GOVERNMENT MUST ACT!

On January 26, 2004, the following e-mail was sent to Prime Minister Martin:

Dear Prime Minister

The investment industry, the regulators, and the government have failed the small investor.
Small investors have placed their trust in the industry and that trust has been betrayed. Many small investors have lost all of their life savings. They have also lost their hope for the future and their trust in our society.

Is Canada no longer a just society?

There are fundamental issues that have not been acted upon. There have been numerous studies, task forces and reports. Yet investor protection is lacking.

The Industry Canada sponsored 1998 Stromberg Report “Investment Funds in Canada and Consumer Protection” identified issues and proposed solutions. Industry and regulators failed to act.

The Wise Persons Committee Report of December 2003 “It’s Time” reviews securities regulation and strongly recommends action. IT IS TIME for government to act because industry and regulators have failed to respond. Canadians need investor protection. The present regulatory system fails to protect the small investor.

An article in the New York Post January 25th, 2004 has captured the situation in the United States and this applies equally to Canada:
Spitzer's great concern, he said, is the fundamental effectiveness of how Wall Street polices itself for the benefit of investors.
"The major failure has been at the SRO (self-regulatory organization) level," Spitzer told The Post.
"Whether you are talking about research or mutual funds or specialists, there has been a failure to properly question behavior that they know about before anyone else. Everyone of those issues was understood by the industry and not responded to."
Spitzer, 43, a graduate of Princeton University and Harvard Law School, where he was editor of the Law review, sees the solution in leadership.
"I don't pretend to have any answers beyond the platitudinous observation that those who are in charge of the SROs have to be willing to rock the boat and have to be willing to play the role of prosecutor or the system will fail," he said.

This is a message our leaders in Canada need to hear.