When it comes to protecting its citizens from white-collar crime and predatory practices within the investment industry, Canada resembles a third-world country.
Although most Canadians are oblivious to this situation, sophisticated players know all too well and are leery of investing here – while fraudsters and scam artists are drawn to Canada by the attraction of weak laws and virtually non-existent enforcement.
Canadians have stashed a staggering $170 billion in the top 12 global tax havens around the world, says a watchdog group that is calling on the federal government to do more to combat offshore tax evasion.
At the same time, only 44 Canadians were convicted of offshore tax evasion between April 2006 — shortly after the Harper government took office — and March 2012, according to new documents tabled in Parliament, raising new questions about the Conservative government’s record on the file.
When he appeared in a Madrid court, banking whistleblower Hervé Falciani was disguised with a wig and thick-framed glasses. Facing extradition, the man behind the "Lagarde list" of potential tax cheats said in a newspaper interview he had fled to Spain last year when the US authorities told him it was the only country in Europe where his life would not be in danger.
Now Falciani, 41, whose spectacular theft of account data from a Swiss subsidiary of HSBC in 2006-7 has helped uncover thousands of wealthy tax fraudsters, is about to find out if he will be extradited to Switzerland, where he faces prosecution and up to seven years in jail.
For troubled youth or couples seeking counselling, the Northwood Family Office might sound like the place to go. Except for one thing -- you can't get in the front door without $10 million.
That's rock-bottom what you'll need. The Northwood Family Office caters to families with assets ranging from $10 million to $500 million. (So don't think you can sneak in with just $9 million.) Despite its homey sounding name, the office is actually a boutique Toronto firm that offers wealth management services for the very rich -- a growing industry in Canada, even while growth in much of the rest of our economy remains stagnant.
New Zealand may follow the United States' lead and introduce payments to financial whistleblowers. US fraud investigator Harry Markopolos, in Auckland this week for the Serious Fraud Office's economic crime network conference, was the whistleblower in Bernie Madoff's $US65 billion ponzi scheme – one of the biggest frauds in history.
SFO acting chief executive Simon McArley says New Zealand doesn't have such a scheme but talks with government officials about enacting one here are in the early stages. "Obviously, the cost is a factor but it definitely seems to be working in the US so it's worth having a look at."
You may have heard last week about a couple of big lawsuits brought by federal and state governments, alleging that the credit rating agency Standard & Poor's concocted a fraudulent scheme that contributed to trillions of dollars in investment losses and the cratering of pretty much the entire world financial system.
Those are serious charges, and the federal government's demand for $5 billion in penalties isn't peanuts. Yet there's something bloodless about the lawsuits, for the simple reason that they don't point the finger at any particular person who was responsible for these dastardly doings.
A great many people around the county were rightfully shocked and horrified by the recent excellent and hard-hitting PBS documentary, The Untouchables, which looked at the problem of high-ranking Wall Street crooks going unpunished in the wake of the financial crisis. The PBS piece certainly rattled some cages, particularly in Washington, in a way that few media efforts succeed in doing.
Now, two very interesting and upsetting footnotes to that groundbreaking documentary have emerged in the last weeks. The first involves one of the people interviewed for the story, a former high-ranking executive from Countrywide financial who turned whistleblower named Michael Winston.
On March 16, 2007, Morgan Stanley employees working on one of the toxic assets that helped blow up the world economy discussed what to name it. Among the team members' suggestions: "Subprime Meltdown," "Hitman," "Nuclear Holocaust," "Mike Tyson's Punchout," and the simple-yet-direct: "Shitbag."
Ha ha. Those hilarious investment bankers. Then they gave it its real name and sold it to a Chinese bank.
Banca Monte dei Paschi di Siena, the world's oldest bank, was making loans when Michelangelo and Leonardo da Vinci were young men and before Columbus sailed to the New World. The bank survived the Italian War, which saw Siena's surrender to Spain in 1555, the Napoleonic campaign, the Second World War and assorted bouts of plague and poverty.
But MPS may not survive the twin threats of a gruesomely expensive takeover gone bad and a derivatives scandal that may result in legal action against the bank's former executives. After five centuries of independence, MPS may have to be nationalized as its losses soar and its value sinks.
In an interview with the Real News Network's Paul Jay, Professor Michael Greenberger claims that weak regulations on speculators swamping markets and lack of enforcement of existing laws on criminal intent, are driving up prices.
Greenberger is a professor at the University of Maryland School of Law, where he teaches a course entitled "Futures, Options and Derivatives." Professor Greenberger serves as the Technical Advisor to the United Nations Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System.
