All investors should have received the following correspondence from RSM Richter.
TO THE CREDITORS OF OLYMPUS UNITED FUNDS CORPORATION "OUFC"
Time for another insult to victims of the Norshield disaster. After over six-years of investigations and reports comes a pathetic offer from RSM Richter (and Stikeman Elliot, lawyers representing investors). They have negotiated a settlement with KPMG, who were the auditors of Norshield, to obtain $7.5 million dollars. KPMG is admitting no wrong-doing, but will give $7.5 million - as a donation?
Of course, there is a catch.
If the investors (we are creditors too) accept this deal, then there must be a "full release" of
KPMG and parties related thereto (what does that even mean?). It certainly does mean that KPMG, the auditors whose responsibility it was to confirm that Norshield's claims were correct and accurate, can not be made accountable and can not be sued. In other words, the
Class Action Lawsuit can not identify KPMG or Olympus (Norshield) as responsible. It was KPMG that was supposed to confirm Norshield was not lying. How can KPMG not be responsible?
If you accept the RSM offer, no legal fault can be directed at KPMG.
Just to make it painfully clear, remember that all fund companies (including Norshield) provide their own fund values to investors; these are the Net Asset Value numbers or NAVs we see on statements. It tells us how much each unit we bought is worth. Because the fund companies themselves provide these assessments, it is crucial that someone check to make sure they haven't made a mistake. Perhaps it would be wise to make sure the fund companies are not lying and have not simply made up the valuation numbers. This is why auditors are required to go into all public companies yearly. The purpose is to make investors (the general public) comfortable that experts have reviewed the claims of a company because investors are not accounting experts or financial experts. The
audited financial statement from a major organization such as KPMG is the
seal of approval for investors to be comfortable and confident.
At this time, the only thing I'm comfortable and confident of is that KPMG was irresponsible and incompetent in auditing Norshield. KPMG clearly did not do what they were supposed to do. For almost 15 years, there may have been practices carried out at Norshield that allowed them to cheat, steal and lie. After all, Norshield did make almost $500 million dollars disappear. As the Ontario Securities Commission stated,
"the NAVs were artificially inflated". In other words, Norshield completely lied about how much investments were worth. KPMG conducted their yearly audits and happily told the
world that all was well at Norshield; Norshield was following accepted practices for honest financial accounting according to GAAP (Generally Accepted Accounting Principles that all audit firms follow) and the public could rest assured that they were getting honest financial information from Norshield.
By accepting the proposal that RSM Richter has sent out and by accepting the $7.5 million settlement,
investors can not continue any class action suits naming KPMG or OUFC. Remember that $7.5 million is less than 5% of the money individuals invested into Norshield (assuming that $159 million is the correct total -
16th Receiver's report, page 6, paragraph 17). Be aware that the $7.5 million is for
all creditors: this includes unpaid suppliers, employees owed salaries or vacation pay, and any other company or person owed money.
You would receive much less than 5 cents for each dollar you invested or are owed.
Is a
Class Action Lawsuit likely to get any money at all? No one knows for certain. You will soon have a chance to make your opinion heard.
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