TORONTO, Nov. 30, 2012 /CNW/ - The Ombudsman for Banking Services and
Investments (OBSI) today announced the refusal of Macquarie Private
Wealth to compensate several retail investors in the amounts of $74,791
and $157,274 as recommended by OBSI after investigating the merits of
Macquarie Private Wealth is a Canadian investment dealer. At the time of
their complaint, Mr. and Ms. S were a married couple from Ottawa with
three teenage children getting ready to attend university in the coming
years (Mr. S has since passed away.) The other complainant, Ms. M, was
in her seventies, retired and living outside of Halifax. Their advisors
placed some or all of their portfolios in investments that were
unsuitable given their personal and financial circumstances, investment
objectives and/or risk tolerance.
The investment dealer that is the subject of the two complaints at issue
here has changed names and ownership over the years. During the time
period when the investors suffered their losses due to unsuitable
investments, the investment dealer was known as Blackmont Capital
Corporation and was owned by another financial company. In 2009, the
Macquarie Group bought Blackmont and subsequently renamed it Macquarie
Private Wealth. Throughout the relevant time period, the investment
dealer remained the same and the responsibility to compensate the
customers rests with the investment dealer; merely the name changed.
When Macquarie Group acquired the dealer, the existing obligations of
the dealer remained unchanged.
Macquarie Private Wealth has stated that its vendor of the business
agreed to indemnify it regarding the complaints but has declined to
fund the settlements recommended by OBSI. In OBSI's view, Macquarie
Private Wealth remains responsible for the advisors' unsuitable
recommendations that led to the complainants' unsuitable investment
portfolios while they were clients of the investment dealer. Macquarie
Private Wealth has chosen not to pay to the complainants the amounts
OBSI concludes they are owed based on the facts of each case.
OBSI's recommended compensation amounts in these two complaints were
arrived at by first calculating the difference between the amount the
investors' accounts should have been worth had they been suitably
invested and the actual value as of the date they removed their
investments from the investment dealer. Interest was then added to
compensate the investors for the loss of use of their money, calculated
from the date they first complained to the firm.
At the direction of securities regulators, OBSI established a one-time
method of independent review of certain cases that were headed towards
refusals to compensate. Both of these Macquarie Private Wealth
complaints were among them. Firms were offered the opportunity to have
credible and experienced former commissioners of the Ontario Securities
Commission (OSC) provide an independent assessment of the files in
question based on standards consistent with OBSI's Terms of Reference.
If OBSI had unfairly considered the facts of the case or our
investigation findings were objectively flawed, the reviewer would say
so in their report on the matter. Macquarie Private Wealth chose not to
take up this offer.
A copy of OBSI's investigation report for both Mr. and Ms. S's complaint and Ms. M's complaint is available on OBSI's website. Some names and personal information
have been edited from the original version to protect the identity of
certain individuals involved, including the complainants.
Where a complaint is found to have merit, OBSI makes a recommendation
for compensation where it would be fair to do so, taking into account
all of the facts and circumstances of the case. Refusals by firms to
follow an OBSI recommendation to compensate mean that OBSI must
publicize that refusal and the details of the complaint under Section
27 of OBSI's Terms of Reference. OBSI has taken several significant and extraordinary steps to resolve this and certain other complaints that could not be resolved
before resorting to announcing a refusal to compensate.
OBSI is Canada's national independent dispute resolution service for
consumers and small businesses with a complaint they can't resolve with
their banking services or investment firm. As a free alternative to the
legal system, we work informally and confidentially to find fair
outcomes to disputes about banking and investment products and
services. Over 99.8% of the thousands of complaints brought to OBSI
since the organization's inception have been successfully resolved.
OBSI looks into complaints about most banking and investment matters
including: debit and credit cards; mortgages; stocks, mutual funds,
income trusts, bonds and GICs; loans and credit; fraud; investment
advice; unauthorized trading; fees and rates; transaction errors;
misrepresentation; and accounts sent to collections. Where a complaint
has merit, OBSI may recommend compensation up to a maximum of $350,000.
SOURCE: Ombudsman for Banking Services and Investments (OBSI)
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