A WEAK ATTEMPT AT PROPAGANDA BY THE CANADIAN SECURITIES ADMINISTRATORS!!!

****PUBLISHED PREVIOUSLY****

On December 19, 2017, the whiny Canadian Securities Administrators (“CSA”) felt the need to issue a Press Release in regards to the media attention their failures are causing the good people and capital markets in Canada.    Why now?   Media is hammering them over their dismal record of allowing fraudsters in the capital markets to run wild with little to no recourse.

We here read over the release and find it very comical and so very inaccurate.  Let’t take a closer look – Our comments will be in bold below…

December 19, 2017

Toronto – Over the past week, the Globe and Mail (Globe) has published multiple reports on enforcement in Canada’s capital markets. In response to this recent media commentary, the Canadian Securities Administrators (CSA) today issued the following statement:

The CSA, the council of securities regulators of Canada’s provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets. CSA enforcement teams work to protect the integrity of our capital markets and strive for responsive, collaborative and effective enforcement of securities laws. While the vibrancy, depth and overall health of the Canadian capital markets have been internationally recognized, Canada, like all markets, has criminals who prey on the investing public. We do everything in our power to identify, investigate and prosecute those individuals. We are concerned with how these enforcement efforts have been mischaracterized and wish to highlight some specific issues with the Globe’s coverage:

(IT’S FUNNY – WHY DID JUST THE GLOBE AND MAIL ARTICLE GET THE ATTENTION OF THE CSA?   THE VANCOUVER SUN AND PROVINCE HAVE BEEN HAMMERING THE BCSC THE LAST FEW WEEKS WITH ONLINE AND PRINT STORIES OUTLINING THE BCSC’S FAILURE TO COLLECT ON THE HUNDREDS OF MILLIONS OF DOLLARS THEY HAVE ISSUED IN FINES AND DISGORGEMENT ORDERS IN THE DECADE OR SO.    MANY OTHERS HAVE BEEN OUTSPOKEN IN THE LAST FEW YEARS BUT ESSENTIALLY NOTHING FROM THE PRESS – WHY NOW?) 

  1. Securities regulators do not have statutory authority to pursue criminal offences. In recognition, several securities regulators have strengthened their ability to address misconduct in the capital markets by developing partnerships with law enforcement.   THE BCSC (AND I WOULD ASSUME ALL OF THE CANADIAN REGULATORS) ABSOLUTELY HAVE THE ABILITY TO PURSUE CRIMINAL OFFENCES.  THE BCSC SPENT HUNDREDS OF THOUSANDS OF DOLLARS BRINGING IN A FANCY DIRECTOR OF ENFORCEMENT (THERESA MITCHELL-BANKS) AND HAVE (OR HAD) RCMP PHYSICALLY WORKING IN THEIR OFFICE.  MITCHELL-BANKS WAS FIRED IN DECEMBER 2015 AND PAID A VERY HEALTHY SEVERANCE PACKAGE.   FOR THE CSA TO SAY THEY DO NOT HAVE AUTHORITY TO PURSUE CRIMINAL CHARGES IS ABSURD.   FACTS ARE THEY HAVE TO CHOOSE VERY EARLY ON IN AN INVESTIGATION AS TO WHETHER OR NOT THEY WANT TO PURSUE CRIMINAL CHARGES.   AND THIS OPENS ANOTHER COMPLETELY DIFFERENT BURDEN OF PROOF NEEDED FOR CHARGES TO EVEN BE BROUGHT FORWARD. 
  1. In order for securities regulators to access tools under the Criminal Code (e.g. power of arrest, ability to execute warrants), police officers must be seconded to securities commissions. More law enforcement resources are always welcome.  AGAIN, WE HAVE IT ON VERY HIGH AUTHORITY THAT IN AS EARLY AS 2013 THERE WERE PHYSICALLY RCMP OFFICERS WORKING AT DESKS INSIDE THE BCSC.    FURTHERMORE, THE RCMP HAVE PHYSICALLY BEEN PRESENT WHEN BCSC INVESTIGATORS HAVE ISSUED SUMMONS TO RESPONDENTS IN AT LEAST 3 MATTERS WE HAVE LOOKED INTO.    
  1. Law enforcement is primarily responsible for investigating financial crime in Canada, and there is a dedicated unit of the RCMP (Integrated Market Enforcement Team) set up for this purpose. Despite the importance of law enforcement and their role in pursuing recidivists, the Globe chose not to seek comment from the RCMP or local law enforcement, nor did it include any statistical data from these agencies.   THIS POINT IS REALLY CONFUSING – I THOUGHT IN THE POINTS  ABOVE THEY INDICATED, “Securities regulators do not have statutory authority to pursue criminal offences” YET HERE THEY ARE INDICATING THEY HAVE ACCESS TO A DEDICATED UNIT OF THE RCMP?   WHO WROTE THIS?  WHAT A COMPLETE JOKE!  MAYBE THE GLOBE AND MAIL DIDN’T SEEK COMMENT FROM THEM BECAUSE THEY ARE NOT DOING ANYTHING TO ASSIST AND INTERVIEWING THEM WOULD BE POINTLESS.  
  1. Securities regulators work together to address misconduct in Canada’s capital markets, and the Globe was provided with multiple examples of these collaborative efforts. For example, several securities regulators have Statutory Reciprocal Order Provisions, which essentially means that an order issued by one regulator is automatically in effect within all jurisdictions with these provisions. It should be noted that these provisions were introduced specifically to curb inter-provincial/territorial wrongdoing by repeat offenders.  GREAT!  WHATS THE POINT?   THE PROVISIONS ARE WONDERFUL AT GETTING FRAUDSTERS FROM MOVING PROVINCES.    WHY WON’T THE BCSC TELL THE REPORTER FROM THE VANCOUVER SUN WHO IS IN CHARGE OF COLLECTING THE DEBTS AT THE BCSC?   ONE COMMENT WE WILL MAKE HERE THOUGH IS HOW CAN A CANADIAN (UNDER THE CHARTER OF RIGHTS AND FREEDOMS) BE FOUND GUILTY IN A PROVINCE WITHOUT GETTING A HEARING AND A CHANCE TO DEFEND THEMSELVES?   IT HAPPENS IN ALBERTA ON A DAILY BASIS SINCE JULY 2015.  (CLICK HERE)
  1. Securities regulators can and do pursue jail time where they have the authority to do so.  TECHNICALLY, ALL OF THE SECURITIES REGULATORS CAN PURSUE JAIL TIME WITH CRIMINAL INVESTIGATIONS AND CHARGES IN ALL CASES.  THEY DON’T FOR A VARIETY OF REASONS INCLUDING INCOMPETENCE, RESOURCES, AND RUINING THEIR INTERNAL WAYS OF REGULATING.   INCOMPETENCE IS AN EASY ONE – THEIR STAFF ARE MOSTLY TRAINED WITHIN AND ARE AMATEURS AT BEST.  MOST DO NOT HAVE THE TRAINING OR SKILLS REQUIRED TO BRING FORWARD CRIMINAL ALLEGATIONS.   PURSUING CRIMINAL CHARGES WOULD TAKE FAR MORE RESOURCES AND WOULD CUT INTO THE BCSC’S FANCY LITTLE BANK ACCOUNT – CRIMINAL LAWYERS ARE EXPENSIVE.    AND FINALLY THE BURDEN OF PROOF IS FAR HIGHER IN A CRIMINAL MATTER AND WOULD BE ARGUED BEFORE REAL JUDGES AND NOT APPOINTED COMMISSIONAIRES.   ALLEGATIONS IN MY CASE WOULD HAVE NEVER MADE IT INTO A REAL COURTROOM AS THEY WERE VERY CIRCUMSTANTIAL AND INACCURATE.    SO CIRCUMSTANTIAL THAT THE LAWYERS HAD TO MANIPULATE EVIDENCE IN AN ATTEMPT TO PROVE THEIR FEEBLE CASE!   TAKE A LOOK HERE
  1. Courts make decisions about sentencing in criminal matters, not securities regulators.    THIS IS EXACTLY MY POINT IN #5 ABOVE – REGULATORS ADMINISTER THESE HUGE FINES WHERE A REAL JUDGE WOULD NOT LEGALLY BE ABLE TO DO SO.   I ALWAYS USE THE ANALOGY THAT IF A PERSON COMMITS A CRIME IN CANADA (SAY THEFT OVER $5000) – THIS PERSON IS GUARANTEED TO GET A FAIR TRIAL IN FRONT OF A JUDGE OR JURY, HE WILL NOT BE COMPELLED TO TESTIFY AGAINST HIMSELF, AND HIS PUNISHMENT WILL FIT THE CRIME ACCORDING TO LAW AND PREVIOUS CASE LAW.   THIS IS NOT THE CASE WHEN A RESPONDENT IS FACED WITH ALLEGATIONS FROM A SECURITIES REGULATOR IN THIS COUNTRY.   IN MANY (IF NOT ALL) RESPONDENTS ARE MADE TO ATTEND COMPELLED INTERVIEWS WHERE STAFF ARE ABLE TO ASK ANY QUESTION THEY WANT AND CAN USE THESE ANSWERS TO BRING ALLEGATIONS TO A HEARING ROOM.  THE HEARING IS DONE IN FRONT OF BIASED,  PAID COMMISSIONAIRES – IT IS NOT IN THESE COMMISSIONAIRES BEST INTEREST TO STAY CHARGES IF THEY WANT TO KEEP THEIR APPOINTMENTS(AND MONEY COMING IN).   THE REGULATORS (SPECIFICALLY AT THE BCSC) HAVE ISSUED FINES THAT DO NOT SUIT THE LEVEL OF WRONGDOING.   THAT CRIMINAL THAT WE MENTIONED ABOVE DOES HIS TIME AND HE IS RELEASED FROM PRISON AND IS INTEGRATED BACK INTO SOCIETY – THIS IS NOT THE CASE WITH THE BCSC.   EVEN SOMEONE WHO COMMITS MURDER IN CANADA DOESN’T HAVE TO TESTIFY AGAINST THEMSELVES BECAUSE IT IS IN THE CHARTER OF RIGHTS AND FREEDOMS.    
  1. The Globe notes that former Bank of Canada governor David Dodge spoke of the “widely held perception that Canadian authorities aren’t tough enough.” This quote was taken from a speech delivered 13 years ago in which the former governor actually said he was encouraged that provincial securities commissions were taking steps to toughen enforcement.  THIS IS RATHER A MUTE POINT – WE WOULD AGREE WITH THE CSA WITH THIS COMMENT – IT IS RATHER OLD AND STALE.   BUT WHAT ABOUT THE HUNDREDS (click on link) OF OTHERS THAT HAVE COMMENTED OVER THE PAST FEW YEARS, WEEKS, AND EVEN DAYS?   WE POSTED THIS (click on link) TO OUR BLOG IN AUGUST 2016 WHERE EVEN THE FORMER HEAD OF THE ONTARIO SECURITIES COMMISSION WAS CRITICAL OF THE ACTIONS OF THE CSA.    THERE ARE DOZENS OF COMMENTS ON THE INTERNET ON A REGULAR BASIS.   IN A SIMPLE GOOGLE SEARCH WE HAVE FOUND DOZENS INCLUDING THIS VERY FUNNY ONE REGARDING THE FORMER CHAIR OF THE ASC….HE ACTUALLY HAD A SEX DOLL IN HIS OFFICE   THERE ARE FACEBOOK PAGES, TWITTER PAGES, ETC. THAT HAVE ALL BROUGHT WRONGDOING BY REGULATORS TO THE FOREFRONT.  FACTS ARE, THE REGULATORS HAVE DROPPED THE BALL FOR DECADES NOW.   THIS IS BECAUSE NO ONE REALLY GOVERNS THEM – THEY ARE NOT ACCOUNTABLE TO ANYONE -ESPECIALLY NOT THE PEOPLE OF THIS COUNTRY!  
  1. Securities regulators dedicate significant resources to helping investors protect themselves from fraud. These include local investor education initiatives, national campaigns about avoiding investment fraud, and a National Registration Search tool that investors can use to check whether an individual or firm is registered with provincial securities regulators.  THAT’S GREAT!   BUT AS WE CAN SEE FROM THIS ARTICLE – ONLY 4% OF THE ADVISERS CHECK OUT WERE REGISTERED WITH THE CSA!   THIS MEANS THOUSANDS OF FINANCIAL PLANNERS IN CANADA ARE NOT REGISTERED – WHAT HAPPENS THEN?   THIS DOES NOT EVEN ACCOUNT FOR THE WHOLE ADVISOR/ADVISER FIASCO THAT THE CSA AND THEIR PROVINCIAL PARTNERS HAVE CAUSED! 
  1. The Globe has stated that its investigation is based on an analysis of 30 years of data contained in the CSA’s Disciplined List. This database does not contain 30 years of national data. Some securities commissions have uploaded data dating back just over 10 years.   WHO CARES?  YOU BOZOS ARE GRASPING!  DOES IT REALLY MATTER WHEN IT ALL STARTED?  THE SYSTEM IS BROKEN AND DATA WHETHER IT IS 30, 20, 10 OR EVEN 5 YEARS OLD DOES NOT LIE!  YOU PEOPLE ARE MORE CONCERNED WITH PROTECTING YOUR BIG BUSINESS PARTNERS THAN PROTECTING THE AVERAGE CITIZEN!   THINK I AM WRONG – PROVE IT!   GET OFF YOUR ASSES AND MAKE THESE PROVINCIAL REGULATORS DO THEIR JOBS WHICH IS TO PROTECT THE PEOPLE OF THE PROVINCE USING FAIR, ETHICAL METHODS.  STOP PAYING PEOPLE LIKE BRENDA LEONG $500,000 PER YEAR AND FIRE HER ASS OUT THE DOOR FOR INCOMPETENCE!   CONTACT ME AND I WILL SHOW YOU HER COMPLETE AND SHAMEFUL HIGH-HANDED ACTS THAT WILL MAKE YOU HEAD SHAKE.   

The CSA supports having a national dialogue about what more can be done to deter recidivists, however, that discussion must be based on facts and must involve all participants in the justice system, including law enforcement.   WHAT’S STOPPING YOU??  COULD IT BE THE RACKET THAT THE PROVINCIAL REGULATORS CURRENTLY RUN BUCKSHOT OVER?  SAD REALLY!  YOU PEOPLE ARE ALL AT FAULT OF THE MESS THAT IS THE CANADIAN SECURITIES ADMINISTRATORS! 

DID ALBERTA SECURITIES COMMISSION ASSIST WALTON INTERNATIONAL IN PROMOTING BUSINESS?

***ORIGINALLY POSTED IN JULY 2017***

What a last couple of weeks it has been for Walton International – the Alberta Securities Commission suspended Walton’s registration which prohibits them from selling any more of their investments.  And then they hired Ernst & Young to take them through the CCAA process in an attempt to re-organize their debt.   This sounds almost identical as the League Assets story we discussed last summer in this blog post.     One can conclude the Walton matter will have the same ending!   How can a company make hundreds of millions of dollars selling land be broke after 25+ years of being in business?  Rumor on the street is the company is being gutted and those (at the top) have already cashed out their millions…

WAS THIS ALL PREDICTABLE?

Back a few years ago I came across a Sales Representative that worked at Walton International at a Calgary Flames hockey game.  After chatting for a few minutes he suggested I look at his investment opportunity – it was a parcel of land down by Spruce Meadows (in the southern tip of Calgary).    Although I was not interested in the investment, I agreed to meet with him at his office a short while later.

I remember their office being really nice and it seemed like they had a ton of staff.  After receiving a brief sales pitch I was sent on my way with an envelope full of paperwork.   Some time later, I opened the envelope and (as part of the package) discovered a letter from a lawyer named Donald Boykiw from the fancy Bennett Jones LLP law firm.

The letter is short and cuts to the point – it indicates that Boykiw is writing to inform Walton that the Alberta Securities Commission had reviewed Walton’s business practice of selling undivided interest in land to purchasers and that this review had been done as a result of sanctions against Walton’s prime competition in Alberta land banking.    Boykiw goes on to state, “I would also advise that the Commission staff member who was involved in this matter has further advised that the ASC’s enforcement counsel would not be recommending any changes to the current forms of referral arrangements for both the mortgage referrals from Westmount Mortgage Corporation and the land referrals from Cordex Realty.   We have also received a follow-up call from the registration counsel at the Alberta Securities Commission indicating that they ave also completed their review of such referral agreements and were not proposing any changes.”    A copy of the letter:  

The significance of this letter is simple – Walton International’s business model sees them allegedly buying farm land for as little as $400 per acre and turn around only days later and sell it for up to 7000% increases to investors from all over the World – and the gang down at the ASC gave them a clean bill of health while sanctioning others in the same line of work.    And don’t forget – this happened during Ralph Klein’s duration as Premier of Alberta who’s daughter physically worked at Walton’s head office.

For those people that do not know who Walton International are (or were) – they purported to be the largest land banker (and then later land developer) in the nation.    They had many projects throughout Canada and the United States.   They had come under fire in some circles for paying huge upfront commission to their sales people and for having lavish spending sprees on chartered boats and trips for Staff.   In one instance, it was reported they had chartered a large ship and had the expensive Self-Help Guru Anthony Robbins as a guest to get their staff motivated to sell their product.

Facts are – may people have been reporting on Walton’s demise for years.   A simple google search has found us endless reports from press from all over the World suggesting Walton’s business plan had some distinct cracks and was leaking severally.   An article in the Ottawa Citizen from March 2013 suggests the land banking project in Ottawa was in trouble.

What happened in Singapore when they had several complaints about many Land Banking firms – even Walton International?   Out comes the huge Public Relations wheel and they brought an entire news crew to see their operations in Canada….

This video is so biased towards Walton but comes across as some bi-partial news telecast – We wonder how much more they raised after this video made the rounds…

Would this all have been avoided IF the ASC had not given them that clean bill of health back in 2002 – that they used as a sales aid for their sales people???  Shame on the ASC!   This story is going to be huge when the cards ALL come falling down – and this letter is going to be used in any case against the ASC!   How are they going to be able to protect the Walton Investors when they are complicit in allowing Walton to exist – even going as far as giving legal advice that their sales people used to close the unexpected investors?