Wednesday, March 31, 2010

Norshield key personnel perhaps insane?

Scot Blythe has covered Norshield issues in the online magazine since trading of Olympus Funds was stopped and I'm certain long before that as well. His latest article summarizes the OSC findings brilliantly. Here are some highlights:
  • $472 million in total was invested into Norshield Asset Management.
  • The five year inquiry by RSM Richter will halve the money that can be recovered by investors.
  • The efforts by RSM have provided no further information into where money went in the Caribbean.
  • RSM Richter has launched a civil case against John Xanthoudakis & Dale Smith for $159 million.
  • RSM Richter has offered to cooperate should there be criminal proceedings.
One ironic closing statement is the following "Xanthoudakis & Smith argue that claims should be thrown out due to the length of time that has passed." It took them 10 years to lose the money, five years to investigate the fiasco they created, but a lifetime for their victims to toil and now suffer. What gall! Perhaps the two of them are insane?

Wednesday, March 10, 2010

OSC Finds Key Norshield Asset Management Personnel Misled Investors

After almost five years of investigation, the OSC has concluded that CEO John Xanthoudakis, President Dale Smith, and Chief Advisor Peter Kefalis misled investors while they lost $159 million dollars for 1900 retail investors in Canada.

This is really of no surprise to anyone. The real question is, will there be any criminal charges against these three crooks?

Other media that covered the story:

OSC finds wrongdoing in Norshield Hedge Fund Affair - Morningstar
Norshield trio breached security laws: OSC - Montreal Gazette
OSC rules Norshield hedge fund misled investors - Globe and Mail
Many questions remain unanswered in Norshield saga - Montreal Gazette
OSC finds wrongdoing in Norshield hedge-fund affair - Toronto Star
Affaire Norshield: une vaste tromperie, conclut la CVMO - la Presse - Montreal

Wednesday, March 3, 2010

Canada, world class Olympics, world class athletes. Investor protection: world class embarassment

Having been overwhelmed by the outstanding Vancouver 2010 Winter Olympics, we can see how capable Canadians are and how proud we can be of Canada. Turning to investor protection and the prosecution of white collar criminals reveals a secret that appears to be something that is not being addressed.

To begin, take some specific information presented on the Canadian Broadcasting Corporation (CBC), Sunday News show which aired November 23, 2008.

$700,528 salary and compensation for David Wilson, head of the OSC, 2007
2 the number of criminal prosecutions for securities fraud in Canada for 2002 - 2007
$158,500 salary and compensation for David Cox, head of the SEC, 2007
1,236 the number of criminal prosecutions for securities fraud in the US for 2002 - 2007
17x How much larger the average fine is for securities fraud in the US compared to the comparable fines levied in Canada
The numbers become even more embarassing to think that the SEC is responsible for 300 million Americans while the OSC isn't even responsible for 30 million Canadians. Furthermore, with a salary that is over 4 times that of his US counterpart, David Wilson remains at the helm of the OSC. I recall no outcry, no disgust, no media frenzy -- now we really know we are in Canada.

Looking now at what our criminals face, Earl Jones received a sentence for 11 years, but may be out in 2 years. The blatantly guilty Garth Drabinsky and his henchman Myron Gottlieb have spent something like 6 hours in jail thus far and it appears that it will be some time before will waste more taxpayer's money in an attempt to stay out of jail.

How do we remove these ugly examples of Canada's attitude towards these criminals and make Canadian's proud on the world stage in financial justice?