Why the OSC so rarely gets its man

[Bylo Selhi]

First of a series of investigative reports by The Star: Why the OSC so rarely gets its man [my bold]

More than 450 employees work at the Ontario Securities Commission. About 40% are paid more than $100,000 a year. Their dismal track record begs the question: What on earth are they doing?...

Academics, lawyers and forensic accountants interviewed for this story say accountability is sorely lacking when it comes to securities enforcement, whether it’s regulatory matters overseen by the OSC or violations of criminal law overseen by police. They also cite a lack of focus, and the sense of urgency that makes enforcement an effective deterrent to breaking the rules. The decades-old Mascan case, they say, illustrates much of what’s wrong with the system.

More recently, many believe the OSC and Canadian authorities dropped the ball on their investigation of Conrad Black, who will be sentenced later this month in Chicago after a speedy U.S. trial. “For me, the hardest part about the Conrad Black trial has been explaining why it happened in Chicago and not in Toronto,” former Ontario premier Bob Rae wrote recently in his blog.

All this is no surprise to Utpal Bhattacharya, a finance professor at the Indiana University’s Kelley School of Business and author of a report comparing the enforcement records of the OSC and the U.S. Securities and Exchange Commission (SEC). “We found the enforcement in Ontario was pathetic,” said Bhattacharya. “Canada is a first-world country with second-world capital markets and third-world enforcement.”...

Barbara Stymiest, chief operating officer at Royal Bank of Canada and former CEO of the Toronto Stock Exchange, called Canada’s securities enforcement an “international embarrassment.”...

[bubbalouie]

More than 450 employees work at the Ontario Securities Commission. About 40% are paid more than $100,000 a year.

According to my calculations, that means there are over 180 people getting $100,000/year. Unbelievable.

My favorite anecdote about the OSC is how Loblaws tried to rip us (taxpayers) off of the GST last year to the order of $40 million but they just had to pay it back....no criminal convictions required.

[Bylo Selhi]

According to my calculations, that means there are over 180 people getting $100,000/year. Unbelievable.

Pope John XXIII (IIRC) was once asked by a reporter, "How many people work at the Vatican?" His response, "About half of them." That's probably a higher percentage than at the OSC and they're paid a lot less to do it.

My favorite anecdote about the OSC is how Loblaws tried to rip us (taxpayers) off of the GST last year to the order of $40 million but they just had to pay it back....no criminal convictions required.

What's the GST got to do with the OSC?

[bubbalouie]

What's the GST got to do with the OSC?

it showed up in the income statement (i mean it didn't)

[lystgl]

Didn't the head of the OSC just this week say that Canadians weren't interested in long sentences for securities violators / crooks? That, unlike the Americans, we didn't see the "sense" in that?
That's the perverted (bought and paid for) mindset investors in this country are up against because you can bet your last dollar he didn't ask you or me what we thought about that.

[Money101]

In his book, The Naked Investor, John Reynolds refers to a “highly respected academic” who described the OSC as “probably the most poorly governed securities regulator among those of the OECD… countries.”

[Bylo Selhi]

Why white-collar crime team fizzled

[Royal Group Technologies Ltd.] was the first operation of IMET – the Integrated Market Enforcement Team – set up 14 months earlier to tackle white collar crime in Canada... Yet after four years of operation, only five charges have been laid – one in Vancouver and four in Toronto. In the Vancouver case, broker Kevin Steele was jailed six years for bilking investors out of $10.3 million. The four Toronto cases – accounting fraud, stock market manipulation, theft and fraud over $5,000 – are still working their way through the courts. IMET's investigation into Royal Group is continuing. To date, no charges have been filed.

Today when the enforcement team makes the news, it's usually because of its dismal track record. Instead of reaping glory, the vaunted police squad is becoming a public whipping boy in the debate about Canada's perceived tendency to let white-collar crime go unpunished.

Even the man in charge admits to shortcomings. "There's a lot of stakeholders unhappy and I think justifiably so," said John Sliter, the head of IMET in Ottawa. But he's quick to deflect blame: "Yes, justice is taking a long time, but I don't want to put the full responsibility for that on [IMET's] shoulders. In that sense, it's the Canadian system."

[Bylo Selhi]

If you thought his predecessor was an ineffective, vacuous, "old boy" putting in time at a cushy job then don't waste your time reading this: OSC chief takes it all in stride

OTOH the person who should head the OSC (or a national regulator): An insider speaks out

To me, it demonstrates we take this very lightly. We've spent $120 million (on the Integrated Market Enforcement Team) and have nothing to show for it. The crime in all of this is our legislators. The legislators should pass laws that make it easier to convict people who steal from investors... We have people who steal from investors and nothing happens...

We've sued a few corporations, Nortel being one of them, in the U. S. Why? Because our lawyers say it doesn't make sense to waste our time in Canada. I don't make this up. Our lawyers essentially tell us, you want to have a chance of winning and getting something done? Go to the U.S...

[lystgl]

Is there anything left to say?


http://www.globeinvestor.com/servlet/st ... 8/GIStory/

Long jail terms won't cut it here, OSC says
Watchdog's head of enforcement says Canadians aren't looking for the kind of sentences routinely handed down in U.S.

JANET MCFARLAND

00:00 EST Wednesday, November 28, 2007

TORONTO -- Canadian investors do not want to see white-collar criminals sentenced to the same lengthy jail terms as American courts are imposing in securities crime cases, the head of enforcement at the Ontario Securities Commission said yesterday.

Michael Watson told the commission's annual Dialogue with the OSC conference yesterday that some people have argued Canadians need to see more people led away in handcuffs for lengthy jail terms.

"It's not going to happen here; it's just not part of the Canadian justice system and Canadians aren't looking for that," he said during a panel discussion on enforcement.

[WishingWealth]

Michael Watson:

'Canadian investors do not want to see white-collar criminals sentenced to the same lengthy jail terms as American courts are imposing in securities crime cases, the head of enforcement at the Ontario Securities Commission said yesterday.'
IOW, I'm a leech on the system, I have a cozy job and I don't want to make one single wave.

Another blatant case of "the Canadians" want this or that without asking 'the Canadians"

And not even red in the face when he pockets his salary of I would assume a couple of hundred thousand$.

I think I'll start answering all my phone calls in case it's a pollster on the line asking what I feel about it.

Shame on this guy.

WW

[blonde]

Is there anything left to say?

Does Money talk?

BTW, trust me, believe me.

[steves]

OK Blonde.

Time to come clean... are you happy/supportive of these white collar criminals getting away with fraud by virtue of lax laws and ineffective OSC, BCSC, policing?

Please... no Blonde-type cutesy aphorisms... just a simple yes/no.

[blonde]

Another blatant case of "the Canadians" want this or that without asking 'the Canadians

"

er, ah, "the Canadians" (most 90%ers and all wannabees) are getting exactly what THEY want. Nothing more and nothing less. They LUV to pay tax and the processes are designed to sock-it-to-'em. These same, "the Canadians", are provided with an answer by the politician and then the work begins on formulating the question/s.

as an aside...stay tuned to the KS 'show'...live on tv...a public view funded by public money showing the process steps on 'HOW' the work gets done in the Justice System. How much WASTE is built-in the processes? What is THE 'law'? How can the 'law' be broken when there is no 'law'? Mega WASTE = Mega Hand-Wringing.

Unlike most 90%ers and ALL wannabees, 10%ers set the rules to the 'GAME'...ALL the Rules to the Real-GAME. Such is life...get used to it...a Natural Law is the Real-Law.

It is ALL about MONEY...MEGA MONEY...and THAT is a good thing.

BTW, trust me, believe me.

[lystgl]

OK Blonde.

Time to come clean... are you happy/supportive of these white collar criminals getting away with fraud by virtue of lax laws and ineffective OSC, BCSC, policing?

Please... no Blonde-type cutesy aphorisms... just a simple yes/no.

So, what exactly did he say steves?
I confess, I understood non of it - not a word of it.(':?')

[chiaroscuro]

Money talks...or it wants silence. Where is Steve Harp in all this? Doesn't he hate cheats?

[Bylo Selhi]

Doesn't he hate cheats?

Only if they're in the Opposition

Fraud squad lacking credibility

The RCMP must make fighting stock market fraud a priority and overhaul the way it investigates these complex cases if it hopes to improve its track record on catching white-collar criminals, according to a report released yesterday.

The much-anticipated report comes from Nick Le Pan, a special adviser appointed by the federal government to get to the bottom of the troubles at the force's Integrated Market Enforcement Teams. The teams, created in Vancouver, Calgary, Montreal and Toronto in 2003, were meant to crack down on high-profile stock market frauds and accounting scandals.

But, as Le Pan noted, the elite teams became bogged down by bureaucracy, staff turnover, lack of leadership and low morale.

Added:
New approach needed to fight securities fraud: Le Pan
Securities crime squad hindered by leadership, laws: Le Pan

Duncan backs OSC review

The best way to fix the Ontario Securities Commission is to replace it with a national regulator, says Finance Minister Dwight Duncan... With a national regulator unlikely in the near future, Attorney General Chris Bentley pledged to "immediately see whether there are additional steps that we need to consider taking to strengthen the investigative and prosecutorial capacity."...

Bob Runciman, the Progressive Conservative MPP for Leeds-Grenville, noted his party has long been working toward a national regulator to improve protections for investors.

But Michael Prue, the New Democrat who represents Beaches-East York, said the government should, in the short-term, follow an all-party legislative committee's recommendations to separate the securities commission's "investigative functions from its adjudicative functions." That, Prue said, would at least improve enforcement.

IOW don't hold your breath.

[Money101]

Please... no Blonde-type cutesy aphorisms... just a simple yes/no.

Good luck! LOL

[Money101]

er, ah, "the Canadians" (most 90%ers and all wannabees) are getting exactly what THEY want. Nothing more and nothing less. They LUV to pay tax and the processes are designed to sock-it-to-'em. These same, "the Canadians", are provided with an answer by the politician and then the work begins on formulating the question/s.

90% of Canadians would disagree with you

[worthy]

I would assume a couple of hundred thousand$.

Actually, $524,000 last year.

But, compared to his private sector earnings as Vice-Chair at ScotiaBank, this is really just an honorarium. No sense getting oneself all in a lather in this last stop before the endless directorships, golfing and charity.

The story's lede involving the 23 year old "current" case the OSC is pursuing says all you ever need to know about the OSC.

As to emulating the US system, which may well elevate the thug Rudy Giuliani to the Presidency, that alone is enough to condemn it entirely.

[lystgl]

As to emulating the US system, which may well elevate the thug Rudy Giuliani to the Presidency, that alone is enough to condemn it entirely.

I was under the impression that "thug" put the teflon Don in jail for life (literally) cleaned up Times Square and made the subways "rideable" again. Any other politicians you know actually done anything (as) substantial?

[Bylo Selhi]

Without leadership, enforcers become enablers

Here's my favourite bit from Nick Le Pan's report on Enhancing Integrated Market Enforcement Teams, released on Monday. "In meeting with persons involved in capital markets enforcement in the U.S. and those in Canada ... I am struck by very significant differences in tone and the assertiveness of approach."

Le Pan, the former federal superintendent of financial institutions, offers a nod to those who critique the U.S. smackdown of white-collar criminals as overly zealous, and in no way recommends an emulation of an American-style justice system. But – and this is a big but in my view – Le Pan posits this: "I do believe that more of that tone of results focus, and assertiveness, is essential in Canada in order to get the results that most Canadians want."...

[worthy]

Gotti. Gotta to give him that. All a one-man effort, of course.

The reduction in crime that the bullying thug Giulliani takes credit for was a nationwide US trend that had more to do with demographics than anything else. NYC crime was already on a three year downtrend.

What most endeared Giulliani to the majority population was his relentless empowerment of roving gangs of NYC cops who stopped, hassled, frisked, arrested, tortured, 1 2 and shot dead *minorities.

As attorney Alton Maddox said two decades ago, "The criminal justice system in New York State will deal with you more harshly if you kill a dog than a black man."

Just as 9-11 suddenly cast a dithering unpopular president as a "hero", the equally floundering Rudy became the "hero" of 9-11 for what? Attending hundreds of funerals ? Just don't ask the NYC firefighters, on whose hundreds of dead bodies Rudy walked, to cheer. They hate him for his scandalous decision to leave them with rotten equipment that was the target for years of scathing assessments and accusations of bidding favouritism.

The most telling assessment of Rudy's judgement: the appointment of his thuggish police driver, Bernard Kerik, as Police Commissioner. When Rudy left office to reap millions as a "security consultant", Kerik went along as his business partner. When Rudy attempted to foist him on the White House as Director of Homeland Security, the Administration's background check quickly ruled this shady thug out of the running.

At the moment, Rudy's crony and pal is facing 16 felony charges, including fraud, tax evasion, obstruction, filing a false loan application, and making an assortment of false statements when applying for various federal posts, including Homeland Security secretary.

(And I haven't even mentioned his TV theatrics in the persecution of Michael Miliken and other hapless white collar non-criminals.)

Yeah, cheers for Rudy, the devious thug now most likely to get the Republican nomination for the Presidency. Pandering to ignorance and tribal prejudice is the key to democratic success.

[AltaRed]

Worthy, I gather Giulliani is not high on your list for president then? Should America be blessed with any of the R candidates? The issue, as I see it, is that America needs a strong leader more than ever (as opposed to the current front man being manipulated from behind)?

[Dennis]

AltaRed.....with worthy it would be the "least detestable" of course

[lystgl]

(And I haven't even mentioned his TV theatrics in the persecution of Michael Miliken and other hapless white collar non-criminals.)

worthy you're not angling for a job with the OSC are you?(':lol:') Seems Mr. Miliken went to jail for a couple of years for his "non-crime" but then that's the U.S. Wouldn't have happened here. And Miliken described as "hapless"? Isn't he, and his millions, still living on some island in the Caribbean?
I'll agree that Kerik was a lapse in judgment but what kind of a man doesn't stick by his friends?