Investors Scrutinizing the Regulators

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RCMP pass Thow's file to the Crown
Enforcement chief also frustrated by the amount of time he's worked on the case

Andrew A. Duffy

Friday, October 26, 2007

Inspector George Pemberton is not immune to frustration. As the officer in charge of the Vancouver division of the RCMP's Integrated Market Enforcement Team, Pemberton may have temporarily cleared his desk of the Ian Thow file, but he knows that act has done nothing to solve the unit's problems.

The Thow file, overflowing with documents and diagrams showing the money trails left behind after the former Berkshire investment adviser bolted to the U.S., has been cluttering IMET's desks for nearly two years.

Just recently, the file was finally passed to the Crown for case review and charge assessment. Thow's former clients and creditors claim he owes them in excess of $32 million.

The investigation took a long time, devoured police time and resources and left Thow's victims, the B.C. Securities Commission and IMET feeling frustrated.

"IMET has had its challenges and we recognize there are some areas in which we need to do better," said Pemberton. "People want to see results faster and we need to deliver that."

While Thow's victims have complained about the time it was taking to see action and the BCSC's executive director recently told the Times Colonist the program was not working, the BCSC's director of enforcement did express some sympathy for Pemberton's team.

"I have some sympathy for people working there. They are asked to do a very difficult job with inadequate tools, especially in a complex situation like what Thow represented," said Lang Evans.

Simply put, IMET's process takes longer because it does not have the power the regulators do. IMET cannot compel people to testify or get quick access to records and banking documents.

"The ability to compel witnesses would be a huge step forward. We've had countless examples of cases that have been delayed months and months because of witnesses refusing to talk to us," said Pemberton.

Getting access to records and documents is no easier.

IMET's American counterparts, the FBI, can often get an order from a grand jury to obtain records within a week, while the RCMP needs judicial authorization.

"That can take weeks and weeks or longer to compile the necessary grounds," he said.

"It's a universal frustration for all police and not just white-collar crime. You see the impact on victims, know there's things that could help them and you don't have that power. That is frustrating."

In terms of what can be done to improve the situation, Pemberton said there are some minor legislative changes that could speed up the process, but he pointed out under the Charter of Rights and Freedoms, there is a limit to the extent regulators and police can work together.

He said IMET also needs more resources, noting his team has just 15 investigators.

That means they can only handle so many cases which is why not all white-collar crime gets to their level.

"We're at the narrow part of the funnel where there are those few cases that are so egregious they demand more than a regulatory response, where there needs to be an effective criminal deterrent," he said.

Which brings him back to Thow, who is set to appear in a Seattle bankruptcy court on Monday.

"Our involvement there will not end until his prosecution is completed. We have to devote resources to assist the Crown until the day a jury comes back," he said.


Ian Thow takes flight