Have you heard a Margaret’s Story?

“The main reason I considered investing in 1989 was because retirement was just seven years down the road. I had raised my children as a single parent and was reminded that I needed to have enough money to provide a reasonable lifestyle for my 'golden years'. I had worked for 40 years at that time.

I approached a large brokerage firm. Mutual funds were being promoted and at that time the banks were not involved in the investment industry.

My first investment was $10,000.00.

Over the next seven years I invested further monies as funds became available. I saw my investments as an extension of my 'bank - savings account'; and that monies were safe and secure, and of course would grow. On the advice of my broker, I also transferred my RRIF account from my local bank to the brokerage firm.

During this time period I saw my investment advisor only three times. He would call me on the phone three of four times a year. I felt my money was in good hands and certainly under the roof of a reputable organization. I certainly had nothing to fear.

In 1995, I contacted the broker with the purpose of discussing the purchase of a condominium. I was renting accommodation and felt it would be advantageous to buy a property that would at least carry for what I was paying in rent. My rent had increased that year 7.6%. I told the broker that I had $100,000.00 as a down payment. He dissuaded me from buying, and added that I had insufficient funds to carry the mortgage.

I took his advice, that 'I would do better by giving the money to him to invest and that it would grow and "we would make money”'! Today, I would hear this response very differently. I decided to start saving earnestly. I was now working part-time, so I had to sacrifice certain projects, like traveling to England to see family, who sadly have since died.

In 1996, the year I retired, on the advice of an elderly friend, I approached a mutual fund advisor of another investment company. I was eligible to investment money in my RRIF account and decided that maybe it was time to create 'another basket' so to speak. The advisor asked me to bring in my current monthly statement so that she could see how to best invest my money. Whilst reviewing the document she asked permission to make a copy so she could review the contents with her manager. We made arrangements to meet later on that week.

The outcome of our meeting was shocking. The month and year I retired was the month and year that my account was at -104% leverage!!! In other words my account had been 'wiped out'! After a visit to my home and a brief audit by this new advisor, it was discovered that my investment had been set up as a 'leverage account'; and that during 1995-1999, 1.4 million dollars of investments had been turned over in my investment and RRIF accounts.

I had signed nothing. Even after I discovered what had happened and sent a letter to the broker stating that nothing was to be done in my accounts without my knowledge or signature, monies were still turned over to the tune of $85,000.00! The broker had made at least $60,000.00 in commission!

Who had supervised these transactions; but further more, who had provided the transitionary signature for these investments and other leveraged investments - some 150 in total!

The branch manager was contacted and confessed that something was wrong with my account and said that 'things could be changed'!

I wrote to the Ontario Securities commission who forwarded my complaint and evidence on to the compliance department of the brokerage firm. That was 1999.

It is now 2004, and five years have passed. With legal fees and loss of interest, apart from what the monies invested would be worth today had they been suitably invested, my total losses amount to $325,000.00. The compliance department has made an offer of 20% of the losses. It appears that they are unwilling to investigate the behaviour of the broker or supervisor.

In the meantime the broker has been disciplined - for the second time; and the IDA is investigating at least two other brokers, in the same branch. It appears that I am not 'being heard'.

On a personal level - tempus fugit - time is passing. My apartment is on the second floor of a small building and there is no elevator, my reason for purchasing alternate accommodation was legitimate, I drive a car that is 17 years old. Although it has served me well, it too is aging!

I am totally disgusted with the way I have been treated by the brokerage firm in question; and am sorry to say that as I have shared my story with others, I have been further shocked to find that I am not alone.

I am now with my 'fourth lawyer'. The first one created a conflict of interest, the second one placed me on the 'backburner' for five months, and the third one failed to read my mail and did nothing for two and a half years!

So not only do I have to deal with the investment arena, but my experiences have caused me to question the behaviour of 'the legal beagles’!

My message to those 'out there'. I am not going away. I will see this 'project' through to the end and it will be resolved to my satisfaction. There are those in the industry that need to be exposed and made to put right what was done wrong. The alternative is that we will all pay a heavy price.

We are very much aware of what has happened to Enron and other large corporations. It just doesn't pay to lie and cheat. Didn't these guys learn anything in 'Sunday school'! Or maybe their parents did not insist that they return 'that candy bar' that they stole, as they were leaving the drug store. A philosophy eventually develops that if you don't get caught, it's O.K. or 'that is the way it is done'.

Sad to say, even as I am writing this, the broker in question is being allowed to do what he has been doing the last 18 years; and that is, abuse investors and use their money to make money for himself!”

Margaret – Jan 2004

NOTE: Margaret is a pseudonym to protect the individual's identity