relevant to a suitability determination and cannot replace a registrant’s obligation to assess suitability. Acknowledgment on the part of an investor of awareness of the material negative factors or risk does not convert an unsuitable investment into a suitable one. http://docs.iiroc.ca/DisplayDocument.as ... anguage=en

(if the guy sells you crap, GET YOUR MONEY BACK. If his firm tells you your objectives allowed high risk, point out that their "phoney" non-licensed "advisor" helped you fill out the form, so it is tainted..........and get your money back. Seriously, do not take this money manipulation game sitting down. )

You can take this one all the way to a criminal charge (privately filed) if you are convinced that you have been defrauded or victimized by false pretences. You will be the first, but what the heck. You have the right if they have done wrong.

http://youtu.be/qqLhMw3y9bI
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Re: GET YOUR MONEY BACK!

Postby admin » Wed Mar 13, 2013 4:21 pm

Here is a media release with links to a recent U of T study about the effects of commissions or conflicts of interest on which mutual funds your "advisor" advises for you........GET YOUR MONEY BACK if you have been victimized by a) a person misrepresenting the "advisor" title

and

b) a person who sells you the most expensive products for his or her own good and not yours.

see video here for further background to (a) above http://youtu.be/qqLhMw3y9bI
Screen Shot 2013-03-13 at 5.12.41 PM.png


Broker fees from mutual funds affect advice; predict worse performance, new study says.

Broker fees from mutual funds affect advice; predict worse performance, new study says.
Toronto – Brokers are supposed to recommend investments that are in the best interests of their clients.

But a study published in the February 2013 issue of the Journal of Finance has found that mutual funds offering higher broker fees attract the most investments, especially when the broker is not affiliated with the mutual fund company. Every additional dollar paid to a broker corresponds with another six dollars invested into the fund, and another fourteen dollars if the broker is an unaffiliated third party whose compensation depends exclusively on sales commissions.

It also found these payments are linked to lower investment performance, especially when the fees come from one-time sales loads rather than ongoing payments.

It is the first such study to explicitly show how broker fees affect Investments Into funds and how they subsequently perform.

The freedom mutual fund companies have to decide how to compensate brokers has “real consequences” for the brokers’ clients, the paper says. The implication, it adds, is there’s a strong case for clearly showing customers how much their broker receives from their investment recommendations.

Brokers are typically compensated in two ways. If the fund is a front-end load, the investor pays a one-time charge, taken immediately off the top of their initial investment as a predetermined percentage. The broker receives the bulk of that charge.

“For the most part, investors are completely unaware,” how much of the load goes to their broker, says Susan Christoffersen, a professor of finance at the University of Toronto’s Rotman School of Management, who co-wrote the study with Richard Evans of the University of Virginia, and the University of Pennsylvania’s David Musto. “If it’s revealed, it would be in the statement of additional information or the details of a prospectus.”

Investors may also not realize how much their brokers continue to receive out of their investments, via ongoing "trailer fees." These fees vary but in Canada make up about 40% of the management expense ratio, or MER.

The study looked at data on the performance and asset flows of U.S. mutual funds between 1993 and 2009 and related these with the fees paid to brokers disclosed in N-SAR filings to the U.S. Securities and Exchange Commission. The requirement for these filings arose directly out of regulators’ concerns of conflicts of interest and the effect of broker fees on the growth and size of mutual funds.

Read the entire study online at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1393289

For the latest thinking on business, management and economics from the Rotman School of Management, visit http://www.rotman.utoronto.ca/FacultyAn ... nking.aspx.

The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. The School is currently raising $200 million to ensure Canada has the world-class business school it deserves. For more information, visit http://www.rotman.utoronto.ca.

-30-

For more information:

Ken McGuffin
Manager, Media Relations
Rotman School of Management
University of Toronto
Voice 416.946.3818
E-mail mcguffin@rotman.utoronto.ca

http://www.rotman.utoronto.ca/Connect/MediaCentre/NewsReleases/20130128.aspx
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Re: GET YOUR MONEY BACK!

Postby admin » Mon Mar 11, 2013 9:24 am

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(c) Suitability obligation
¶ 13

The jurisprudence on the “suitability” obligation of a registrant to determine whether an investment is appropriate for a client often includes reference to the Alberta Securities Commission (“ASC”) decision in Re Lamoureux [2001] A.S.C.D. No. 613. The decision sets out applicable principles that should guide this panel’s decision and the following lengthy extract (at Part V (B) (3) (d)) is apt:

“The obligation to ensure that recommendations are suitable or appropriate for the client rests solely with the registrant. This responsibility cannot be substituted, avoided or transferred to the client, even by obtaining from the client an acknowledgment that they are aware of the negative material factors or risks associated with the particular investment.

The obligation on a registrant to ensure that each investment recommended to a client is suitable is a particularly important protection for those clients whose investment experience and sophistication may be insufficient to enable them to fully recognize or assess the risks inherent in an investment. As noted below, disclosure to the client of the negative material factors of an investment, however important, is not necessarily relevant to a suitability determination and cannot replace a registrant’s obligation to assess suitability. Acknowledgment on the part of an investor of awareness of the material negative factors or risk does not convert an unsuitable investment into a suitable one.


http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=E1746D66C38F419E9F5F7810E8AF4C13&Language=en
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Re: GET YOUR MONEY BACK!

Postby admin » Fri Mar 08, 2013 8:59 pm

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too funny!

A long list of Canadian sellers/dispensers of investment products/"advice"........all lining up to poke at industry proposals to protect investors better........a mandatory best interest standard...........which used to exist as little as ten years ago, hmmmm. At least all the training manuals in the industry said it existed.

Read up on how your very own financial "advisor" is lobbying in the background to not have to place your interests ahead of their own.........some of them take eight or nine pages of self serving bullshit to spit out how it would not be good if they had to put their clients interest first.........priceless!!

Oh, and by the way, GET YOUR MONEY BACK from people like this.
http://www.osc.gov.on.ca/en/38075.htm

then view this video and learn a bit more of the bait and switch game you are a victim of........ http://youtu.be/qqLhMw3y9bI

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Re: GET YOUR MONEY BACK!

Postby admin » Thu Feb 28, 2013 3:36 pm

If you are truly SERIOUS about getting your money back, then this post might be essential reading for you to understand better the roles/duties of your "advisor"

see this post in the "fiduciary" topic of this forum

viewtopic.php?f=1&t=187#p3532


for a very well done expose related to the topic of advisors/salespersons

it is well worth it
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Re: GET YOUR MONEY BACK!

Postby admin » Tue Feb 19, 2013 2:35 pm

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The B.C. Securities Commission has proposed legislative changes that, if implemented, will radically change the way private securities are sold in B.C. and dramatically improve investor protection.

The proposed changes would remove exemptions in the B.C. Securities Act that permit unregistered people to sell securities without filing a prospectus with the commission.

The commission says it is proposing these changes because:

Promoters and sales agents who are relying on exemptions are not complying with investor protection conditions.

• Investors would be better protected if they purchased these sorts of securities through registered brokers.

• The impact on raising capital would be negligible.

Under current rules, exemptions from registration and prospectus requirements are available to:

• Companies that sell securities to accredited investors
(investors who meet certain net worth and income thresholds).

Companies that sell securities to family, friends and business associates.

Companies that sell securities through an offering memorandum and get investors to sign a statement acknowledging the investment is risky and they could lose all their money.

Companies that sell securities to investors in minimum amounts of $150,000.

Persons that sell securities of mortgage investment entities, mainly mortgage investment corporations, commonly known as “MICs”.

Sales of these sorts of securities have been the source of ongoing regulatory problems and widespread investors losses. This column has cited dozens of such cases and repeatedly pressed for reform.

The main problem is that most of the people who sell exempt securities — because they are not registered — are not regulated, have no minimum educational standards and no obligation to ensure that the investment is suitable for the purchaser.

Also, these sorts of securities are often investments in start-up or development companies, which are inherently risky.

Adding to the risk is the fact that most of these securities do not trade on public markets and are, in fact, subject to severe resale restrictions. That means that, if the investment starts to fail, investors cannot bail out.

To sell these investments, promoters usually pay their sales agents extra high sales commissions, which encourage them to recommend the investments even though they are technically not permitted to render advice.

If anything goes wrong, investors often have little or no recourse, as the sales person is usually not registered with a dealer that is required to meet minimum insurance and capital requirements.

In many cases, the sale of exempt securities has resulted horrendous investor losses.

For example, investments in Vancouver-based Freedom Investment Club, which invested heavily in development property in Alberta, were sold by unregistered sales people by way of offering memorandum. BCSC enforcement staff have alleged that FIC’s two principal promoters defrauded investors. Investors are facing $50 million in losses.

Investors in Horizon FX Limited Partnership, which invested in foreign exchange currency contracts, similarly lost $25 million and its principal promoter was banned from the B.C. securities market.

This problem was not unique to B.C. It extended to other provinces that provided similar exemptions.

In 2009, the Canadian Securities Administrators (the umbrella organization for provincial regulators) passed a national policy that restricts the sale of exempt securities to a new category of registrant called exempt market dealers.

These brokers specialize in selling exempt products but are subject to essentially the same rules as ordinary brokers, including a requirement that they ensure the investment is suitable for the purchaser.

However, the Western provinces and territories opted out because they were concerned about the possible dampening effect on capital formation.

The B.C. commission now says that, after studying the national policy for the past three years, it has determined that:

• Revoking the exemptions would have negligible impact on raising capital.

• Private enterprises and mortgage investment entities do not rely significantly on this distribution channel for financing. Only about one per cent of the capital raised would be affected by the new rules.

• There has been significant non-compliance with the exemptions. Compliance reviews showed that 74 per cent of issuers who claimed exemptions failed to provide investors with the required risk disclosure.

Non-compliance among mortgage investment entities reached 90 per cent.

• Investors are most vulnerable to high-risk investments sold in the private placement market and would be better protected if they purchased securities from a registered dealer, who would be required to ensure the investment was suitable for the investor.

The proposed rule changes will undoubtedly be challenged by many securities promoters and their lawyers, who have long held that removal of these exemptions would add unnecessary expense and impede capital formation.

Interested parties have until Feb. 4 to submit comments to the commission.

dbaines@vancouversun.com

Read more: http://www.vancouversun.com/business/Da ... z2LNnlKKvL
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Re: GET YOUR MONEY BACK!

Postby admin » Mon Feb 18, 2013 10:06 am

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On a quiet holiday monday morning, I was being inundated with ads containing pitches for "professional" wealth management. Along with this came some new initials to prove just how professional these people were.........

The new one to me was the letters CSWP and the promoter claimed they stood for Chartered Strategic Wealth Professional. Now I have seen everything.

I won't bore you with the myriad of letters that salespeople use to misdirect the public from the fact that they are product sellers, and not professional "advisors" as many claim.......I personally attained the CFP, CIM, FCSI and Associate Portfolio Manager designation and none of it matters.

What matters is whether or not the salesperson is incentivized (and willing to fall for those incentives) to harm the interests of the customer for a greater commission. All else is window dressing in my experience. I worked 20 years in the industry, travelled the world to the conventions and sales conferences and met enough within the industry to know.

Less than 20% of those in the industry will say NO to harming their clients in my experience. That is also backed up in cash and in the hard numbers of industry sales statistics. Sad.

So whenever you run across a person claiming to be some kind of wealth management professional, with a myriad of unexplained initials behind their name, rest assured, that all these courses are usually kitchen table correspondence courses, sold by industry education outfits. Not quite in a "diploma mill" level, but some are coming awfully close.

They mostly attempt to portray one thing, which I thing important. They try to portray that the commission salesperson, who is incentivized to perhaps harm your interests if need be, for a greater commission, ..........to portray that person as some kind of wealth service professional. They portray a need to do ANYTHING in order to NOT tell the customer what they actually are, and how they are paid. This is a strong element of fraud, or misrepresentation or other abuses of the relationship.

This also is one of the key reasons why customers who refuse to be abused and misled in this way are GETTING THEIR MONEY BACK. Simply do some homework, hire a lawyer, have your lawyer call me or another industry watchdog (not a regulator paid by the industry:)

I have even seen investors who cannot afford a lawyer, study up a bit, take their "advisor" to small claims court, and obtain a settlement that way. None of this is public information due to confidentiality agreements, but I am watching it unfold for those who are aware.

see video at http://youtu.be/cIplp222zVE for a shorter learning experience on how the misrepresentation game works against you......and ironically, how these efforts to mislead investors can be used against the very people who are doing the misleading.
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Re: GET YOUR MONEY BACK!

Postby admin » Thu Feb 07, 2013 11:14 pm

373980_401553049910144_827053989_n.jpg
373980_401553049910144_827053989_n.jpg (12.16 KiB) Viewed 12072 times
Part of a long dialogue about investment "advisor" misrepresentation.

This portion of a conversation is part of what is helping abused investment customers across Canada (and some in the US as well) to argue successfully and gain their money back from investment brokers.

This information will not be newsworthy until gag orders and confidentiality agreements placed upon victims are no longer standard practice. Such gag orders allow financial institutions to abuse each and every member of the population, one at a time, and when those one-in-one-thousand individuals strong enough to fight back, get compensated, the compensation is hidden from the next 1000 victims. Thus the financial industry just gets to harm investors and get away 99.99% of the time "scott-free".

Here from my own experience is information about some of those abuses, which are being used in courtrooms recently to beat these some of these institutions. I hope there is something in here that can help others as well.

=======


In my opinion it is not "sufficient" to simply show or say that "he assured me………" (referring to the "advice" given by the "advisor")

Anyone can say that and it then brings up a chance for a little "he said/she said" debate in the judges head.

If it were me, I would add:

Your honour, I listened to the advice given to me by this person and I always believe when asking advice from a professional, I should be smart enough to take that advice, knowing that this person knows far more about the subject that I do………….Now, in hindsight, I find that there were some things this person did not tell me with enough honesty for me to place this trust in him. Namely:

1) that this person who claimed to be an advisor and a professional, was not even licensed as an advisor, contrary to the Securities Act
2) That rather than being an advisory professional as her and her firm's web site led me to believe, they provide nothing but commission selling of investment products
3) that despite me being led to believe that the advice delivered to me being in my best interests, it turns out that not only do they NO LONGER HAVE TO GIVE ADVICE THAT IS IN MY INTERESTS (suitable only) but that the commission structures and mutual fund choices offered to me show that the salesperson earns greater commissions by actually harming my interests.
4) at no time was I warned by this salesperson or this firm that they would withhold such essential information from me, and that they might have an interest in harming me financially, while promising me the opposite


I could go on another item or two, but you get the point………the point is not to just "turn over" all blame and responsibility to him and assume none for protecting yourself…………..SHOW him exactly how you were MISLED, by their promises, to make the mistake of putting 100% confidence and trust in what he told you to do…… sure it may have been your mistake in judgement...with the benefit of hindsight......but her fraud and deceit with her firm backing her up and her full intention to harm you for more commissions.


larry
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Re: GET YOUR MONEY BACK!

Postby admin » Thu Nov 29, 2012 7:51 pm

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Here is an IIROC disciplinary notice (partial for brevity) of note:

Visit IIROC to see the notice in it's entirety.
http://www.iiroc.ca/Documents/2012/3cb4 ... 054_en.pdf

INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA In the matter of:

The Dealer Member Rules of the
Investment Industry Regulatory Organization of Canada
and

Paul Christopher Darrigo

NOTICE OF HEARING
TAKE NOTICE that pursuant to Part 10 of Dealer Member Rule 20 and Section 1.9 of Schedule C.1 to Transition Rule No.1 of the Investment Industry Regulatory Organization of Canada (“IIROC”), a set date hearing will be held before a hearing panel of IIROC (“Hearing Panel”) on Wednesday, October 31, 2012 at IIROC British Columbia Room, 121 King Street West, 20th Floor, Toronto, Ontario at 10am, or as soon thereafter as the hearing can be heard.

TAKE FURTHER NOTICE that pursuant to Rule 6.2 of IIROC’s Dealer Member Rules of Practice and Procedure (“Rules of Practice and Procedure”), that the hearing shall be designated on the:

The Standard Track
The Complex Track

THE PURPOSE OF THE HEARING is to determine whether Paul Christopher Darrigo (“Darrigo” or the “Respondent”) has committed the following contraventions that are alleged by the staff of IIROC (“Staff”):
1. Between October 2009 and January 2011, Darrigo acted against his clients’ interest by effecting mutual fund transactions that triggered unnecessary deferred sales charges to his clients and undue commissions to himself, contrary to IIROC Dealer Member 1300.1(o).

end of partial notice here===========================================

It might be of interest to note that often 80% to 100% of mutual funds sold in Canada are charged the sales option called the DSC (deferred sales charge), DESPITE there being many cheaper alternatives that could arguably serve the interests of the customer better.

The unfortunate part of this is that most mutual funds are sold by a person on a commission, and therein lay the problem. Rather than meet the higher "suitability" standard, they (commission salesperson) often choose to "justify" the option that is in their best interests, rather than that of the client. (suitability requirement is like an "edible" or "drinkable" standard, ie, "the water coming out of that sewage plant is drinkable, yes" )

I would hope that the legal profession (keywords, IIROC, suit, recourse, disciplinary, fired, DSC,) will benefit from these notices, and bring improved honesty, fair play and good faith to the investment industry.
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Re: GET YOUR MONEY BACK!

Postby admin » Wed Nov 28, 2012 9:52 am

Screen Shot 2012-11-28 at 9.50.52 AM.png


Watch & Learn Terrific 10 minute BNN video What retail investors need to know about their financial advisers http://video.ca.msn.com/watch/video/what-retail-investors-need-to-know-about-%20their-financial-advisers-11-22-12-3-10-pm/jvojhfzu?from=

Thanks to Ken at http://www.canadianfundwatch.com for this post

expert
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Re: GET YOUR MONEY BACK!

Postby admin » Tue Nov 13, 2012 9:49 pm

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Guest column: Whose responsibility is suitability?

Advisors and their firms should avoid the growing trend of blaming clients if it is their own processes that are at fault

By Harold Geller, John Hollander | May 2012

At the core of the relationship between financial advisors and their clients is the assessment of the client's financial situation by the advisor - an investigation intended to match the client's financial goals with the planning and financial products recommended by the advisor. In other words, what financial choices are suitable for the client, given his or her particular situation?

It sounds straightforward. But, as most advisors know, the "know your client" process can be fraught with peril if it is not conducted and documented thoroughly. Witness the rising number of lawsuits against advisors and their firms to recover financial losses. These lawsuits almost always focus on the suitability issue, with even the most sophisticated plaintiffs alleging that they were advised to make financial decisions that were unsuitable for them, leading to catastrophic losses.

So, it's very much in the interest of advisors and their firms to ensure that they are fully aware of their obligations in this regard. Indeed, the Mutual Fund Dealers Association of Canada and the Investment Industry Regulatory Organization of Canada have established "know your client," "know your product" and "suitability" as the bedrock of the client/advisor relationship.

In our experience, problems often arise because some advisors may not have informed themselves as fully as they should have about their clients' situations (KYC), the features and details of the investments they have recommended (KYP) and how those two investigations should be applied to the client's situation (suitability).

But even if all of these steps have been taken, the advisor is still at high risk for a ruling of liability if he or she has failed to document the suitability process fully. This type of failure leaves advisors and their firms struggling to prove what is their most common defense - that the client made properly informed choices.
Indeed, it is typical for defendant advisors and firms in civil claims and disciplinary hearings to place the blame for client losses on their clients. These defendants often point to the "sophistication" of the client and the apparent understanding by the client as proof that the client was fully aware of his or her investment choices. The client's sophistication in employment, business experience or education is often mistaken for investment knowledge. So is the client's history of giving approval of recommendations.
So, who is responsible? And for what?

Clearly, the advisor and the dealer jointly bear the responsibility to recommend an appropriate match between the product and the client. Despite widespread investment industry misunderstanding to the contrary, suitability analysis is never the responsibility of the client. IIROC Rule 1300.1(q) requires that both dealer and advisor, "when recommending to a customer the purchase, sale, exchange or holding of any security, shall use due diligence to ensure that the recommendation is suitable for such customer." MFDA Rule 2.2.1 is similar. Nowhere is this obligation for ensuring suitability imposed on the client - even in the case of unsolicited orders.

This debate effectively ended in Canada when the Alberta Securities Commission declared (in Re Lamoureux, 2002) that the responsibility for ensuring suitability rests solely on advisors and dealers: "The obligation to ensure that recommendations are suitable or appropriate for the client rests solely with the registrant. This responsibility cannot be substituted, avoided or transferred to the client, even by obtaining from the client an acknowledgment that they are aware of the negative material factors or risks associated with the particular investment." This decision has been adopted extensively, including in the decision of the Ontario Securities Commission in Re Daubney, 2008, and that of IIROC in Re Gareau, 2011.

Advisors and their firms have every right to protect themselves from a liability finding by clearly establishing that they have met the suitability standard. The best way to do that is to be thorough in carrying out the suitability obligation and by fully documenting that process. It is this process, not the result, that advisors must answer for. Indeed, it can be argued that the intentional denial of a regulatory obligation, such as the suitability obligation, is itself a breach of both the regulation and the civil duty of care owed to the client.

When looking for evidence to support the conduct of the advisor, firms are well advised to avoid blaming the client, as is the current trend. Advisors and dealers promote their skills and assessment processes to their clients. When an advisor error is alleged, the advisors and dealers should do one of two things: either they should show how they complied with suitability standards or they should own up to their responsibilities. Failing that, further regulatory and judicial sanctions against the advisor and his or her firm are necessary to serve as a general deterrent against these types of failures. IE

Harold Geller and John Hollander are senior associates with Doucet McBride LLP. This commentary is not intended as legal advice.

http://www.investmentexecutive.com/-/gu ... =%2Fsearch
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Re: GET YOUR MONEY BACK!

Postby admin » Mon Oct 22, 2012 3:33 pm

FOUR STEPS TO INVESTMENT "ADVISOR" MISREPRESENTATION, MISCONDUCT, AND MALPRACTICE

(The trick of the trade that allows 150,000 commission salespersons, licensed today in the registration category of "dealing representative" (formerly salesperson license category) but misrepresenting themselves to the public as professional "advisors", (advisers?)

FIRST

The Law and rules on disclosure of license category:

From the BCSC Securities Act (link 1) comes this;

Persons who must be registered
34  A person must not
(a) trade in a security or exchange contract,
(b) act as an adviser,
(c) act as an investment fund manager, or
(d) act as an underwriter,
unless the person is registered in accordance with the regulations and in the category prescribed for the purpose of the activity.
link 1
http://www.bcsc.bc.ca/securitieslaw.aspx

BC Securities Act found on this web page

===================================================

Representations prohibited
50  (1) A person, while engaging in investor relations activities or with the intention of effecting a trade in a security, must not do any of the following:

(d) make a statement that the person knows, or ought reasonably to know, is a misrepresentation;
engage in an unfair practice.

=====================

Representation or holding out of registration
54  (1) A person must not represent that the person is registered under this Act unless
(a) the representation is true, and
(b) in making the representation, the person specifies the person's category of registration under this Act.
A person must not make a statement about something that a reasonable investor would consider important in deciding whether to enter or maintain a trading or advising relationship with the person if the statement is untrue or omits information necessary to prevent the statement from being false or misleading in the circumstances in which it is made.

===========================


57  A person must not, directly or indirectly, engage in or participate in conduct relating to securities or exchange contracts if the person knows, or reasonably should know, that the conduct
(a) results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a security or exchange contract, or
perpetrates a fraud on any person.


===========================







SECOND

Name Removed, and his firm, represented his license to the public as that of an “advisor”, which is NOT his actual license category today and was not his license category at the time. His license category then and now is ______________ as stated in the CSA National Registration Search
http://www.securities-administrators.ca/nrs/nrsearch.aspx?id=850

This is a violation of Sections 50, 54, 57, and perhaps section 34 of the Securities Act of the Province of British Columbia, found here: http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_96418_01

Using the title of “advisor” instead of _________ misrepresents the true nature of the relationship: a salesperson or dealer representative. The customer believes they are receiving investment advice in their best interest. This misrepresentation is often used to build trust with the customers and sell them investments that benefit the salesmen and firms through higher commissions and fees.

As is aptly put in a Financial Post article: "Anything else is fraud, because the seller is delivering a service different from what the consumer thinks he or she is buying. " Edward Waitzer, Financial Post · Tuesday, Feb. 15, 2011) (Mr. Waitzer is a Bay Street Lawyer and former Securities Commission chair, and this quote ( by another person) appeared in his article.

Full article found here: https://docs.google.com/document/d/12XJgKPUI4cPQkkDVNO3IUnOpEXVDifbF4SqZz3uVufY/edit?hl=en_US&pli=1%20...#bookmark=id.e2caf9e71a16
Waitzer

THIRD

The misrepresentations, and advertising and promotional promises of many investment salespersons and their respective firms, combine to allow salespersons to sell products and services which often enrich the salesperson and the firm, while not disclosing to the customer that those products and services may be chosen to best benefit the firm and the salesperson, and may in fact be chosen despite harms, risks, or alternate choices which the customer which would be better or safer for the customer.......which are not disclosed to the customer.

ie,. highest commission paying choice of “safe growth” investment

ie,. choice of unsuitable investments

perhaps other items not disclosed to this author












FOURTH



Below are selected paragraphs from a legal case cited as Markarian V CIBC World Markets, in which the judge’s comments touched on some of the various industry misrepresentations in his judgement.
(although many of the comments relate to the "misleading title in this case of VICE PRESIDENT, RETIREMENT SPECIALIST, etc, I consider the concept of misrepresentation to equally apply in principle to persons who are registered as "salesperson" or "dealing representative" who inflate their own title up to "advisor" or "adviser" for the same or similar purposes of misrepresentation)


http://www.investorvoice.ca/Cases/Investor/Markarian/Markarian_v_CIBCWorldMarketsInc.htm

List of select comments by Quebec Superior Court
District of Montreal
The Honorable Jean-Pierre Senécal, J.S.C.

(C) MISLEADING TITLES

¶ 263 The defendant attributed to Migirdic fake titles, i.e. "vice-president" and "vice-president and director", in addition to letting him use the title "specialist in retirement investments". Those titles were false representations that misled the plaintiffs, hid reality from them, disinformed them, comforted them in their confidence in Migirdic, reduced their distrust, and contributed to Migirdic's fraud. The defendant committed a fault in terms of its obligation to inform and advise, in addition to misleading the plaintiffs.


¶ 267 The problem is that clients do not know that these titles are simply marketing tools, i.e. a means to convince them that they have an excellent representative, and recognition for the volume of commissions. Clients therefore believe they have a "very special" and "eminently acknowledged" representative when the representative has the title of "vice-president" or "vice-president and director". That was what Mr. Markarian in fact believed, as he testified. Richard Papazian, another witness (and also a victim) thought the same thing. So the titles create a false feeling of trust, comfort and prestige, the role of which is not trivial in the commission of fraud.

¶ 268 The plaintiffs were the victims of these false representations by the defendant in their regard.

¶ 273 As for the title "specialist in retirement investments" or "retirement specialist", it was not a title given Migirdic by the defendant, but the defendant authorized him to use it (among others on his business cards). Once again, it was a way to instill trust in retirees and prompt them to rely on their representative in all confidence. In actuality, the title meant nothing more than that Migirdic had many retired clients, which did not make him more competent in that area and also did not make him a better representative for those people (much to the contrary, Migirdic exploited their greater vulnerability).

ADDENDUM OF RELATED MATERIAL

Fair dealing with clients
14 (1)  A registrant must deal fairly, honestly and in good faith with the clients of the registrant.
(2)  A registered
(a) dealing representative, or
(b) advising representative,
of a dealer or adviser must deal fairly, honestly and in good faith with the clients of the dealer or adviser
.
[am. B.C. Reg. 226/2009, Sch. C, s. 2.]

This section (above) is from the BC Securities Commission Securities Act
SECURITIES RULES
[includes amendments up to B.C. Reg. 104/2010, September 28, 2010]section found on their web site.

http://www.bcsc.bc.ca/securitieslaw.aspx

“In the opinion of myself, Larry Elford, the defendant in this case, was legally licensed in the category that was used pre-2009, namely the category of “salesperson”.
Although this license and registration category has since (Sept 2009) been altered from “salesperson” to the new name of “dealing representative”, it seems apparent that the defendant has been claiming to be registered as an “advising representative” by referring to himself as an “advisor”.


These violations constitute what can roughly be termed a “bait and switch”, whereby an investment customer is lured into action with the promise of a “trusted, licensed and qualified” investment professional.

Then the switch comes as the customer is unwittingly subjected to the services of a commission salesperson, who may not even carry a duty to place the interests of the customer first and foremost. (see image below of suitability and priority of customer interests from FIDUCIARY ROUNDTABLE 2011, Industry stakeholders conference) (more data available on this topic)

Screen%20shot%202011-08-11%20at%2012.10.02%20PM.png

click to enlarge image

From the BCSC web site and document http://www.bcsc.bc.ca/uploadedFiles/securitieslaw/policy3/NI%2031-103%20Consolidated%20Version%20Feb%2028%202012.pdf

Comes this document title: National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant Obligations


Which contains this section on the requirements to call oneself an "advisor" or "advising representative"
3.11 Portfolio manager – advising representative
An advising representative of a portfolio manager must not act as an adviser on behalf of the portfolio manager unless any of the following apply:
(a) the individual has earned a CFA Charter and has gained 12 months of relevant investment management experience in the 36-month period before applying for registration;
(b) the individual has received the Canadian Investment Manager designation and has gained 48 months of relevant investment management experience, 12 months of which was gained in the 36-month period before applying for registration.

Further, this communication from the BCSC to myself after making an enquiry to them on the topic of misrepresentation:


Dear Mr Elford,

Thank you for your message.

With regards to your questions and comments, you are quite right in that the term "advisor" on its own and used loosely, would be inappropriate for a dealing representative to use without having the educational requirements and experience to be registered as an advising representative.

If you are certain that an individual is holding themselves out inappropriately, please feel free to contact the appropriate securities commission or self regulatory body (Mutual fund Dealers Association or Investment Industry Regulatory Organization of Canada ) through our related links available on our website at: http://www.bcsc.bc.ca our email is inquiries@bcsc.bc.ca We also have a helpful link on our website called Invest-right , which members of the public can use to assist themselves with their investing.

Thank you,


Kent Waterfield
Senior Registration Administrator
Registration & Compliance Branch
Capital Markets Regulation

British Columbia Securities Commission

=================================================

“Advisor ” Titles confuse and mislead : In most cases, a broker-dealer rep is a sales rep, not an
adviser. The broker-dealer rep does not get paid to give advice and is not licensed to provide
advice, and hence is not an “adviser.” Such reps get paid when they sell a product; thus they are
salespeople. It seems clear that when broker-dealers refer to their salespeople as “financial
advisers” or “financial counselors” or “financial consultants,” their intent is to mislead the public
as to the true purpose of their reps.
No wonder the public is confused. It seems pretty clear that
the public would be less confused if the rep's title were “financial services sales representative”
or “Vice president of sales.” With this same approach, other industries could use titles such as
“used-car adviser,” “carpet counselor” or “door-to-door consultant.” These are of course all
salespeople, and the public recognizes them as such. Most people see warning lights in their
minds when they deal with salespeople. It is an instinctive self-defense mechanism to be
sceptical of what the salesperson is saying, to shop around with other vendors and to get second
opinions. However, when salespeople are called - and viewed as - “advisers,” the public can be
led into thinking they are being told what is best for them. In fact, in a commission-driven
transaction (with only the suitability rues in play), the client often comes out on the short end of
the “conflict- of- interest” stick. - contributed from http://www.canadianfundwatch.com

http://www.canadianfundwatch.com/files/news-201204.pdf
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Re: GET YOUR MONEY BACK!

Postby admin » Fri Oct 19, 2012 9:31 am

Things that make you go hmmmmm.....

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Have you ever wondered how the investment industry in Canada is able to get away with an XL-Foods type of “oops”, seemingly over and over without repercussion?

Here are a few facts about investment protections that make you wonder.

1. All regulators in the investment industry, self regulators and government regulators, are paid directly from the investment industry itself, and not from the government.

While some meat inspectors may earn just over $100,000, investment regulators top out at just over $700,000. (Ontario and Alberta Securities Commissions)

2. When the food industry runs into a problem, the product is recalled, at a loss to the processor, and disposed of.

When the investment industry runs into a problem, they pass the “problem” into the accounts of trusting and vulnerable Canadians.

(They do this with the assist of 150,000 commission salespersons, who are licensed as “dealing representatives” and posing to the public as being persons who are licensed in the category of “advisor”.)

3. When the food industry has product that they know does not meet our laws or standards, they do not apply for “exemption” to the law in order to sell it to the public.

The investment industry in Canada has received thousands of exemptions to the Securities Act in each province, to allow toxic, faulty or self serving investment products or advice into the financial food chain.

4. The food industry has caused hundreds of cases of illness and several deaths.

The investment industry has caused hundred of billions in damages (ABCP $35 billion, exempt market products $1.5 billion, to name just TWO) and resulted in the suicide of several Canadian victims. (more victim suicides than actual prosecutions) http://youtu.be/aNh5laKO22o

5. When the food industry finds tainted or spoiled product, it is usually recalled destroyed.

When the investment industry finds tainted or spoiled product, it is usually placed into the investment accounts of unsuspecting customers, those most vulnerable, the elderly, and various government agencies.

6. If food tampering or fraud were discovered and the police called, they would likely investigate and bring the criminal code of Canada into play.

If investment tampering or fraud is discovered and the police called, they will likely never open up the criminal code of Canada, and will instead refer cases directly to persons paid by the investment industry. (investment industry “self regulates”)

7. People paid by the food inspection and regulatory agency do not sit on joint management committees of our largest and most respected police agencies.

Industry paid self regulators and provincial counterparts sit on joint management committees of the RCMP IMET, “helping” them on Canada’s largest economic crimes investigations. (even those where the investment regulator has "participated" in the abuse of the public by granted exemption.... see http://www.investoradvocates.ca/viewtopic.php?f=1&t=79

8. When food inspectors are found to have tainted product to reach consumers, there is usually considerable public and media outcry, possibly even inquiry, until a full explanation is found and solved.

When the securities commissions in Canada are granting permission to violate the laws to those selling otherwise illegal products or advice harmful to the public, the following is reason used most often, in support of their decision: “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.” (eg. http://www.msc.gov.mb.ca/legal_docs/ord ... oia_2.html )

Sources, data, documents, and links to public record sources to support each of the comments herein about the investment industry found here:
[url]
http://www.youtube.com/user/investoradv ... ature=mhee[/url] (speaking or video productions by a recovering Canadian broker
[url]
http://www.investoradvocates.ca [/url] web forum for professionals from the investment industry who speak truth to the financial abuses rampant within the industry.

Tainted meat in your body, tainted advice and investment products shortchanging your financial health.............

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