- Your representative is not required to act in your best interest
- Keep a copy of your signed and dated account opening form on file- do not leave any blanks
- On account opening write down your objectives in plain words
- Keep notes of your meetings with your representative
- Check your transaction document(s) -report any anomalies immediately
- Read your account statement- report any anomalies immediately
- Get informed help when filing a complaint with the dealer
- All those providing personalized advice should practice under a fiduciary duty
- Regulators need to provide better protections for vulnerable investors
Friday, December 15, 2017
Taken For A Ride With A Dishonest Advisor by Harold C. Blanes
This case delineates the experiences of a Normandy veteran in his interactions with an investment dealer. He wanted safe GIC’s but ended up being sold expensive Segregated Funds with liquidity restrictions. All his attempts to get the issue resolved failed - the firm, regulators and police. A lot of lessons to be learned by reading this case summary.
Taken For A Ride With A Dishonest Advisor by Harold C. Blanes
I have been one of the seniors that has experienced misrepresentation by a group that think they have the privilege to take money from old people, no matter who it hurts.
In 2007, I had to transfer my wife’s and my retirement savings from one corrupt investment company to another. This first company refused to let me have GICs, even though that was what I had invested in for decades. The sales rep with this company took it upon himself to decide that GICs were “not suitable” telling me: “You can’t live with that.”
The second company was given the job of managing my funds only because they said that they could sell me GICs. They showed me a chart claiming 4% - so my wife and I said that if we could get them all insured, we will take
them. The dealer rep, “K”, said: “You can get them all insured in blocks of $100,000. K, my wife, and I worked out a plan that would work. Here is the plan: My wife Gladys and I would each take $100,000. We would then take $100,000 between us, and our son Alan would take $`100,000. Alan and I would take $14,000 that remained of the $414,000 that was to be transferred out of the previous company that refused to follow my request.
K said that she could do that for us, and would treat us honest like she treats her mother, with her investments. K expressed outrage that any company would do what our previous company had done – to take money under false pretenses out of an account and lock it in for a seven-year term – without my knowledge or consent. She said that her company considers this to be “highly unethical” to do to anyone in their eighties, and that her company would never “lock in someone’s savings” this way. She said this in front of my son Alan, who distinctly remembers her statement, as do I.
My wife and I were very anxious to get our money out that other company. The previous company was demonstrated to be corrupt, and we were able to prove it in court. Gladys was very sick with cancer and heart failure. My family and I were very worried about her. K could see the shape she was in, and K told her where to sign – holding her finger in places indicating where to sign – since Gladys was at that time, legally blind. She therefore had to rely on the honesty of the broker, who was anxious to get on with the transfer of funds out of the other company. K took another document out for me to sign, which I was told was for the setting up of the transfer of funds, but in the small print – I found out later, was to be an authorization to put money into segregated mutual funds. The dealer/rep never said anything about segregated mutual funds – and I had told her that Gladys and I were dead against any kind of mutual fund. K left my wife and I by telling us that she would go back to the office to get to work on transferring funds out of the old company. Before K left our house my wife and I both told her clearly that we wanted K to make sure that these funds are all in GICs. K said “That’s where they’ll be.” She said she would be back in a few days with the paperwork.
Gladys became very sick, and had to go to the hospital the next day. [Feb 2, 2007]. In about ten days, my appendix ruptured. I had to get to the hospital on or about Feb 12, 2007. Years later, we found out that while we were both in critical condition in the hospital, a “compliance officer” by the name of Dwayne Gryzbowski – we presume who was working out of the Winnipeg office of Investors Group Financial Services Inc., made up our “risk tolerance” as “high”, without Gladys or I knowing about it. We were both at extremely low points with our ailments. ?
Gladys and I had no risk with GICs when we had bought them years earlier at Royal Bank. K asked me on March 15, 2007, after I was released from hospital what was the length of time I wanted to keep GICs. My reply was that I would keep them in for two years. K accordingly then marked the 1-3 year check box on the “Time Horizon” section of the form I was filling out. K never gave me a copy of this contract and when I finally was able to get it, by court order, in 2014, my “Time Horizon” had been tampered with, and another check mark also appeared on the form for “3-6 years”. K. kept trying to convince me after I discovered that I had been put in what I had asked not to be put in – mutual funds – K kept telling me that “you wanted low risk not no risk”. My wife and I had wanted GICs that could not be manipulated by dealer churning, and other acts of unauthorized interference. We just wanted GICs and that was all. K promised us that, but never delivered.
Investors Group Financial Services Inc. appeared so desperate to manipulate our savings that they claimed that Gladys Blanes had asked that $19,000 be set aside for speculation to get the money that we lost with Canaccord back. This is the exact opposite of the kind of investor Gladys Blanes was. She had extreme COPD so any cause of stress made it impossible for her to breathe properly. She was completely against holding any speculative investment for that reason. It was only K who wanted to dabble in this speculation account. I was the one who signed the contract, and I know that there was no request to hold anything that was speculative. K made many mistakes and told so many untruths, even Tom McKichan from the investigations office had seen them and said in a memo to her that from now on she would have to be more careful. Yet a week later in January of 2010, he sided with the Sheila Vickery letter of August 17, 2009, which stated that there was no evidence of my ever having asked for GICs. This position is completely contradicted by the facts. Where is the credibility of that company? How can a company pretend that the request for GICs that was signed by me and the company on March 15, 2007 does not exist, or was not a direct, specific statement saying I am requesting GICs? Please see the comments of Canadian Fund Watch http://www.canadianfundwatch.com/2017/07/this-court-cases-teaches-investors-many.html
that shows what the LAW is supposed to demand in the verification of accounts when they are opened or modified. The fact that regulators are ignoring Judge Wallace’s ruling on what must happen for an investment account to be lawfully administered, shows that a training module for police and complaint takers must be created.
The statements made above are true and conform to the requirements of the Canada Evidence Act for meeting the test of being factual assertions. The request for GICs is contained in a document known as Documents INV00056-59.pdf, and the denial of this fact is seen in the letter from Sheila Vickery dated August 17, 2009 which claims that there is no evidence that I had ever asked Investors Group for GICs. The denial of the factual history, and to instead claim that I am of “failing memory” is dehumanization, and should not be indulged. The elderly need to be treated fairly and honestly.
Information contained herein is obtained from sources believed to be reliable, but the accuracy is not guaranteed. The purpose of this Document and others in the series is to educate investors by bringing together personal experiences from a variety of sources. It is not intended to provide legal, investment, accounting or tax advice and should not be relied upon in that regard. If legal or investment advice or other professional assistance is needed, the services of a professional should be obtained.