Alleged Quebec financial fraud - Montreal-area planner Earl Jones

Alleged Quebec financial fraud - Montreal-area planner Earl Jones
It is A CONSTANT in our global society today to read articles about FINANCIAL-PLANNERS AND FRAUD, these two seem to be somehow inseparable. In a recent investigation into one of Quebec’s investment brokerages, and the whereabouts of a broker, as much as $50 million that was entrusted to him seem to have disappeared into thin air. Peter Tzanetakis, vice-president of regulatory affairs at Advocis, the association representing financial advisers in Canada said "The financial advice industry is extremely regulated, financial advisers are typically licensed for insurance purposes and registered for securities and mutual fund purposes, but additional regulation for financial planning would not have any impact on someone who is intending to run a fraudulent scheme."
Please read my blog space:

http://corporategovernanceconcerns.blogspot.com/2008/07/dr-rookmin-maharaj-corporate-governance.html

and my article written in June 2008 about this very serious epidemic that is plaguing not only Canada, but is prevalent around the globe.

The only advise our regulatory bodies can offer include unhelpful remarks as follows:
1) there are plenty of strict guidelines in place already to keep them in check
2) it's a reminder clients need to ask hard questions and avoid blind trust, especially when their life savings are involved
3) The financial advice industry is extremely regulated; financial advisers are typically licensed for insurance purposes and registered for securities and mutual fund purposes
4) additional regulation for financial planning would not have any impact on someone who is intending to run a fraudulent scheme
5) Investors have learned through authorities that Jones, a self-proclaimed financial planner operating in an office tower in a Montreal suburb, was never licensed to handle their money
6) The Financial Planners Standards Council, a not-for-profit organization that raises awareness about financial planning and enforces professional standards through certification, says it's important for consumers to do their homework because anyone can call themselves a financial planner
7) The regulatory environment allows anyone to hold themselves out as a financial planner," said Tamara Smith, vice-president marketing. So it becomes incumbent on the consumer to verify credentials and ask to see certification and references, she said. "It is so important to find a planner you can engage in conversation, that you can trust
8) Sylvain Theberge (representing Quebec's securities regulator - the Autorite des marches financiers )said more inspectors may not be a foolproof solution. "We don't have the ability to be at every door in Montreal, to look at every office," Theberge said, adding more inspectors wouldn't necessarily have led them to Jones. "It's knowing the unknown," Theberge said. "In Mr. Jones' case, he worked for years and years on the basis of a confidence link from generation to generation."
SO WHAT ARE THE ROLES OF THESE SO CALLED REGULATORY BODIES (ABOVE), IF WE, AS EVERYDAY INVESTORS HAVE TO DO THE GROUND WORK FOR THESE SO CALLED REGULATORY BODIES?
REGULATORY BODIES OFFER NO REMEDIES for the average investors, this is a crying shame!
One year ago I wrote about this epidemic. Again, one year later I say the same thing:

It is imperative to note that this fraudulent, unethical behaviour is ALLOWED TO CONTINUE in our society by the pertinent ‘powers’ that be. This fraudulent, unethical behaviour affects families, individuals, and generations to come.
This fraudulent, unethical behaviour may also establish that failures within these companies' corporate cultures and management systems ARE ACTULAY allowed, if not encourage, by key individuals.
Dr. Maharaj argues that:
COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS/GIRLS CLUB may be the fundamental reason for the blatant disregard for humanity? COULD IT BE THAT THERE IS A perception of invincibility/groupthink mentality by these crooks.

COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?

And to date we have no remedies from the so called pertinent authorities, whether these watch dog bodies are for-profit or not-for-profit. They have been established to do a job, they are being compensated with some sort of financial consideration. Yet, whenever there is an investigation these ‘so called’ competent authorities’ throw the blame elsewhere. Their only advise to investors include:
“buyer beware” , they take no responsibility!
THE ONLY SOLUTION TO THESE BLATANT INJUDICIOUSNESS include:
changing the behaviours, the regulatory bodies must take responsibility and ensure that they conduct their monitoring duties. Perhaps, the reasons that this is not being done is that the regulatory bodies are not:1) the regulatory bodies are not ‘INDEPENDENT MINDED’
2) the regulatory bodies do not have the knowledge that is required to regulate
3) the regulatory bodies do not have the skills to regulate
This can be achieved by recruiting ‘new regulatory bodies’ in contrast to nominating ‘friends’ and continuing the tradition of the old boys/girls club.
Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that are hired to these regulatory bodies' What is your opinion? Does your opinion change with this update?


Dr. Rookmin Maharaj’s research on: Corporate Governance on organizations and investigates corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations and investigates informal characteristics of regulatory bodies, their knowledge, values, and groupthink mentality.
There are three main conclusions from this research and corporate experience:
1. Proves that formal rules and regulations are inadequate; they have little effect upon decision making.
2. Informal characteristics must be considered in unison with the formal system when incorporating any of these so called watch dog regulatory bodies
3. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking members’ and managements’ knowledge thereby, affecting these regulators decision making process.
4. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees. Changes to these regulatory bodies, are seminal in preventing future fiascoes.



Peter Tzanetakis, Advocis, Financial Planners Standards council, Sylvain Theberge , Corporate Governance , Quebec investment broker, Montreal-area planner Earl Jones