A draft study commissioned by the Public Safety Department, reported in Investment Executive, warns that Canada’s multi-jurisdictional regulatory system leaves the securities system vulnerable to organized crime. The study highlights several weaknesses that FAIR Canada identified in its Report on a Decade of Financial Scandals, including “a lack of co-ordination and political will to target violators, complicated multi-jurisdictional regulatory systems…

David Baines of the Vancouver Sun has published another article detailing an abusive leverage strategy. Enzo DuVuono recommended and sold $750,000 worth of mutual funds, using their $500,000 home as collateral, to an older couple who were “experiencing difficulty paying their monthly expenses”. The MFDA has alleged that DuVuono did so without ensuring that the investments and leveraged investment strategy were suitable and appropriate for the clients, who were 77 years old and retired and 56 years old and unemployed…

In a recent Globe & Mail column, columnist Preet Banerjee demonstrates how investments fees will consume a large portion of your original investment over time. For example, if you invest in a mutual fund with an MER of 2.36 per cent, the MER will consume 44.96 per cent of your original investment over 25 years. A prospectus will often convey this by a chart which shows an investor will pay $300 on a $1,000 investment over 10 years…

On December 22, the Supreme Court of Canada (SCC) released its decision on the constitutional reference, stating that the federal government’s proposed national Securities Act was unconstitutional because, viewed in its entirety, the proposed Act included matters that remain essentially provincial concerns. While the SCC stated that elements of the proposed Act were of national concern, it found that the proposed Act overreaches genuine national concerns…

FAIR Canada made a presentation at the OSC’s Policy Hearing on the Maple Group Acquisition Corporation Application to acquire TMX Group Inc., Alpha Trading Systems Limited Partnership, Alpha Trading Systems Inc., The Canadian Depository for Securities Limited and, indirectly, CDS Clearing and Depository Services Inc. (the “Maple Policy Hearing”)…

FAIR Canada has provided comments to the OSC on the proposed OSC staff enforcement initiatives. Over the past year the OSC has intensified its enforcement efforts and these efforts have produced much improved results. Major challenges remain, especially with investigation and prosecution of non-complaint emerging market listed companies. FAIR Canada is concerned that the proposed no-contest settlement program will make it more difficult for investors to recover losses and will not deter corporations and individuals from violating securities laws…

Over the past year the OSC has intensified its enforcement efforts and these efforts have produced much improved results. Major challenges remain especially with investigation and prosecution of emerging market listed companies. OSC staff proposed a number of policy initiatives to enhance it enforcement toolkit in OSC Staff Notice 15-704 (the “Staff Notice”). FAIR Canada has provided comments to the proposed enforcement initiatives…

Jonathan Chevreau of the Financial Post has written some recent articles questioning how sincere the mutual fund industry in Canada is in improving financial literacy given that Canada’s MERs are amongst the highest in the world. While knowledge of fees is improving, many investors are still unaware of the impact of high fees and are wrongly trusting mutual fund salespeople to act in their best interest…

Since our last newsletter on OBSI, FAIR Canada has written an open letter to Minister Flaherty, Canada’s Minister of Finance, in support of OBSI as the single external dispute resolution (EDR) provider for complaints arising from the banking sector. We pointed out that one single EDR provider is necessary in order to avoid fragmentation, inconsistencies, serious potential conflicts of interest, consumer confusion, and to enable the detection of systemic or widespread issues. As stated by OBSI’s Board…

FAIR Canada recently wrote an open letter to Minister Flaherty, Canada’s Minister of Finance, urging him to designate the Ombudsman for Banking Services and Investments (OBSI) as the approved, sole provider of external dispute resolution (EDR) for financial client complaints and to make the recommendations of OBSI binding. A single dispute resolution service provider is necessary in order to avoid fragmentation, inconsistencies, serious potential conflicts of interest, consumer confusion, and to enable the detection of systemic or widespread issues…