Investment Industry Cover-up, Gag Orders & Threats

Although some of our regulatory leaders say they believe in transparency, nothing is being done about the industry practice of covering up widespread wrongdoing and then settling with plaintiffs by paying pennies on the dollar and covering up with gag orders.

The industry also gags registered representatives from speaking out with the threat of expulsion, not just from their jobs but the industry. Most either stay and remain silent or quietly change careers. The few that speak out are ostracized and persecuted with lawsuits and Anton Pillar orders.

Kent Shirley attempted to speak out but was slapped with an Anton Pillar order preventing him from speaking out and the confiscation of his computer. The issue remains unresolved. Joe Killoran has picked up the torch from Kent Shirley and now faces legal action. Stephen Gadsden was convinced to take down his open letter to Canadians. Jonathan Chevreau's article was not published.

The media also seems to be muffled by industry. The Bre-X stifling is an excellent example; the Toronto papers did not print a word of the case in Ottawa, and the Ottawa press was strangely silent the second day. Scam of the century became secret of the century.

The industry approach of intimidation and threats is illustrated by the ASC's firing of one of those who came forward to tell the truth. The ASC has called them cowardly for acting anonymously and then demonstrates what will happen if they are identified.

We need TruthTeller legislation to protect the many who will come forward. As long as we allow the industry to continue to cover-up with lack of disclosure, gag orders and threats to employees, small investors will remain at risk and it really is an "Investor Beware" situation, as Robert Goldin so aptly named his book published six years ago.

It is time for an Inquiry Commission into widespread industry wrongdoing, industry cover-up, and regulatory failure to provide investor protection. That is why SIPA is calling for an inquiry in our submission to the Senate Standing Committee on Banking Trade and Commerce

The allegations by 35 members of the Alberta Securities Commission staff suggest that industry corruption may even permeate the regulators