Financial industry

White-Collar Crime In Canada

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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.

SEC Exposes Whistleblower: Inadvertent? STOP IT!!

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Larry Doyle – April 25, 2012

News this morning that an SEC attorney, in the midst of an investigation, blew the cover of a whistleblower might have been formerly thought of as inadvertent or unfortunate. America is no longer so naive.

SEC Kowtows to Fortune 500, Whistleblower Says

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Matt Reynolds – April 27, 2012

The SEC allows the nation's richest firms and financial institutions - and only the biggest and richest firms - to handpick the lawyers investigating them for corruption, a whistleblower claims in Federal Court.

Rodolfo Michelon claims that the SEC runs an exclusive "outsourcing program" for Wall Street, neutering incentives and protections for whistleblowers under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Canadian banks received 'secret' bailout: Think-tank

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Peter Henderson – April 30, 2012

Canadians were never told the true cost of a $114-billion "secret bailout" for the country's biggest banks during the financial crisis, says a report from the Canadian Centre for Policy Alternatives. "We've had a false sense of security," said study author and CCPA economist David MacDonald.

"Ever since the global financial crisis struck in 2008, Canadians have been subjected to a constant refrain: Canada has the 'most sound banking system in the world,'" MacDonald writes in the report. "During the worst of the crisis - 2008 to 2010 - the official line was that Canada's banks did not require the extraordinary bailout measures that were being offered in other countries, particularly in the U.S.

TD Bank Faces Sanctions Request After Losing $67 Million Verdict

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David Voreacos and Susannah Nesmith – Apr 19, 2012

Toronto-Dominion Bank, after losing a $67 million verdict over claims it aided a $1.2 billion Ponzi scheme, should be sanctioned for “altering” a document used at trial, an investor said in court papers.

Coquina Investments, which won the verdict on Jan. 18 in federal court in Miami, seeks sanctions after a trial over whether TD Bank should have detected money laundering that supported a Ponzi scheme that disbarred attorney Scott Rothstein ran out of his law firm.

Financial industry employees reluctant to blow the whistle

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Alexander Eichler – April 13, 2012

How come there aren't more whistleblowers? It's a vexing question for anyone who'd like to see corporate crime reduced. Just this week, CNN noted that half of all misconduct at financial companies never gets reported, according to a study conducted by the Corporate Executive Board, a Virginia consulting firm.

But another recent story, this one in The New York Times, provides a painful illustration of why potential whistleblowers may not be that interested in speaking up. Not every whistleblower has an experience like Lynn Szymoniak, the mortgage-fraud tipster who got an $18 million settlement for her troubles. Often things can go a lot worse -- like they have for Jack Palmer.

What will it take for finance workers to report wrongdoing?

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Gary M. Stern – April 11, 2012

Half of all observed misconduct goes unreported, and a majority of managers said they'd only divulge information to a senior executive if the impact of the case exceeded $1 million, according to a recent study.

Turning a blind eye to the wrongdoing of colleagues has become the norm at many financial services firms. Despite the MF Global debacle, the rogue traders at UBS and Societe Generale, the subprime mortgage mess, and Goldman Sachs' tarnished reputation, most corporate employees continue to withhold information about misconduct by colleagues on issues they know are wrong, until it turns into a major financial imbroglio, according to a recent study.

Interview with Bruce Livesey: Thieves of Bay Street

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The Current – April 13, 2012

Bruce Livesey

Are we immune from a Wall Street style meltdown? A controversial book raises doubts that our banking and financial system is somehow morally superior and more secure than our American neighbours. It suggests that not only are Canada's Captains of the money industry capable of corruption, the system does little to protect you from them.

When the financial and real estate markets melted down in 2008, Canada's banks became super heroes. They were the envy of the world celebrated models of responsibility and prudence. It seemed to suggest the worst economic crisis in half-a-century demonstrated how lucky we were to have our financial futures invested in this country.

Book Review: Thieves of Bay Street, by Bruce Livesey

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Thieves of Bay Street

Alex Good – April 13, 2012

Thieves of Bay Street: How the Banks, Brokerages and the Wealthy Steal Billions from Canadians, by Bruce Livesey (Random House, 313 pages, $32 hardcover)

One thing we can thank the recent credit crisis and global financial meltdown for is the way it lifted the lid on a sector of the economy we hadn’t been giving enough attention.

That sector is the financial industry. In Thieves of Bay Street, investigative journalist Bruce Livesey looks at how Canada’s banks, brokerages, funds, and financial advisers have been ripping off Canadians for years. And while headline makers like Conrad Black and Earl Jones dominate Livesey’s chronicles of white collar crime, the not-so-few bad apples aren’t as important as the rotten barrel he describes.

Alleged misconduct at SNC-Lavalin and RBC: Where was the Board?

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Richard Leblanc – April 9, 2012

If the CEO of SNC-Lavalin allegedly overrode his own CFO and breached the company’s code of ethics in authorizing $56 million of questionable payments to undisclosed agents that the RCMP are now investigating, did the board of directors of SNC-Lavalin have a role to play?

If RBC made 'material false statements' in connection with non-arms length trades, which is being alleged by a U.S. regulator, did the board of directors of RBC have a role to play?

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