Thursday, Apr 10, 2008
OTTAWA — The breakdown in the $32-billion asset backed commercial paper system amounted to criminal fraud that no-one in Canada appears prepared to investigate or prosecute, a House of Commons committee was told Thursday.
"It's a free ride in Canada for financial crime," said Larry Elford, a former Alberta financial adviser who now heads an investment advocacy group.
"The law simply does not apply to the financial industry."
In the first public hearing on the financial markets crisis that unfolded from the U.S. subprime meltdown last summer, the House finance committee heard horror stories from three independent investors unwittingly caught up in the secretive, arcane world of high finance.
One investor, Wynne Miles, 58, who described herself as self-employed and with no pension, had placed her life savings in what she supposed were government treasury bills, only to find out in July they had been transferred into non-bank ABCP without her knowledge.
And retired Alberta farmer Murray Candlish told a similar story about how his $350,000 in savings was invested in a Triple-A rated trust he was assured was as secure as the Canadian banking system.
"Now our dreams are slowly disappearing as the value of our investment erodes," Candlish told the committee.
Some of the witnesses cautiously welcomed a proposed "relief plan" by Canaccord Capital Inc. (TSX:CCI) to repurchase up to $138 million of the debt held by 1,430 of its individual clients holding less than $1 million in the investment.
But Miles said she would not vote in favour of the plan if it meant she will lose the ability to sue, a requirement in all the proposals for resolving the issue.