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Email this4:24 pm
June 12, 2020
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Interesting that Pace Credit Union could purchase Continental currency exchange just a month prior to winding up Pace Securities.
4:53 pm
May 19, 2020
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Interesting that Pace Credit Union could purchase Continental currency exchange just a month prior to winding up Pace Securities.
That is interesting.Wish there was someone who could put all the pieces to this puzzle together .thank you
5:20 pm
April 6, 2013
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Interesting that Pace Credit Union could purchase Continental currency exchange just a month prior to winding up Pace Securities.
PACE Credit Union is profitable. But, that doesn't mean all of its parts, like PACE Securities and PACE Financial, are.
Presumably, the new management of PACE Credit Union had a look at what the credit union was involved in and decided to rid itself of endeavours that weren't profitable and weren't really part of its mission.
As for PACE Securities, it's not like PACE Credit Union members couldn't find an investment dealer they could buy mutual funds, stocks, and other investments from.
10:10 am
June 17, 2020
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Re: Elaine's comment:
I hate being scammed.
How can someone walk into a credit union to buy a GIC and walk out 100 grand poorer-and then be told to hire a lawyer?
The more I see the sicker I get.
Only 300 members got conned so no biggie.
Not even worth calling to give them a heads up.
And they would not have called me anyways because even PACE had trouble finding my name.
Hi Elaine, the same thing happened to me but I called to get a GIC and was automatically connected to an "advisor" (I use that term loosely) and was duped into investing. I saw your name in the Globe and Mail article. How can I get a hold of you?
7:17 pm
May 19, 2020
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This news just came out: Enforcement Notice - Hearing - IIROC begins disciplinary action against PACE Securities Corp.'s former Chief Executive Officer and former Chief Compliance Officer
This better lead to a criminal investigation and charges.
9:47 pm
June 17, 2020
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Thanks sevenup for the information on the IIROC public hearing. I have already made a request to attend. If enough people attend, the authorities might pay attention to our situation and it might help our cause.
6:11 am
May 19, 2020
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Here’s another one in case you missed it:
6:14 am
April 6, 2013
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The Notice of Hearing and Statement of Allegations has detailed information about the PACE Financial and First Hamilton Holdings preference shares.
Looks like about $16 million of the PACE Financial preference shares and $30 million of the First Hamilton Holdings preference shares were sold:
17. The PFL [Pace Financial Ltd.] OM [Offering Memorandum] did not disclose the potential use of leverage or the potential use of options.
18. The PFL Preference Shares were offered at $10 each (subsequently there was a 2 for 1 split) and had a fixed term of 5 ½ years, with limited liquidity provisions. The PFL Preference Shares paid base dividends of 5% with an additional 2% bonus dividend payable at the discretion of PFL depending on performance. PFL paid a commission of 3% for sales of PFL Preference Shares that were deducted from the proceeds of the offering.
…
22. PSC [PACE Securities Corp.] sold approximately $16.3 million of PFL Preference Shares, including $10.7 million to PSC clients. PFL has not issued any additional PFL Preference Shares since May 2018.
34. The FHHI [First Hamilton Holdings Inc.] Preference Shares were offered as part of a unit priced at $10 per unit, with $9.50 allocated to each FHHI Preference Share and $0.50 allocated to a warrant. FHHI 7% Preference Shares paid base dividends of 7% and FHHI 5% Preference Shares paid base dividends of 5%. FHHI paid a commission of 10% for sales of the FHHI Preference Shares that was deducted from the proceeds of the offering.
…
37. As of June 2019, FHHI had sold approximately $29.8 million of FHHI Preference Shares, including $12.8 million to PSC clients. FHHI has not issued any additional FHHI Preference Shares since July 2019.
11:39 am
April 6, 2013
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Globe & Mail has a story today behind their paywall: IIROC alleges misconduct against former PACE executives
Most of the story repeats the IIROC allegations.
There is this odd statement from the former PACE Securities CEO:
Mr. Thomson [PACE Securities CEO] said the preference shares “were sold at the appropriate risk level,” and some of those clients “may have revised their investment preferences.”
It would be very interesting to see how he and the former PACE Securities compliance officer explain how those preference shares were "suitable" for some of the victims.
In contrast, the article noted the following, including a victim who was bamboozled into buying $200,000 of the preference shares:
The Globe has interviewed multiple investors who suffered deep losses on the preference shares. They described themselves as unsophisticated in finance, at or near retirement age and looking for a safe way to earn interest. Several said investment advisers at Pace Securities did not explain the risks to them.
“I told [my adviser] that I wanted no loss of principal. That was the goal,” said Mary Gratton, 71, who invested a total of $200,000 in preference shares in Pace Financial and First Hamilton. “People didn’t understand what they were signing.”
11:48 am
May 19, 2020
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Norman1 said
Globe & Mail has a story today behind their paywall: IIROC alleges misconduct against former PACE executivesMost of the story repeats the IIROC allegations.
There is this odd statement from the former PACE Securities CEO:
Mr. Thomson [PACE Securities CEO] said the preference shares “were sold at the appropriate risk level,” and some of those clients “may have revised their investment preferences.”
It would be very interesting to see how he and the former PACE Securities compliance officer explain how those preference shares were "suitable" for some of the victims.
In contrast, the article noted the following, including a victim who was bamboozled into buying $200,000 of the preference shares:
The Globe has interviewed multiple investors who suffered deep losses on the preference shares. They described themselves as unsophisticated in finance, at or near retirement age and looking for a safe way to earn interest. Several said investment advisers at Pace Securities did not explain the risks to them.
“I told [my adviser] that I wanted no loss of principal. That was the goal,” said Mary Gratton, 71, who invested a total of $200,000 in preference shares in Pace Financial and First Hamilton. “People didn’t understand what they were signing.”
I am really glad that more people are coming on board stating that they were not provided with the right info,.The Globe and Mail will be following this for a while and the price right now is a buck and a half a week so I have signed up.We have a quality paper with quality journalists following this and I am so grateful.Thank you Mary for speaking up and thank you Globe and Mail for continuing the reporting.
11:52 am
May 19, 2020
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And I need to add that Pace Credit Union should not be off the hook as many of these reckless deals were perpetrated on Pace premises where Pace ought to know their clients.Along with odd whisper that the tellers were actively encouraging their clients to purchase these shares.I wonder what the commission was?That's where the real dirt will be for me.
12:03 pm
May 28, 2020
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Have you looked at the E&Y pace securities as there is new listed on the documents regarding the wind up.
12:46 pm
May 19, 2020
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Take a look at page 6-8 paragraphs 27 - 30:
27)
c) PFL and FHH do not have sufficient funds to redeem or buy back the preference shares and warrants;
d) it is highly unlikely that a PFL or FHH shareholder may find an arm’s length buyer for their preference shares given both PFL and FHH are in liquidation; and
e) the preference shares are not insured against loss by either the Canada Deposit Insurance Corporation or the Canadian Investor Protection Fund.
.
.
29. In the case of FHH, on May 18, 2020, LBS took possession of the bonds in FHH’s account held as collateral against monies owed by FHH to LBS on margin. At the present time, it is unclear whether sufficient funds will be realized on the eventual sale of the bonds to repay LBS in full and generate a net surplus for distribution to the preferred shareholders of FHH, after the costs of liquidation. Based on the current circumstances, including the points noted in paragraph 27 above, it is reasonable to conclude at the present time that the net realizable value of FHH’s preferred shares is $nil.
30. PFL on the other hand does not have a margin loan. It holds bonds that either are restricted for sale in the U.S. to qualified institutional buyers or trade infrequently and at low volumes. Most of these bonds are high yield and high-risk speculative investments. As a result, while there may be a realization possible over time, these bonds would be difficult to immediately realize upon. Based on the foregoing, it is reasonable to conclude that the realizable value of PFL’s preference shares in an arm’s length transaction would presently approach $nil given the uncertainty as regards to the realization value of the bonds PFL holds and as described in paragraph 27 above, the difficulty a shareholder of PFL would face in finding an interested buyer.
. . .
So there's no insurance, no value to these PFL and FHH shares, no interested buyer for PFL bonds...I don't understand how are we supposed to get a recovery fund from this liquidation that is going to value our shares as nil??
Why is PSC not accountable financially to pay us back? How does Pace Credit Union get off the hook so easily when it is because of PCU we invested in this investment nightmare to begin with?
If you are a lawyer reading this, please private message one of us and help us start a lawsuit against PSC and PCU.
2:17 pm
May 15, 2020
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Yup - cannot see any other way to recover from these losses unless they can pull out a miracle with this fund that they are setting up, next letter and subsequent communications I'm sure will be the final tally per say for the valuation issue:
June X, 2020
To the Customers of Pace Securities Corp. Dear Sir/Madam:
This letter is to update you on the process that was authorized by the Ontario Superior Court of Justice on June 19, 2020 to facilitate the expedient transfer of all PSC customer accounts from Laurentian Bank Securities to other IIROC Dealer Members.
As mentioned in our letter dated May 22, 2020, Ernst & Young Inc. (“EY”) was appointed by Order of the Ontario Superior Court of Justice on May 14, 2020 to lead the wind-up activities of Pace Securities Corp. (“PSC”), Pace Financial Limited, and related entities. All of the customer accounts of PSC are held by Laurentian Bank Securities (“LBS”) as carrying broker for PSC.
Your PSC investment advisors have begun transferring their clients to other IIROC Dealer Members including Aligned Capital Partners Inc., CIBC Wood Gundy and Manulife Financial. They will be contacting you, if they haven’t already, about completing paperwork so that they can initiate the transfer of your account(s) to their new place of employment. If you intend to have your account(s) transferred to your investment advisor’s new place of employment, please complete the paperwork as soon as possible so that your account(s) can be transferred.
Accounts with Shares of Pace Financial Limited or First Hamilton Holdings Inc.
· Many PSC customer accounts contain as investments, among other things, private company preference shares or warrants of either Pace Financial Limited (“PFL”), First Hamilton Holdings Inc. (“FHH”), or both. If you own these investments, they will NOT be transferred as part of the transfer process.
· All of your PFL and/or FHH shares or warrants will be transferred out of your registered and non-registered accounts to EY, who will hold them on your behalf. EY is prepared to hold these securities on your behalf until the affairs of PFL and FHH are wound up. All other securities and cash in these accounts will be transferred into new accounts at your new broker dealer once those accounts have been opened.
· Please note that the preference shares and warrants of PFL and FHH in your accounts are registered in LBS’s name in trust for you.
o If you wish to have these certificates sent to you in their current form, please contact EY (see contact information below).
o If you would like to have the securities re-registered in your name, you will have to make your own arrangements for that to occur at your own expense.
o If you have physical certificates of PFL or FHH in your possession, you may continue to hold these certificates.
· Once the wind-ups of PFL and FHH are complete, PSC customers will be notified as to the redemption value of their PFL and FHH preference shares so that they can deal with any tax or other reporting.
Accounts That Do Not Contain PFL and/or FHH Shares or Warrants
· If your accounts DO NOT contain PFL or FHH preference shares or warrants, LBS will be
transferring your accounts to your new broker dealer once those accounts have been opened.
· If your account is a non-registered account (e.g. cash account, margin account, TFSA account, etc.) that contains only cash, then, unless you complete transfer paperwork with your advisor, LBS will be sending to you the cash balance from your account via cheque or EFT, and your account will be closed.
· All inactive PSC customer accounts (i.e. accounts containing no cash or securities) will be automatically closed.
If you have any questions, please contact EY at the contact information set out below:
Email: pace.securities@ca.ey.com Telephone: 1-855-943-7141
Fax: 416-943-3300
Website: http://www.ey.com/ca/pacesecurities
Yours very truly,
ERNST & YOUNG INC.
Solely in its capacity as Liquidator of Pace Securities Corp., Pace Financial Limited, Pace Insurance Brokers Limited and Pace General Partner Limited, and not in its personal capacity Per:
Jeffrey D. Kerbel, CPA, CA, CIRP, LIT Senior Vice-President
4:29 pm
June 17, 2020
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Re: Mr. Thomson [PACE Securities CEO] said the preference shares “were sold at the appropriate risk level,” and some of those clients “may have revised their investment preferences.”
This is an outright lie in my case. I have never invested in anything high risk over the last 30+ years. I have always been a conservative investor. I believe the risk level document the investment advisor had me place my signature on was changed after the fact. I did not noticed this until my husband pointed it out after this all blew up. I know what I originally told the Pace investment person I dealt with, and this was that I wanted something safe and secure because I was a few years away from retiring. I know what the document said when I signed it, and there is no way I would have agreed to anything that was rated as primarily a moderate risk, let alone high risk. Why would I all of a sudden change my investment preferences after decades of being conservation? It just was not the case.
4:41 pm
May 19, 2020
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Sheri said
Re: Mr. Thomson [PACE Securities CEO] said the preference shares “were sold at the appropriate risk level,” and some of those clients “may have revised their investment preferences.”This is an outright lie in my case. I have never invested in anything high risk over the last 30+ years. I have always been a conservative investor. I believe the risk level document the investment advisor had me place my signature on was changed after the fact. I did not noticed this until my husband pointed it out after this all blew up. I know what I originally told the Pace investment person I dealt with, and this was that I wanted something safe and secure because I was a few years away from retiring. I know what the document said when I signed it, and there is no way I would have agreed to anything that was rated as primarily a moderate risk, let alone high risk. Why would I all of a sudden change my investment preferences after decades of being conservation? It just was not the case.
I believe it, Sherri. This is a scam led by a con artist, all behind Pace credit union’s branding. Hard to believe that PCU had no idea what was going on?! Ya right.
What is the point of having regulatory bodies like IIROC, FSRA, and OSC if they aren't able to protect poor innocent investors such as a 63 year old former TTC worker with a disabled son from losing their life savings?
What prevents the next scam artist from making millions of dollars at the risk of a small fine and a short term suspension? Seems like we need stricter laws to prevent crimes like this from happening. Joseph Thomson committed fraud and we are now out of millions of dollars collectively. We need justice, he needs to be brought to trial. Pace Credit Union needs to pay us back what we have lost. They can’t get away easily, can get off the hook so fast.
5:06 pm
June 17, 2020
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Sevenup, I completely agree with you. How could the primary shareholder of PS and FHHs not have known about an IIROC investigation that was first launched in July 2018 (I actually read the long document IIROC issued about the investigation on Thompson and McRae and the future hearings). It does not add up. I did not invest until the following year (2019) so why wasn't there some safeguard in place to warn prospective clients like me, not to mention to inform those who already had been deceived? I would have never had anything to do with Pace Credit Union and by extension, Pace Securities had I known any of this. Also, I am sure there were plenty of complaints by some members who started to realize something was not right. Was anyone who was a member before the investigation was officially launched or in 2018 or 2019 told by the Credit Union about complaints and wrongdoing?
5:22 pm
May 19, 2020
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Sheri said
Sevenup, I completely agree with you. How could the primary shareholder of PS and FHHs not have known about an IIROC investigation that was first launched in July 2018 (I actually read the long document IIROC issued about the investigation on Thompson and McRae and the future hearings). It does not add up. I did not invest until the following year (2019) so why wasn't there some safeguard in place to warn prospective clients like me, not to mention to inform those who already had been deceived? I would have never had anything to do with Pace Credit Union and by extension, Pace Securities had I known any of this. Also, I am sure there were plenty of complaints by some members who started to realize something was not right. Was anyone who was a member before the investigation was officially launched or in 2018 or 2019 told by the Credit Union about complaints and wrongdoing?
We bought our PFL shares in December 2017. From then till the wind-up, we never got any notification, information, warning... nothing regarding any complaints or wrongdoings. Pace credit union knew what was going on and they kept it quiet.
9:22 pm
April 6, 2013
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Sheri said
…How could the primary shareholder of PS and FHHs not have known about an IIROC investigation that was first launched in July 2018 (I actually read the long document IIROC issued about the investigation on Thompson and McRae and the future hearings). It does not add up.…
There's no indication that IIROC ever contacted PACE Securities' primary shareholder, PACE Credit Union. Not sure IIROC even has an obligation to notify anyone else beside the entity being investigated:
9. In July 2018, IIROC Enforcement opened an investigation on the basis of a referral from IIROC Debt Market Surveillance.
10. In May 2019, IIROC Business Conduct Compliance raised concerns with PSC about the firm’s governance and ability to comply with certain IIROC requirements. Shortly thereafter, PSC undertook to cease distributing FHHI to clients.
9:56 pm
June 17, 2020
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I guess my question would be, why then was there any investigation launched not only in 2018, but also in May 2020? There is no way that Pace Credit Union could have been completely out if the loop. There must have been client complaints if an investigation was launched, not to mention the PS people were physically working in the same offices as the Credit Union, along side the Credit Union staff (who knows, maybe some staff were one in the same). Those same investment advisors had direct communication with McRae, the VP and Thompson.
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