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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 - OBSI an industry body trying to help the public?

OBSI an industry body trying to help the public?

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OBSI an industry body trying to help the public?

Postby admin » Mon Aug 31, 2009 9:59 pm

Kenmar Associates
Investor Education and Protection
1
ALERT ALERT ALERT ALERT September 3, 2009
the Ombudsman for Banking Services and Investments
To: Retail Investors
Widows and widowers
Seniors
Retirees and pensioners
The infirm

Many investors believe that the Ombudsman for Banking Services and Investments (OBSI) is a
government agency. It is not. OBSI is an industry sponsored and industry funded entity.
According to an Agreement with the CSA , dealers must utilize OBSI but there is no requirement
for bank participation as was evidenced in 2008 when RBC Banking arbitrarily decided to pull
out of OBSI In October, 2007 the report from the Navigator Company, an Australian firm with
extensive experience in external reviews of ombudsman services, was released .The 24
improvement recommendations outlined in the report were to be addressed by the introduction of
new Terms of Reference on April 1, 2009. This date was missed and the key improvements are
not implemented as of the date of this ALERT.
OBSI has appointed Douglas Melville as new Ombudsman and CEO effective August 25,
2009. His bio at https://www.obsi.ca/images/document/up-
1Douglas_Melville_Bio_sketch_EN.pdf We are hopeful that the many reforms needed will be
implemented under his leadership.
We have recently received a growing number of questions and complaints about this
organization. Here are a few cautionary tips, should you have occasion to bring your complaints
to them for resolution:

A. Direct dealings:

1. Never attend an interview (aka interrogation) with OBSI without being prepped by a
professional.
2. Don't allow them to put words in your mouth.-ask if conversation is being taped
3 Don't let them cross-examine you – always have a witness with you
4 Don't think that they are your friend, and get lulled into a false sense of security -they are
financed by the securities industry.
5 Make a list of everything you want to say and make sure you say it whether you are asked
about it or not
6. Do not volunteer information and do not answer questions you do not believe are relevant to
your case. Assume anything you say can and will be used against you.

B. Statute of Limitations

Every province in Canada has a statute of limitation .This is the time period in which you have to
take civil action. In Ontario the time spent with OBSI stops the limitation time clock [the
limitation time period in Ontario is a short two years]... In other provinces be sure to check what
the time period is, otherwise you may find that the time taken dealing with the firm and the time
Kenmar Associates
Investor Education and Protection
2
taken dealing with OBSI may use up all the available time. Once the limitation period is
consumed, civil action cannot be taken. OBSI have a target of completing 80 percent of their files
within 180 days. Some files can take longer, a year or more.

C. Consent for release is one-way

When OBSI undertakes to investigate your complaint, they send you a letter asking you to sign a
Consent for the release of your personal information, by your brokerage house to them. In the
letter to you, OBSI say that they may also request you to provide them with certain documents
related to your complaint, and “We may discuss your complaint with [firm name] and we may
exchange information and documents between you and [firm name]. We also may need to provide
information or documents to advisors outside of OBSI who we consult about your complaint.
“. It is significant to note that although OBSI may provide your brokerage house with the
information or documents that you have provided to them, there is no corresponding obligation
on their part to furnish you with copies of any information or documents that your brokerage
house may have provided to them, in the course of OBSI’s investigations. These documents may
be of great importance to you to help you make an informed decision as to whether to accept or
reject any recommendation OBSI may make to you, with regard to a possible settlement of your
complaint.

D. Right to inform police and regulators

We have come across yet another issue with OBSI. Specifically, it appears that their new
standard Consent letter has language that may prohibit you turning over their recommendation
Report to police or securities regulators even if you believe it could help your case in the event
fraud or other illegal act is suspected. The form’s language is set out below:

“ .. The success of our process depends on both you and [firm name] dealing with OBSI in a frank
and open manner. By signing this letter, you and [firm name] agree that OBSI’s correspondence, files
and any discussions we have during our review are confidential. You and [firm name] agree that if
there are subsequent legal or other proceedings you will not use any correspondence or information
from our process. Neither you nor [firm name] will try to compel OBSI to produce its files or
records. Nor will you try to have the Ombudsman, any OBSI staff member or advisor give evidence
or testify…”

We are continuing to work this issue with OBSI as we believe it encroaches on civil rights and
acts as an obstruction of justice. Of course, if they receive a subpoena from law enforcement they
will provide the Report but we feel that as a Canadian citizen you should have the right to turn
over documents you believe are relevant evidence without any constraint.




Contact kenkiv@sympaico.ca for a copy of the OBSI Survival Guide. It may save you a lot of
time, trouble and money.
admin
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