SIPA submission to Secretary of State for Seniors

A joint submission by SIPA, the United Senior Citizens of Ontario and the National Pensioners and Senior Citizens Federation was deflected by the Minister's staff to the Minister of Finance.

Assuming the Ministers' staff are not on the investment industry's payroll, it must be assumed that they are not aware of the magnitude of the issue of seniors losing their savings due to systemic investment industry wrongdoing.

One has only to read the many articles in the media and/or review some of the disciplinary actions of the IDA, that reveal industry behaviour, to realize that many Canadians are being deprived of their savings by unsavoury practices by the investment industry.

The current regulatory regime is failing to protect retail investors from this wrongdoing.

Since many of the victims are seniors, we are attempting to make the Secretary of State for Seniors aware of this issue so that Government may be encouraged to take action to ensure that seniors are not financially abused.

The following is our submission:

July 19, 2007

Hon. Marjory LeBreton
Secretary of State for Seniors
The Senate of Canada, Ottawa, ON, K1A 0A4

In January this year we wrote to you stating that “Government has failed to recognize that a senior losing their savings due to inappropriate action and outright wrongdoing by the investment industry is a serious issue. The extent of these losses has been covered up for far too long. Most citizens and probably most Government employees and politicians are not fully aware of the magnitude of this problem.” A copy of the joint CCSI letter signed by the United Senior Citizens of Ontario, the National Pensioners and Senior Citizens Federation and the Small Investor Protection Association is appended.

Your staff responded saying they were directing our letter to Minister Flaherty for response. The Honourable James Flaherty is taking action regarding securities regulation in Canada and is trying to get support for a national securities regulator to replace the fractured and ineffectual provincial system now in place. A national regulator was recommended by the Wise Persons Committee in December 2003 in their report “It’s Time”, as did many others before them. Yet this intelligent move is resisted.

Meanwhile, seniors are being robbed of their savings by an investment industry that continues to develop products to create the illusion of safe investments to entice seniors, but in reality their purpose is to access the great pool of seniors’ wealth.

The current provincial regulatory regime is controlled by the investment industry and fails to protect investors. We continually hear about new financial fiascos that impoverish seniors at an alarming rate. That is why we wrote to you hoping you would champion the rights of seniors. They should be able to trust that a government regulated financial services industry would not be able to deprive them of their life savings and destroy their hopes for a comfortable retirement.

Victims are left with the only recourse being civil litigation and that right is being eroded by reduced limitation periods in many provinces.

An article by Jane Sims of Sun Media on July 18, 2007 entitled “Cheated investors tell tragic tales of losses” gives some small indication of the scope of human tragedy that is being created by a wayward industry that is not effectively regulated, which enables them to prey upon an unsuspecting trusting senior population. The article quotes only a few of the 200 victim impact statements filed in the court:

“She was an elderly pensioner who had $120,000 in savings earmarked for retirement and her children's inheritance. Before she died, she put her trust in the ___________ investments, believing they would care for her money and pay out generous interest. Instead, she lost it all. "I thank God that shortly after this investment my mother developed Alzheimer's (which) did not allow her to know what became of her life savings," the woman's daughter wrote in one of 200 victim impact statements filed to the court.”

“One man, who lost $400,000, including half the value of his home, had to return to work at age 72. Others spoke of sleepless nights, nervous breakdowns and illness since losing their savings.”

"I believe my first reactions were shock, disbelief and denial, followed by rage, resentment, guilt and then depression," one woman wrote.

"I don't know if I'll ever be able to retire," said one man who lost $803,699. "I feel I have been living in hell for the last few years."

Another man described how long it took to save the money and how quickly it was gone. "To know these people used our hard-earned money -- they even took money so far back as when I was 12 years old on a paper route.”The pain and hurt and always thinking of what was done to you just doesn't go away," he wrote.

One man said he and his wife were using the $2,000 interest paid out monthly on their ______ investment to make a special vaccine from his wife's blood to fight her leukemia. But soon the payments dried up and the investment was gone. "We tried for as long as our finances would allow . . . the treatment. It was impossible to keep up financially," he wrote. His wife has since died.

Others spoke of lost opportunities and dreams that will go unfulfilled.

Protecting seniors is not the Finance Minister’s responsibility and it should not be a provincial jurisdiction. All Canadians should have the right to be protected against harm.

Unfortunately, the protection of investors has been abdicated to the industry that is literally robbing seniors of their savings.

We are asking for your help.

Yours truly




Stan Buell, President

Cc Rt Hon. Stephen Harper, Prime Minister of Canada
Hon. James Flaherty, Minister of Finance
Hon. Robert Nicholson, Minister of Justice; Attorney General of Canada
Mrs. Marie Smith, President United Senior Citizens of Ontario
Mrs. Judith Muzzi, Past President United Senior Citizens of Ontario
Mr. Art Field, President National Pensioners and Senior Citizens Federation