Buyer Beware

August 04, 2009

The latest news story of Earl Jones, President of an Investment Fund in Quebec, accused of swindling investors of millions of dollars, has become an all to familiar story.  South of the border we are in disbelief as we watch the story of Mr. Madoff who swindled investors out of 50 billion dollars over decades. How can this happen?  Is there no monitoring of the investment industry to protect the public?

In Canada, our financial institutions are strictly regulated and monitored.  Hence, the reason Canada was given such high praise by the international community during this world economic downturn.  The investment industry in Canada is not currently regulated by the federal government but by individual provinces.  Our government believes this is a problem for a couple of reasons.

First, there is no continuity in Canada of regulations nationally, making monitoring more challenging and compliance more complicated. Second, the scrutiny of investments that might compromise national security or the national interest is more difficult.  All provinces except for Quebec, are in agreement with our Minister of Finance, the Honourable Jim Flaherty, that we need a National Securities Regulator.  It is our hope that a National Securities Regulator will provide protection for the investor without being too cumbersome for the securities community.

Canadians that work hard over a life-time, with the hope that the few dollars they have saved for their retirement will make their retirement enjoyable, need to be protected from the greed of the few bad apples out there.  In this global economy the saying “buyer beware” just does not cut it anymore.  It is no longer our trusted neighbour, the person we know, handling our money.  Rather its people that live in ivory towers, who for the most part, are more concerned with their bonuses and BMWs than the well-being of the investor.

Good advice to all is to deal locally with people you know who have a long record of service to their clients and community.

Colin Mayes, MP
Okanagan-Shuswap