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Email this10:25 pm
April 6, 2013
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There were no client complaints for the 2018 IIROC investigation. It was opened on "the basis of a referral from IIROC Debt Market Surveillance."
IIROC Debt Market Surveillance monitors fixed income trades for unusual activity. I suspect they noticed that PACE Securities was buying a large amount of junk bonds.
9:56 am
April 6, 2013
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Elaine said
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.
The PACE Credit Union's legal liability is not going to be as easy as that.
PACE Securities is a separate company. By default, shareholders of PACE Securities, like PACE Credit Union, are not on the hook for any of PACE Securities' liabilities, including any liabilities and fines for inappropriate selling of those preference shares. That's standard corporate law. Sharing a location is not enough to change that.
According to the IIROC statement of allegations, PACE Financial paid a 3% commission on its preference shares. First Hamilton Holdings paid a 10% commission on its preference shares:
18. The PFL [Pace Financial Ltd.] Preference Shares were offered at $10 each (subsequently there was a 2 for 1 split) and had a fixed term of 5½ years, with limited liquidity provisions. … PFL paid a commission of 3% for sales of PFL Preference Shares that were deducted from the proceeds of the offering.
34. The FHHI [First Hamilton Holdings Inc.] Preference Shares were offered as part of a unit priced at $10 per unit,… FHHI paid a commission of 10% for sales of the FHHI Preference Shares that was deducted from the proceeds of the offering.
The commission is usually shared in some way (not always 50/50) between the person doing the selling and his/her employer.
That "deducted from the proceeds of the offering" means that the commission was paid from the investor's money. Someone investing $100,000 in PACE Financial preference shares with a 3% commission would end up paying $3,000 to the salesperson and their employer. The investor would end up with $100,000/$5 = 20,000 preference shares that are worth ($100,000 - $3,000)/20,000 =$4.85 each.
10:13 am
May 19, 2020
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Norman1 said
Elaine said
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.The PACE Credit Union's legal liability is not going to be as easy as that.
PACE Securities is a separate company. By default, shareholders of PACE Securities, like PACE Credit Union, are not on the hook for any of PACE Securities' liabilities, including any liabilities and fines for inappropriate selling of those preference shares. That's standard corporate law. Sharing a location is not enough to change that.
According to the IIROC statement of allegations, PACE Financial paid a 3% commission on its preference shares. First Hamilton Holdings paid a 10% commission on its preference shares:
18. The PFL [Pace Financial Ltd.] Preference Shares were offered at $10 each (subsequently there was a 2 for 1 split) and had a fixed term of 5½ years, with limited liquidity provisions. … PFL paid a commission of 3% for sales of PFL Preference Shares that were deducted from the proceeds of the offering.
34. The FHHI [First Hamilton Holdings Inc.] Preference Shares were offered as part of a unit priced at $10 per unit,… FHHI paid a commission of 10% for sales of the FHHI Preference Shares that was deducted from the proceeds of the offering.
The commission is usually shared in some way (not always 50/50) between the person doing the selling and his/her employer.
it's not just a location that they were sharing. Pace Credit Union employee sold us the Pace Securities investment.
10:23 am
April 6, 2013
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sevenup said
it's not just a location that they were sharing. Pace Credit Union employee sold us the Pace Securities investment.
If it was a PACE Credit Union employee, acting on behalf of PACE Credit Union, who sold you the preference shares, then it could be different.
However, if the person was also a PACE Securities agent and acted as a representative of PACE Securities for the sale, then the PACE Credit Union liability is not as clear.
10:29 am
May 19, 2020
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Norman1 said
sevenup said
it's not just a location that they were sharing. Pace Credit Union employee sold us the Pace Securities investment.
If it was a PACE Credit Union employee, acting on behalf of PACE Credit Union, who sold you the preference shares, then it could be different.
However, if the person was also a PACE Securities agent and acted as a representative of PACE Securities for the sale, then the PACE Credit Union liability is not as clear.
He told us he was an employee of Pace Credit Union at that time. Email signature said PCU. I verified with IIROC that he was NOT a Pace Securities agent at that time, he become one after. That is why, FSRA had the jurisdiction over PCU at the time of our purchase. I'm pretty sure our advisor wasn't the only one that was an employee of Pace Credit Union when they purchased.
11:12 am
April 6, 2013
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sevenup said
He told us he was an employee of Pace Credit Union at that time. Email signature said PCU. I verified with IIROC that he was NOT a Pace Securities agent at that time, he become one after. That is why, FSRA had the jurisdiction over PCU at the time of our purchase. I'm pretty sure our advisor wasn't the only one that was an employee of Pace Credit Union when they purchased.
Check the risk acknowlegment form that you signed. For exempt market securities, like private shares, you would have signed a form that is a version of this draft Form 45-106F4 – Risk Acknowledgement Form. Does your risk acknowledgement form contain this statement?
The person selling me these securities is not registered with a securities regulatory authority or regulator and has no duty to tell me whether this investment is suitable for me.
From the different stories, there seems to be a mix of situations.
Yaftica's preference shares seem to be in a TFSA account with PACE Securities. There were PACE Securities account statements showing the shares. An online account web site too! So, a PACE Securities agent was involved in that case.
In contrast, Elaine doesn't seem to have a PACE Securities account opened for her. No regular PACE Securities account statements showing her shares. It looks like her PACE Financial preference shares were registered directly in her name, taking PACE Securities and PACE Credit Union completely out of the loop! The dividends from her preference shares are direct deposited to one of her PACE Credit Union bank accounts.
11:25 am
May 15, 2020
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The PACE Credit Union's legal liability is not going to be as easy as that.
PACE Securities is a separate company. By default, shareholders of PACE Securities, like PACE Credit Union, are not on the hook for any of PACE Securities' liabilities, including any liabilities and fines for inappropriate selling of those preference shares. That's standard corporate law. Sharing a location is not enough to change that.
Appreciate what you're saying & I get that, Corporate Law 101 I guess. And for obvious reasons this is precisely why they set up this 'sister' organization to reduce their liability should there be a point of failure. But of course a Class Action of this size isn't going to necessarily hinge on that completely. If you fail to protect your brand, it will most certainly lose its value, and any client or business owner knows that a brand with a low value is perceived to be cheap, unreliable, without trust etc. Would you allow another business to use your brand identity such as your logo on a subpar product, or services? without considering the implications that customers will eventually associate that product to you? As a shareholder in that company, a stock holder, investor whatever - I may ask what the hell you were thinking after the company valuation takes a serious plummet through the courts of public opinion after whatever disaster your sister company may have prescribed for you.
If they wish to go down that route the implications for such are well documented and as a Risk Manager, Accountant, Lawyer, whoever - you'd be damned off base if you didn't present those risks as part of the decision making process on how to move forward from emerging underneath something like this. Making light from the PR perspective on how controlling authorities within the company may have screwed the organization somewhat so this is what we have to do now to correct it, and ensure we don't suffer any such losses again (which are internal not to the client base) hasn't been a monumental task for them to date.
Explaining away how something under your nose, within your house, that you organized and presented to clients on a silver platter of sorts under the brand umbrella, well we're within a different realm on that perspective now, controlling the public narrative while keeping the brand shiny and the bottom line stable ( its still a corporation which has to make money on their holdings there's a business to run presumably forever ), won't be as simple should this go forth in another direction. Just my humble opinion.
12:28 pm
May 19, 2020
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Norman1 said
sevenup said
He told us he was an employee of Pace Credit Union at that time. Email signature said PCU. I verified with IIROC that he was NOT a Pace Securities agent at that time, he become one after. That is why, FSRA had the jurisdiction over PCU at the time of our purchase. I'm pretty sure our advisor wasn't the only one that was an employee of Pace Credit Union when they purchased.
Check the risk acknowlegment form that you signed. For exempt market securities, like private shares, you would have signed a form that is a version of this draft Form 45-106F4 – Risk Acknowledgement Form. Does your risk acknowledgement form contain this statement?
The person selling me these securities is not registered with a securities regulatory authority or regulator and has no duty to tell me whether this investment is suitable for me.
From the different stories, there seems to be a mix of situations.
Yaftica's preference shares seem to be in a TFSA account with PACE Securities. There were PACE Securities account statements showing the shares. An online account web site too! So, a PACE Securities agent was involved in that case.
In contrast, Elaine doesn't seem to have a PACE Securities account opened for her. No regular PACE Securities account statements showing her shares. It looks like her PACE Financial preference shares were registered directly in her name, taking PACE Securities and PACE Credit Union completely out of the loop! The dividends from her preference shares are direct deposited to one of her PACE Credit Union bank accounts.
I have an unsigned purchase agreement (no signed copy was given to us) issued by Pace Financial Limited Corp. There is only one line in the entire agreement that lists PSC as the "parent corporation". I do see the exempt stuff in there, but also things that didn't apply to us, like the "accredited investor's" part:
ACCREDITED INVESTOR
Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.
Nope, not us. The salesperson/con artist/skilled advisor, whatever you want to call him, told us to "initial" and said "this is just standard stuff, it doesn't mean anything", while repeatedly assuring "this is a low risk investment, don't worry about what it says about high risk stuff".
Of course, you say, he can say this because of the "exempt market" part that we signed. I am sure a judge will likely disagree.
2:13 pm
May 19, 2020
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Here is a question I am hoping some of the old timers will know how to find out.
I am wondering whether Pace Credit Union kept their GIC rates artificially low to lure people to the securities side of their operation.Remember-one big family.
I am asking because at All Trans I was getting 3.15% n a 5 year GIC but at the meeting when All Trans agreed to be devoured by Pace the rates they posted be abysmally low.I even asked my branch manager Brenda about that and she said my stuff was not due for a while.
So I am wondering whether there was some type of collusion going on in the family.At this point it is a I wonder.I don't know.
I know the rates were 3.51% when I got my GIC last year.
Is there any way to look up what the investments that Pace CREDIT Union had for their clients?
4:54 pm
April 6, 2013
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Elaine said
Here is a question I am hoping some of the old timers will know how to find out.
I am wondering whether Pace Credit Union kept their GIC rates artificially low to lure people to the securities side of their operation.Remember-one big family.
I am asking because at All Trans I was getting 3.15% n a 5 year GIC but at the meeting when All Trans agreed to be devoured by Pace the rates they posted be abysmally low.I even asked my branch manager Brenda about that and she said my stuff was not due for a while.
So I am wondering whether there was some type of collusion going on in the family.…
PACE Credit Union is not one of the GIC rate leaders that this site keeps rate history about.
When was that meeting? Perhaps, we could have a look at what the 5-year GIC rates were then at other deposit takers.
5:13 pm
April 6, 2013
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sevenup said
I have an unsigned purchase agreement (no signed copy was given to us) issued by Pace Financial Limited Corp. There is only one line in the entire agreement that lists PSC as the "parent corporation". I do see the exempt stuff in there, but also things that didn't apply to us, like the "accredited investor's" part:
ACCREDITED INVESTOR
Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.Nope, not us. The salesperson/con artist/skilled advisor, whatever you want to call him, told us to "initial" and said "this is just standard stuff, it doesn't mean anything", while repeatedly assuring "this is a low risk investment, don't worry about what it says about high risk stuff".
Of course, you say, he can say this because of the "exempt market" part that we signed. I am sure a judge will likely disagree.
One doesn't need to be an "accredited investor" these days to invest in the exempt market. There are four classes of investors now allowed:
- Eligible investor
- Accredited investor
- Family, friends and business associates
- Non-eligible investor
An investor will need to declare his or her investor class on something like these two schedules.
Are you saying that you initialed the schedules as an accredited investor?
5:19 pm
May 19, 2020
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Norman1 said
sevenup said
I have an unsigned purchase agreement (no signed copy was given to us) issued by Pace Financial Limited Corp. There is only one line in the entire agreement that lists PSC as the "parent corporation". I do see the exempt stuff in there, but also things that didn't apply to us, like the "accredited investor's" part:
ACCREDITED INVESTOR
Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.Nope, not us. The salesperson/con artist/skilled advisor, whatever you want to call him, told us to "initial" and said "this is just standard stuff, it doesn't mean anything", while repeatedly assuring "this is a low risk investment, don't worry about what it says about high risk stuff".
Of course, you say, he can say this because of the "exempt market" part that we signed. I am sure a judge will likely disagree.
One doesn't need to be an "accredited investor" these days to invest in the exempt market. There are four classes of investors now allowed:
- Eligible investor
- Accredited investor
- Family, friends and business associates
- Non-eligible investor
An investor will need to declare his or her investor class on something like these two schedules.
Are you saying that you initialed the schedules as an accredited investor?
Yes. And we are not one. He told us to initial and we did. He maintained "this is just standard stuff, doesn't mean anything".
5:25 pm
May 19, 2020
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Norman1 said
Elaine said
Here is a question I am hoping some of the old timers will know how to find out.
I am wondering whether Pace Credit Union kept their GIC rates artificially low to lure people to the securities side of their operation.Remember-one big family.
I am asking because at All Trans I was getting 3.15% n a 5 year GIC but at the meeting when All Trans agreed to be devoured by Pace the rates they posted be abysmally low.I even asked my branch manager Brenda about that and she said my stuff was not due for a while.
So I am wondering whether there was some type of collusion going on in the family.…PACE Credit Union is not one of the GIC rate leaders that this site keeps rate history about.
When was that meeting? Perhaps, we could have a look at what the 5-year GIC rates were then at other deposit takers.
The internet says Oct 13, 2016
Yes that would be interesting.Maybe the Pace people monitoring the site can give us the rates from Pace at that time and through 2018
6:05 pm
May 15, 2020
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Check the risk acknowlegment form that you signed. For exempt market securities, like private shares, you would have signed a form that is a version of this draft Form 45-106F4 – Risk Acknowledgement Form. Does your risk acknowledgement form contain this statement?
The person selling me these securities is not registered with a securities regulatory authority or regulator and has no duty to tell me whether this investment is suitable for me.
From the different stories, there seems to be a mix of situations.
Yaftica's preference shares seem to be in a TFSA account with PACE Securities. There were PACE Securities account statements showing the shares. An online account web site too! So, a PACE Securities agent was involved in that case.
Hell no. Not even close. Nothing of that nature, that is fairly direct and to the point something tells me if any of us were read a riot act like that form reads even with my limited knowledge, as checked off on my paperwork initially, I'd have been savvy enough to understand after reading those few sentences 'not good'.
So no - I didn't get anything like that, I transferred my TFSA into PS Ltd. in early 2019 via a screen shot from my Cell Phone with the account information on it, the broker took care of the rest with my explicit instruction to put the funds into other forms of mutual funds as I have been familiar with that kind of investment. All the funds did go there because I received paperwork on the deposit from Fidelity Mutual, and I can see the transaction from my account history online. However - a few months later I could see that a large portion of my holdings were transferred into these (what I now understand to be) preferred shares, I didn't authorize such a transaction to take place obviously and I'm certain yes that the initial transfer didn't include anything with those intentions.
I truly believe that I was scammed here by a rogue individual who moved my funds into harms way to score a quick commission, which may have been the same motivation others fell victim too as well because it seems the profile of the investor chosen here is one that doesn't quite have their finger on the pulse.
That's my case in a nutshell. When they took a dive in the fall and I noticed it online I questioned it immediately but received some lip service on that for which I am guilty again of not understanding. By the time the Spring of 2019 rolled around obviously my subsequent calls and emails went unanswered for which we know why at this point.
Mine may be something which becomes a police matter eventually but I am very busy with life at the moment and normalizing the shock my family sees me dealing with so - there will be action in due time.
6:24 pm
October 6, 2018
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Both the Credit Union executives and the Securities executives, approved and trained all staff to promote and explain these products. Given all of us were told the same thing essentially(from what I've read), it’s fair to assume all branch staff who promoted the pace product were all told specific points on how to explain the products. And if we all were told conservative or medium, then clearly that's what Joseph Thomson (CEO) or the credit union executive team trained them on. If everyone was told the same thing, then clearly the staff were given talking points. Yet, if they turn out to be actually high risk, that in and of itself, proves Pace's liability. If they wrongly determined their risk rating from the get-go, as one can infer from the article, then there's liabilty. You can't market a product (life-size posters) in the branches of customers, train staff on how to actively promote the in-house product, enjoy the gains of the investment products on your balance sheet, and then when things go sour - be absolved of any liability. I was in the product almost 3 years, and received the quarterly dividends, so for them to be able to pay the dividends for so long they clearly had to be profitable. I think there's more to this whole situation, and this will all unravel very soon.
9:41 pm
June 17, 2020
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sevenup said
ACCREDITED INVESTOR
Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.Nope, not us. The salesperson/con artist/skilled advisor, whatever you want to call him, told us to "initial" and said "this is just standard stuff, it doesn't mean anything", while repeatedly assuring "this is a low risk investment, don't worry about what it says about high risk stuff".
I was told to sign the acknowledgment of risk document also and when I asked him why I would have to sign it if the “product” was a safe investment, and he said, “this is just standard stuff; it’s a common document that you can easily find it on the internet”; in other words it’s just a formality, you don’t have to worry about this. I did not even get to read it because he was the one handling papers. He moved on from this page pretty quickly without as much as a caution or acknowledgement of the possibility I could lose some or all of my money. Not once!
9:42 pm
April 6, 2013
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Elaine said
The internet says Oct 13, 2016
Yes that would be interesting.Maybe the Pace people monitoring the site can give us the rates from Pace at that time and through 2018
This web site only has GIC history back to September 2018. 
From some old newsletters, around October 21, 2016, Oaken Financial was offering 2½% on 5-year GIC's.
A year later, around October 20, 2017, Meridian Credit Union was offering 2.9% on 5-year GIC's, through deposit agents, for minimum $10,000.
10:04 pm
April 6, 2013
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Norman1 said
Are you saying that you initialed the schedules as an accredited investor?
sevenup said
Yes. And we are not one. He told us to initial and we did. He maintained "this is just standard stuff, doesn't mean anything".
Signing a declaration that one is an accredited investor places one in the same investor class as someone like Warren Buffet.
An accredited investor does not require suitability advice. Such an investor has the financial means to obtain and pay for independent advice on the investment, if desired. That's why the $1 million in net cash and securities, $200,000+ net annual personal income, $300,000+ net annual family income, and $5+ million family net worth qualifiers are mentioned.
Consequently, an accredited investor does not need to purchase the investment from a registered representative, even if the purchase is over $10,000. I don't think there is even an obligation for the seller, should the seller happen to be a registered representative, to check suitability of an accredited investor.
I think it would be a good idea for people who signed a statement that they were an accredited investor, when they were not actually, to see a lawyer.
7:14 am
May 19, 2020
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Norman1 said
Norman1 said
Are you saying that you initialed the schedules as an accredited investor?
sevenup said
Yes. And we are not one. He told us to initial and we did. He maintained "this is just standard stuff, doesn't mean anything".
Signing a declaration that one is an accredited investor places one in the same investor class as someone like Warren Buffet.
An accredited investor does not require suitability advice. Such an investor has the financial means to obtain and pay for independent advice on the investment, if desired. That's why the $1 million in net cash and securities, $200,000+ net annual personal income, $300,000+ net annual family income, and $5+ million family net worth qualifiers are mentioned.
Consequently, an accredited investor does not need to purchase the investment from a registered representative, even if the purchase is over $10,000. I don't think there is even an obligation for the seller, should the seller happen to be a registered representative, to check suitability of an accredited investor.
I think it would be a good idea for people who signed a statement that they were an accredited investor, when they were not actually, to see a lawyer.
Let me get this straight. You are saying that if we were rushed and manipulated into initialling something that one, we didn’t agree with and second, not qualified for, all of a sudden we have the same status as warren Buffett?!
The point here is not that we were deemed as a accredit investor and then nothing after that matters, the point here is that we were manipulated, and pushed to do something we did not understand And not agree to.
We are slowly learning that they were other people they were told the same lies and the same tactics to get their papers signed.
People like Elaine, who signed a purchase agreement she doesn’t even have a copy of. At least we got one through email, we actually don’t even know what we signed because it just has checkmarks to where we think we signed. We don’t have the signed copy. Elaine doesn’t have any documents. Never got anything? As far as we know, she was also deemed as an accredited investor.
Now I’ve learned that Sheri also was told the same persuasion tactics to get her to check mark and sign.
How is this right? Are you an investment advisor? Would you get away with this? Does your company tell you that it’s OK to coerce people into initializing and signing things?
7:18 am
May 19, 2020
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Norman1 said
Norman1 said
Are you saying that you initialed the schedules as an accredited investor?
sevenup said
Yes. And we are not one. He told us to initial and we did. He maintained "this is just standard stuff, doesn't mean anything".
Signing a declaration that one is an accredited investor places one in the same investor class as someone like Warren Buffet.
An accredited investor does not require suitability advice. Such an investor has the financial means to obtain and pay for independent advice on the investment, if desired. That's why the $1 million in net cash and securities, $200,000+ net annual personal income, $300,000+ net annual family income, and $5+ million family net worth qualifiers are mentioned.
Consequently, an accredited investor does not need to purchase the investment from a registered representative, even if the purchase is over $10,000. I don't think there is even an obligation for the seller, should the seller happen to be a registered representative, to check suitability of an accredited investor.
I think it would be a good idea for people who signed a statement that they were an accredited investor, when they were not actually, to see a lawyer.
Many of us are getting lawyers. But there will also be a class action lawsuit for people who can’t afford one. Pace took all of our money.
Please write your comments in the forum.