IDA discipline fettered further

[Norbert Schlenker]

SROs that find wrongdoing on the part of registrants levy penalties. It has long been the case that, if the person is no longer a registrant, that the penalty could not be collected. As a result, when the IDA e.g. claims diligence because it levied record fines in a year, the truth is rather more nuanced if anyone asks how much was actually collected.

Today's news is that, at least in Saskatchewan, the IDA has no authority to even chase former registrants.

http://www.sfsc.gov.sk.ca/ssc/files/dec ... feb-06.pdf

[brucecohen]

On Jan 7 I posted to the Amazing but True thread that, according to Advisor's Edge Report, only one-third of the fines levied on individuals by the IDA are ever collected.

[blonde]

I know what I would really like to post...but...

'Buyer Beware' is for real. The consequence/s are directed toward dealing with 'effects' and that way it appears action is firm, fair and cycle time is short.

We are in the Global Economy and there is no going back.

The Global Economy is providing 'opportunity'...'mega opportunity'...and it is there for the taking. Those who have will have more...and they deserve every bit and a bit more.

Money = Power.

Money + Power = ????

[dakota]

Money + Power = ????

A 10%er?

[Bylo Selhi]

Dishonest dealers unlikely to pay fines

Earlier this week, I reported that the Mutual Fund Dealers Association had fined former Vancouver mutual fund salesman Ravi Puri $500,000, plus $10,000 in costs, for failing to deal with his clients honestly and in good faith. Those are impressive-sounding numbers, but I don't think the association has a hope in hell of collecting any of it.

In its annual report for the year ending June 30, 2006, the association listed 10 enforcement cases that resulted in substantial financial penalties. Earl Crackower was fined $3.5 million; Glen Murray Greyeyes $225,000; Joseph Van Der Velden $500,000 and partner Andrew Stockman $75,000; Robin Andersen $200,000; Stephan Headly $150,000; Scott Andrew Stevens $61,000; Ernest Ming Chung Lo $35,000; Shawn Sandink $35,000; and Donald Coleman $10,000. In most cases, costs were also assessed. That's a lot of money, but not a single cent was collected. (The only utility of unpaid fines that I can see is that people who don't pay them cannot continue in, or be re-admitted to, the securities industry until the fines are cleared.)

From December 2004 (when the MFDA began taking enforcement actions) to June 30, 2006, the association assessed $8.45 million in fines, but collected only $2.65 million, all of which came from a single member, Investors Group, to settle a market-timing case. During the same period, the association assessed $131,500 in costs, but collected only $50,000. Once again, all of that money came from Investors Group as part of the same market-timing settlement. Thank God for Investors Group, otherwise the MFDA would have batted zero.

The MFDA has not yet released its report for its most recent fiscal year, but an official told me it assessed $1.49 million in fines and collected just $141,500, or three per cent. Similarly, it assessed $67,000 in costs but collected just $9,500. That's peanuts considering the association has 175 member firms, 75,000 individual registrants, $276 billion in assets under administration, and Lord knows how many clients.

The problem is that the MFDA, like the Investment Dealers Association, has no statutory power (except in Alberta) to pursue miscreants after they leave the industry. (In Alberta, legislation enables the MFDA and IDA to register fines as court judgments). The MFDA are IDA are similarly constrained when it comes to subpoena powers. As it now stands, they can't force individuals or firms to attend interviews or produce documents and records (except in Alberta).

This doesn't make sense: Provincial securities commissions have given the MFDA and IDA the authority to license firms and individuals, and rely on them to police their members and protect the public. It follows they should be given the powers they need to do the job.

[Jo Anne]

...an official told me it assessed $1.49 million in fines and collected just $141,500, or three per cent.

<nitpick>

It's 9.5%.

</nitpick>

[beaverlodge]

MFDA - a $15 million dollar a year bureaucracy.

Anybody want to bell the cat.

You would not even know where to start