Monday, 27 February 2017

Report From SIPA Details Mass Fraud in Canada

 More on the mass amount of financial fraud allowed to take place in Canada right underneath the noses of the very regulators who are supposed to protect Canadians, a report from the Small Investors Protection Association details the depths of the scam.

Here is an exert from that report,


"Financial Advisor, as you noted, is a common title which many persons use, whether they are registered under securities legislation or not. The use of this title is not generally prohibited, and may be used by anyone, including persons who are only licensed to deal in insurance products, mortgage brokers, deposit agents, or employees of financial institutions. …

As with Financial Advisor, the title of Vice President is increasingly a common title used in the fi-nancial services industry. While an officer of a firm may be designated to be a vice president, the use of the title is not reserved to actual officers of a corporation. As such, it is not safe to assume a person described as a vice president is in fact an officer of that corporation."
Chris Besko Acting General Counsel & Acting Director The Manitoba Securities Commission

(In response to SIPA inquiry to the CSA Secretariat)
 Securities Acts define an "Adviser" as having responsibility to look after investors’ best interests.

 Regulators say "Financial Advisor" is an unregulated business title that can be used by anyone.

 Sales persons are not legally required to look after investors’ best interests.

 Industry uses the title "Financial Advisor" for their sales persons to gain trust.
Executive Summary:
Securities Regulators selectively ignore portions of Provincial Securities Acts, letting Investment Dealers deceive millions of Canadian investors in many ways. We will be issuing a series of reports intended to shine a light onto this harm being done to Canadians, by many of our most trusted institutions as well as government authorized regulatory bodies.

In this report, we examine how over 100,000 financial professionals in Canada take advantage and skirt laws against misrepresentation. This allows investment sellers a clear "get-away" from the laws against deception of the public.

In 2012 one of the biggest news stories in Canada was about a selective meat inspection process in Alberta, and the resulting harm to Canadians. It turns out that tainted meat products were being carefully inspected so as to not enter the export markets, but the tainted product was allowed to be sold to Canadians. This called into question both the quality of the product itself, and the government inspection process. This report looks at items which are hidden from investors view, and can similarly do harm to Canadians.

With the knowledge of 13 Provincial Securities Commissions who are responsible for protecting the public interest, these harms appear similarly negligent, to the failures of the meat inspection and regulation process. What if Canadians were consuming tainted investment advice, like some regulators allowed E-coli tainted meat into the system? This report demonstrates that the analogy is a valid one.
Page 3
A Voice for Small Investors

Seeking Truth and Justice
The "Advisor" Bait and Switch
There are 121,932 total registrants in Canada as of Sept 16, 2016 in the investment industry. 4,076 persons or 3% of that total are legally registered in the category of Adviser or Advising Representative.

Only four thousand and seventy six (4076) persons are registered in the category where a true fiduciary professional responsibility is legally required to be delivered to you as the investor.

"A fiduciary is an individual in whom another has placed the utmost trust and confidence in to manage and protect property or money. This person has an obligation to act for another's benefit. The duties of a fiduciary include loyalty and reasonable care of the assets within custody. All of the fiduciary's actions are performed for the advantage of the beneficiary."

Wait a minute, what about the other 117,856, you ask? They fall under the most common registration category and are called Dealing Representatives. What exactly does Dealing Representative mean? According to the Canadian Securities Administrators a "Dealing Representative is a sales person – what they can sell depends on the firm they work for and their registration."

In 1 minute 30 seconds this video shows how to search this for yourself at

That's right; the vast majority of investment registrants are just salespersons! These people are not legally required to place the interests of the investor ahead of those of their dealer. This is the bait and switch and the root cause of a great deal of harm being played out upon nearly every Canadian investor. The Dealing Representative legally acts as an agent of the dealer, and NOT firstly an agent of the investor. Client relationship rules currently allow this to be hidden from your view, and the investor is expected to be responsible for learning this information themselves. Many unfortunately learn the hard way.
On September 17th 2015 the Ontario Securities Commission released a report called "Mystery Shopping for Investment Advice" which uncovered a number of disturbing facts. One being that the shoppers encountered no fewer than 48 different business titles during the shops! Investors need better protection than a standard that permits registrants to choose their own business titles based on meeting minimal standards of accuracy and misrepresentation.

Dealing with a salesperson when you think you have a professional "adviser", is thus the epitome of a Buyer Beware relationship, despite new Client Relationship (CRM2) rules effected in 2016. Seven out of ten Canadians believe they are working with a financial expert with a legal obligation to look out for their best interests. SIPA – website: – e-mail:

Page 4
A Voice for Small Investors

Seeking Truth and Justice
How could so many Canadians be so misled? Sadly because this deception and word trickery is not what the investment industry promises the investor. They proclaim nearly everything but the need for their customers to be warned they are entering into a "buyer beware" relationship. See our previous report on deceptive advertising and you will understand why.

It is estimated that hundreds of billions of dollars are lost by Canadians over the past few decades during which this salesperson/broker/advisor/adviser ruse has taken place. (1988 to 2016)

This 1 min 40 second tutorial walks you through the CSA web site to give you the specific license or registration category your so called advisor holds, not what they purport to be with non-regulated marketing titles.

You should also be aware that it is not uncommon for industry representatives to have more than one designation. For example the representative may be registered as

 A "Portfolio Manager" with responsibility for managing accounts or operating a discretionary and has a fiduciary responsibility

 An "Advising Representative" qualified to give investment advice and has a fiduciary responsibility

 A "Dealing Representative" qualified to sell financial products but without fiduciary responsibility or responsibility to look after clients’ best interests.

This multiple registration enables your representative to "change hats" and work with you as a sales person without responsibility to look after your best interests even though he may be qualified as a Portfolio Manager or an Advising Representative. This is just one of the "dirty tricks" played by the industry to deceive investors.

Practically all professional investors have a fiduciary adviser, while 99% of retail investors, ordinary Canadians like you and I, are "switched" to commission salespersons wearing a false title and disguise. It is a simple two-tier investing system with legal protections for the professionals, and "slim-to-none", for the majority of Canadians. A fiduciary "Adviser" is legally obligated to place his or her skills to work in managing your money as best as can be professionally done. A non-fiduciary "Dealing Representative" (salesperson) can sell you anything that they deem "suitable", even if it is second, third, or fifth down the list of quality or efficiency. The "suitability obligation" is the equivalent of a used car dealer’s obligation. See this investor warning from the ASC on this topic. What’s in a name? Does the title of your investment professional matter?

Here is a link to a short video where Ex TD Bank CEO Ed Clark states that the culture of greed in banks allows for a business model that in essence says "my clients are really counter-parties that I can make money off "

 SIPA – website: – e-mail:

  Source -



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