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GET YOUR MONEY BACK! 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 - Self Regulation is "decriminalization", lets count the ways

Self Regulation is "decriminalization", lets count the ways

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Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Sep 16, 2011 10:55 pm

VIOLATION # 41 of the public interest was the smooth move by the Canadian Securities Administrators (gurus from 13 securities commissions) to ERASE the word "salesperson" from the securities acts in 13 provinces and territories and replace it with the words "dealing representatives". This was done effective Sept 29, 2009 "for the public good".

Notwithstanding the fact that nearly all 150,000 licensed "salespersons" in Canada at the time were misrepresenting their title to the public as some kind of "advisor", (we have already dealt with misrepresentation), the CSA felt it might be necessary to:

a) change the names a bit before lawyers start suing for negligent misrepresentation

b) mix it up to further confuse consumers what service they are getting

c) pick any possible explanation that you can think of, use your imagination, but remember, it must be in the public interest

d) finally clear up any misunderstanding about the relationship with the new term "dealing representative"

The CSA (in my opinion) is violating the public trust with legal name games. If not in the letter of the law, they are certainly violating it in spirit. Shame on them for doing so, and how soon will they lose (sell out?) any moral authority they have.
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Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Sep 16, 2011 10:44 pm

Further info regarding a previous violation. FIDUCIARY

One of the "checklist" items to determine if a relationship was that of a fiduciary was the use of professional standards or codes of conduct.
ConductPracticesHndbk.jpg

The following page 14 is from the Canadian Securities Institute Conduct and Practices Handbook, 2000. It is the study text which must be learned to pass the Conduct exam prior to being registered to sell investments in Canada (at the bank owned brokerage I was with)
Book 1_Page_14.jpg
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Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Sep 16, 2011 10:37 pm

VIOLATION #40

The art of violating the "spirit" of the rules, by doing something illegal, but using a legal "exemption" to make it allowed under the "letter" of the rules.

Book 1_Page_25.jpg
click to enlarge

"We are so far above the law in the financial industry that we simply do not give a $#%^$%^ what we do anymore. Nobody is watching us and nobody can touch us."
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Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Sep 16, 2011 10:28 pm

VIOLATION # 39 further to a posting made sept 3, 2011 at 9:05 on the many misrepresentations made by the various INVESTMENT DEALERS ASSOCIATIONS or INVESTMENT DEALERS SELF REGULATORY AGENCIES (IIROC etc)

Book 1_Page_36.jpg
click to enlarge

(From Canadian Securities Institute Conduct and Practices Text dated 2000)

The interesting bit in pink (above image) is that the self regulators are empowered to enforce their own rules and bylaws. And in yellow below.
Book 2_Page_189.jpg
click to enlarge (source CSI Branch Manager training course text, 2000)

Funny then how the "industry sponsored" men like Joe Oliver, when paid a substantial six figure salary to say what they are told to say, come up with misinformation like the following:
Screen shot 2011-04-29 at 7.41.03 PM.png
click to enlarge

What Joe is trying to get a parliamentary committee to buy into here, is the line of bull that industry Self regulators would like people to believe, that they are "deputized" by each securities commission to "do the job". They are in no way deputized and have no statutory authority. Yet that does not stop them from lying and stating otherwise, if they are paid enough money to lie that is. What kind of person would lie to a Senate Standing Committee? Self regulation is decriminalization.
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Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Sep 16, 2011 10:07 pm

Violation #38 is the violation of the "solely incidental" term, which is used to allow the legal exemption (previous two posts) whereby commission sellers of bank, trust, and insurance companies in Canada are then allowed to skirt the laws on "advisor" registration and to call themselves "advisor", here are some clarifying definitions which, although they come from the USA, should be read as they are somewhat understandable, and quite readable:
(I guess what I am saying is that every sales geek out there is running around telling and selling his or her services as an "advisor" doing financial plans and other such things, and making it very very clear that the "advice" they purport to give is a MAJOR part of their "schtick" and not something solely incidental at all)

http://www.investopedia.com/exam-guide/ ... z1YBNnPDij
1.3 - The Uniform Securities Act (USA) - Definitions Part 2

INVESTMENT ADVISER - "Investment adviser" means a person that, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. The term includes a financial planner or other person that, as an integral component of other financially related services, provides investment advice to others for compensation as part of a business or that holds itself out as providing investment advice to others for compensation. The term does not include:
An investment adviser representative;
A lawyer, accountant, engineer, or teacher whose performance of investment advice is solely incidental to the practice of the person's profession;
A broker-dealer or its agents whose performance of investment advice is solely incidental to the conduct of business as a broker-dealer and that does not receive special compensation for the investment advice; (this used to be known as a "stockbroker")
A publisher of a bona fide newspaper, news magazine, or business or financial publication of general and regular circulation;
A federal covered investment adviser;
A bank or savings institution

First, an "investment adviser" (IA), as the Law defines it, is generally a company or a firm that is "in the business of" providing investment advice for a fee. The "investment adviser representative" is an individual who works for an investment adviser. The USA permits a sole proprietor to register as an investment adviser, but for exam purposes, think of an IA as a firm that hires others.

Notice that as long as any investment advice provided by Teachers, Engineers, Accountants and Lawyers(teal) is "solely incidental to the practice of the person's profession" that person is not defined as an investment adviser.

Broker-dealers are not defined as investment advisers as long as their advice is "solely incidental to the conduct of business as a broker-dealer and that does not receive special compensation for the investment advice." Here's another clue that a person is not an investment adviser: not receiving special compensation for the investment advice. The test sometimes uses the word, "remuneration," which simply means money paid for work or a service.

But what about broker-dealers that manage client accounts, take assets under management and charge "wrap fees"? Those B/Ds must be registered as both B/Ds and investment advisers.

Notice that banks are, again, not considered investment advisers. Subsidiaries of banks, however, may very frequently be registered as investment advisers.
Look Out!

Banks and similar institutions are exempt from many of the requirements of the USA because they are so heavily regulated by other entities. The USA, in recognition of this fact, has exempted banks and other similar institutions from yet another layer of regulation.


Read more: http://www.investopedia.com/exam-guide/ ... z1YBO8PEDQ

The trick is to allow "salespeople" to give themselves permission to utilize the title "advisor" on their business cards, again so they can gain more (1) of the customer's trust and (2) gain more commissions from the customer.

I apologize for beating the horse to death, but I feel it is a fundamental (and fraudulent) element in financial damage and violence done to millions and millions of Canadians, probably ten times that many in the USA. All as a result of "self regulation being decriminalization".
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Re: Self Regulation is "decriminalization", lets count the w

Postby admin » Fri Sep 16, 2011 9:42 pm

I am going to count this as VIOLATION #37, because it is a "trick shot" combination of two legal tricks, done to Canadians to scam them into (1) greater trust in their financial product salesman and (2) less money for themselves and more money for their financial product salesman.

As the previous post of Sept 12 touches on, there is something called "exemptive relief" in the securities acts, allowing the securities commissioners (paid by the financial industry) to "exempt" the law provided it is not prejudicial to the public interest.

Well, it appears that the public interest thing was an irritant, and it got forgotten some time ago, probably when securities commission salaries crossed over quadruple or quintuple what the top paid man at the SEC gets in the USA. But bear with me and I promise I will make a billion dollar point................

So if our friends at the securities commission will take the exemption process, and abuse it just a bit, we can use it to misrepresent commission salespeople to the public as professional advisors, giving them a false sense of security to accomplish more (1) trust by them, and (2) more money for us.............
Book 1_Page_47.jpg
click to enlarge

So the above page (from the Canadian Securities Institute Conduct and Practices text, summer 2000) describes how those people who sell for banks, trusts and insurance companies, can utilize this legal exemption from registration as an "advisor", to be able to call themselves "advisor" without having to meet the qualifications, nor even the duty of care implied by the term "advisor". What a neat trick.

As you can see further down on the page, this exemption only applies, IF the "service as an advisor is solely incidental to the person's principle business or occupation". Solely incidental means, well go look it up yourself, and after an hour if you have not come to the conclusion that it can mean anything a lawyer wants it to mean, go read some more actual cases, Canadian and US. It can be confusing and it is used in a confusing manner to often gain the outcome the lawyers want. I will post on the next post an interesting commentary on it from the USA, for your benefit.

This next image speaks again to the earlier violation of letting "salespeople" trick or mislead consumers into thinking they are to be trusted as "advisors".
Book 1_Page_43.jpg
click to enlarge

So the combination "trick shot" that does financial violence to unsuspecting consumers is the misuse of the term "advisor" to fool customers into thinking they are NOT going to see a "salesperson". Somewhat akin to inviting people to a meeting of a large corporation without letting them know it is an Amway recruitment gathering. Then, when you combine this sleight of hand, with a legal exemption, allowing (or illegally, marginally, or confusedly allowing?) certain employees to call themselves "advisor" without being registered as such.......Well, it goes like this: We get to do whatever the *&^%$%$ we want to do because we make the rules and we enforce them.....
Self regulation is decriminalization.
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 8:55 pm

OK, for the truly coolest trick at maximizing the "milking" of the Canadian consumer, beyond the ethical, (aside from getting your pals exempted from the criminal code (previous post re Bill C21, fraud, minimum sentences))

Get an application in to your local securities commission, to gain permission to violate the provincial Securities Act. They will stamp it across the country (thanks passport system of co-operation) and presto! You will have full legal permission to violate any law that you need in order to sell, make, or advise on investments and make more money. How much can you make when you can ignore (opps, exempt yourself from) the law? Your imagination is you only limit.

That makes something illegal, legal, or allowed, or OK, doesn't it? "Yup. You have my blessing, son. Go forth and do more financial violence than a few million blue collar criminals. Financial rape and pillage of Canadians is now your God given right. Go forth and prosper my son. Send me a cheque for the exemption and all will be well." Yours Truly, your provincial regulator, "protecting the public interest"

See viewtopic.php?f=1&t=143 " break the law and win. Apply for exemptive relief." topic elsewhere on this forum

I won't count this as violation #36 of the public, since an exemptive relief application is in place to violate the spirit of the laws involved...............

Screen shot 2011-04-29 at 8.40.43 PM.png
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 8:44 pm

Here is the coolest trick (almost) (see exemptions for coolest) that I have ever seen in the land of trusted mega criminals.

When the new crime bill, called MINIMUM SENTENCES FOR WHITE COLLAR CRIMINALS was being discussed in Ottawa I noticed the following. I think in the old parliament (pre-prouge) it was Bill C52 and it was Liberal MP Marlene Jennings who pointed out to a Standing committee that someone had carefully "altered" the criminal code of Canada (as it appears or applies within this one bill) to exclude investment bankers.

See the original copy of the Criminal Code of Canada below, showing section 380, fraud:

R.S., c. C-34, s. 337.
Fraud

Fraud

380. (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,
(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
(b) is guilty
(i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
(ii) of an offence punishable on summary conviction,
where the value of the subject-matter of the offence does not exceed five thousand dollars.

Affecting public market

(2) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, with intent to defraud, affects the public market price of stocks, shares, merchandise or anything that is offered for sale to the public is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.

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

OK, so far so good. but here is the magic part. The portion in red above, is from section 380, subsection 2, and it is a key element of fraud that specifically relates to public markets fraud. That means the stocks and bonds or mutual funds you might buy and that Bay Street might sell. The magic part is that Bay Street friends were able to CUT, (delete, remove, erase, eradicate) section 380, subsection 2, out of the bill on minimum sentences for white collar crime.

Despite it being pointed out by Marlene Jennings of Quebec, (and some really fast talking by a junior Ottawa legal gal, who made no sense while she peddled her answer), and despite it going into a totally new parliament, called bill C21 I believe in the new parliament. The minimum sentences for white collar fraud DO NOT APPLY to the good folks on Bay Street. You can suggest anything you wish to suggest, from how honest they are, to "the dog ate that part". I am not a believer. Nor do I believe that folks from Bay Street have a hand in writing fraud laws in Canada..........BUT.......I do know that some Bay Street lawyers have a hand in writing or advising on the writing of certain legislation.............do you think? Follow THAT money. The trail would be pretty wide.

I will not put this down as a violation, since technically the crime of fraud has been eliminated, for the purposes of this bill at least. Maybe next year they will get subsection 2 right out of the criminal code. Who knows, maybe it is already gone. I just know they managed to get it out of two parliaments.

http://www.parl.gc.ca/About/Parliament/ ... ibrary_prb

Screen shot 2011-09-12 at 9.44.25 PM.png


bill c52 in previous parliament http://www.parl.gc.ca/HousePublications ... 192&file=4

bill C21 passed in latest parliament http://www.parl.gc.ca/HousePublications ... 626&file=4

(corruption reaching right into parliament and giving investment bankers a free ride around this law)
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 8:30 pm

Fraud:
Deceitful conduct designed to manipulate another person to give something of value by:

lying,
by repeating something that is or ought to have been known by the fraudulent party as false or suspect or
by concealing a fact from the other party which may have saved that party from being cheated. (like claiming to be a professional investment "advisor" without having the license, the education, the duty to advise with care........and also while having a commission sales mandate)

Good old fashioned lying is violation # 35 of the spirit of the law. Found daily in investment selling. Accepted with moral blindness by every regulatory body.

from http://www.canadianlawsite.ca/fraud.htm#b
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 8:23 pm

Competition Act - An Act to provide for the general regulation of trade and commerce.
CHAPTER C-

False or misleading representations
52. (1) No person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or ... any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.(5) ... liable to a fine in the discretion of the court or to imprisonment for a term not exceeding five years or to both; or (b) on summary conviction, to a fine not exceeding $200,000 or to imprisonment for a term not exceeding one year, or to both.

Again, see "advisor fraud" post in this forum, and also the post about specific complaint to the competition bureau. They (competition lawyers) have indicated that they have no time for smaller cases. I am suggesting that this violation is at the heart of billions and billions annually harmed or lost to Canadians, and gained to investment firms.............The competition bureau did find time to investigate NIVEA My Silhouette skin cream lately, so we can see where they are prioritizing cases by size of economic harm to the country.
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 8:14 pm

PART VII.1 DECEPTIVE MARKETING PRACTICES
Misrepresentations to public
74.01 (1) A person ... who, for the purpose of promoting, ... the supply or use of a product or ... any business interest, by any means whatever, (a) makes a representation to the public that is false or misleading in a material respect.

Representation as to reasonable test and publication of testimonials
74.02 A person ... who, for the purpose of promoting ... any product... or any business interest, makes a representation ... that a test has been made as to the performance, efficacy or length of life of a product by any person, or publishes a testimonial with respect to a product.

Bait and switch selling
(2) A person ... who advertises at a bargain price a product that the person does not supply in reasonable quantities having regard to the nature of the market in which the person carries on business, the nature and size of the person's business and the nature of the advertisement.

A couple more #34 and #35 common (daily occurring) practices by the investment industry which are illegal under the Canadian criminal code. For examples re-read this forum and the forum titled "Advisor Fraud" on this same website.
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 8:11 pm

Fraud.

380. (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding ten years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or

(advocate comments.........go back to the beginning of this flogg topic and re-read the previous 32 types of violations of industry rules and codes, and please tell me there is not rampant fraud at the core of standard investment practices.

Violation #33. Criminal code violation. A combination of investment, regulatory and legal malpractice keeps this one pretty tightly under wraps. Follow the money.
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 8:05 pm

Forgery......happens all the time. Damages clients. Not referred to police for prosecution unless it involved a "little guy" who was not a favoured part of the game. Remember, we police ourselves. (The Investment Dealers self regulating organization is even on record as saying "not every forgery is a forgery", to help themselves out of a bind. Go figure. Hundreds of investment industry examples at http://www.investorvoice.ca or http://www.google.com/search?ie=UTF-8&o ... ORVOICE.CA

Forgery and Offences Resembling Forgery
366. (1) Every one commits forgery who makes a false document, knowing it to be false, with intent

(a) that it should in any way be used or acted on as genuine, to the prejudice of any one whether within Canada or not; or

(b) that a person should be induced, by the belief that it is genuine, to do or to refrain from doing anything, whether within Canada or not.

Making false document

(2) Making a false document includes

(a) altering a genuine document in any material part;

(b) making a material addition to a genuine document or adding to it a false date, attestation, seal or other thing that is material; or

(c) making a material alteration in a genuine document by erasure, obliteration, removal or in any other way.

When forgery complete

(3) Forgery is complete as soon as a document is made with the knowledge and intent referred to in subsection (1), notwithstanding that the person who makes it does not intend that any particular person should use or act on it as genuine or be induced, by the belief that it is genuine, to do or refrain from doing anything.



Forgery complete though document incomplete

(4) Forgery is complete notwithstanding that the false document is incomplete or does not purport to be a document that is binding in law, if it is such as to indicate that it was intended to be acted on as genuine.

R.S., c. C-34, s. 324.



Uttering forged document

368. (1) Every one who, knowing that a document is forged,

(a) uses, deals with or acts on it, or

(b) causes or attempts to cause any person to use, deal with or act on it,

as if the document were genuine,

(c) is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years; or

(d) is guilty of an offence punishable on summary conviction.

Wherever forged

(2) For the purposes of proceedings under this section, the place where a document was forged is not material.

R.S., 1985, c. C-46, s. 368; 1992, c. 1, s. 60(F); 1997, c. 18, s. 25.

We will count this as violation #32 of rules, laws, codes etc that the investment industry gets to "get away with".
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 7:58 pm

to speed things along I will simply post the site of some of the public case examples that illustrate the use of industry tricks to defraud investors of their money or their rightful earnings on their money invested:

http://investorvoice.ca/Cases/Investor/ ... _Cases.htm

You will see so called protective agencies like investment dealers self regulatory groups brushing seniors aside when they complain about investment dealers...........saying "Mr. Simpson was not affected by the decision".......and "therefore not every decision meets the definition of a decision" etc.

There are several stories on Ernie Wotton's plight " 81 year old Abused Investor denied justice by IDA and OSC". I listened to his speech given to the Ontario Legislature as he spoke about how each and every agency in Canada that was supposed to protect investors, basically ran him in circles for years.

The list could go on forever, most cases are a) not reported, b) not public, c) settled with gag orders forcing abused investors to promise to remain silent about their abuse, to get even pennies on the dollar back. Canada uses the 30 odd (and many others unknown to me) common violations of financial rules, codes or laws to violate customers freely. Daily. Easily. With impunity.

I will move on now from client cases, and touch on some criminal code violations that I am afraid that our investment industry gets a free ride on.....because we regulate ourselves.....ha!
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Re: How many rules, laws, principles can we violate?

Postby admin » Mon Sep 12, 2011 7:49 pm

http://investorvoice.ca/Cases/Investor/ ... _index.htm

Don't even read this case if you do not want to make yourself sick at the predatory nature of a "trusted" Canadian Bank.

Violates any concept of written codes, rules, laws, (letter or spirit) and decency. Steals seniors entire account from them to protect the bank, because "we can".
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