In a very lengthy post, Angry in the Great White North looks at an ongoing court case the brings into question the role of the Ontario Securities Commission, the breadth of its powers, and how the Charter rights are at risk. The case involves Frank Dunn, the former CEO of Nortel, who is under investigation related to financial restatements. His legal team is arguing that an 18-year-old agreement with the American Securities and Exchange Commission has allowed a joint investigation to be mounted, the side effect being that the SEC can use the OSC to get around American constitutional constraints that would otherwise limit its ability to use evidence against Dunn in an American court. Interestingly, the OSC is more worried about the courts establishing a precedent that there ought to be oversight of the OSC than it is about losing Dunn.
Canadian Financial Stuff: Investing: And he’s an expert!
If you do not own Nortel,
then this is the time to start accumulating it.”
– Garth Turner November 27th 2000. So Garth Turner is a respected Canadian …
canajunfinances.blogspot.com
The OSC is more worried about?
Perhaps I am missing something, but it seems sensible that the SEC follow Canadian rules in Canada and US rules in the US. If the Canadian Charter allows greater powers of scrutiny than does the US Bill of Rights, what is the problem here?
Murray, you’ve hit on the problem. The SEC won’t be using American rules in the US. If the SEC were compelled to interview Dunn, or so Dunn’s lawyers argue, they would have to extend to him all the protections granted under the Fifth Amendment to the Constitution, as well as all the established precendents that flow from that. But by allowing a foreign agent to do the dirty work, ie, the OSC, the SEC will get its hands on testimony that if it had gathered itself, could not have been used in court. Under these circumstances, it can. The OSC counters that before the evidence can be handed over, Dunn can challenge it in court. Yes, but in a Canadian court, which is not interested in protecting Dunn’s rights under American law. Nevertheless, the OSC says, the SEC sees nothing until we get Dunn involved. Nonsense, says Dunn, you have the SEC lawyers as part of the investigative team. The moment the interview is over, the SEC will have the information. Even if I win the fight to keep the SEC from officially having the information, what keeps them from using what they’ve learned to develop other evidence? To which the OSC says…Hey, we’re the OSC!! We don’t have to explain ourselves to the likes of you!!
Or at least that’s what I see from the documents.
And remember, the OSC is planning to expand its powers over accountants. That means accountants can be made to hand over documentation beyond just audits to the OSC. And that means the information might flow to the SEC. No wasting time with warrants and subpoenas and crap like that.
On the accountants point, the PCAOB already has greater access to the documents of Canadian auditors of SEC registrants than any Canadian regulator.
With the obvious problems in the US in recent years re: corruption in the hedy heights of the corporate world, there is no way Canada can continue to escape this desire for the corporate wild west to be cleaned up. Else, stock markets will have no credibility anymore.
My read on PCAOB is that the courts still have an active role to play in protecting the rights of individuals. In Canada, the courts are frozen out.
Ma Bell: The same old, same old hateful monopoly: ffffing Canadians, again. Think Globe-Mail, CTV, etc. …-
BELL CANADA TO BECIME INCOME TRUST
BCE Inc. announced on Wednesday it would convert all of its Bell Canada assets into the country’s largest income trust, becoming the Bell Canada Income Fund.
Sigh…
It’s obvious just whose rights are protected to the hilt by the so called regulators and enforcers in such cases.
And it certainly isn’t the average investor who has been bilked out of his savings by investing in what now have become little more than flim flam operations masquerading as corporate blue chips.
Who the hell wants to invest in the market any more?