Thursday, February 8, 2007
Lawyers for the Investment Dealers Association of Canada have sent a letter to investor advocate Robert Kyle asking him to remove confidential information from his website about investment advisers who have been the subject of customer complaints.
Mr. Kyle obtained the information from the IDA's website, where it had been inadvertently published, and copied it onto his "investor voice" website. He said yesterday he believes investors have a right to know which stock brokers have been the subject of numerous public complaints.
"I don't think it should be kept confidential," he said, noting similar information is provided to the public in the United States.
Mr. Kyle found the information while looking at slides prepared for a 2005 public presentation by IDA senior vice-president Paul Bourque. When Mr. Kyle double-clicked on one of the slides showing statistics about public complaints, a spread sheet opened listing the names of almost 3,000 brokers who had been the subject of complaints, internal disciplinary actions or lawsuits between October, 2002, and June, 2005.
The IDA found out about Mr. Kyle's discovery last week and removed the data from its website. In the letter sent to Mr. Kyle yesterday, the IDA's lawyers said he should not have had access to the information and should not have published it.
"In our view, you knew or ought to have known that the information was confidential and you certainly know now that it is not to be further publicized," the letter said.
Mr. Kyle said yesterday he will not remove the information until he speaks to his lawyer. But he questioned whether the IDA has any legal status to prevent him from publishing the names.
Jeff Kehoe, IDA director of enforcement litigation, said yesterday he could not discuss the IDA's legal options in the matter, but warned "anybody can launch a suit in court in Ontario."
The data published by Mr. Kyle came from the IDA's ComSet system, which is a private website used by all IDA member firms to record customer complaints if they relate to IDA disciplinary topics.
Mr. Kehoe said when the IDA created ComSet, it decided to only publicize cases in which it launches a disciplinary hearing because customer complaints may not bear out upon investigation. He added the ComSet data simply lists a broker's name and the number of complaints received, but doesn't provide any details about the nature of the complaint. As such, he said, it doesn't give the public any context to assess the matters.
Mr. Kyle said he believes Canadian investors are sophisticated enough to understand the complaints may not be proven valid upon investigation. But he believes investors should know about the brokers who have been the subject of numerous complaints.
Mr. Kyle has had a history of conflict with the IDA, which accused him of failing to co-operate with an investigation in 1998 when he was the CEO of a small firm called Derivative Services Inc.