Pace Securities | Page 27 | General financial discussion | Discussion forum

I don't really follow the analogy of someone coming into your house to steal stuff, if I understand right some adults freely signed papers and entered into contracts with another party that they thought would pay them very nice interest rates higher than the going GIC rates the rest of us were getting. And maybe a bit of wilful blindness, I don't know. From my reading of these posts, seems to be some fault/blame to be apportioned to each side.
But at this point people will just have to wait to let the process play its way out.

Bill said
I don't really follow the analogy of someone coming into your house to steal stuff, if I understand right some adults freely signed papers and entered into contracts with another party that they thought would pay them very nice interest rates higher than the going GIC rates the rest of us were getting. And maybe a bit of wilful blindness, I don't know. From my reading of these posts, seems to be some fault/blame to be apportioned to each side.
But at this point people will just have to wait to let the process play its way out.  

I got the bit of sarcasm in your earlier post.I was willing to remove my money to get a better rate at The Hydro Credit Union(of which I also belong)The rates at Pace were much less than at Hydro Credit Union.Ready to walk with my money when someone said-wait forgot-last day of this deal.I had no idea that there was Pace Securities and Pace as I had switched over when ALtrans was bought out .I never had a GIC with PACE,I have done investments in the past for my RRSP and the bottom line is I do not lose my capital.There was never any of that discussion in the room.As far as I knew I was buying a PACE branded GIC,I was never given any paperwork afterwards ,so this idea of bonds was something knew to me,I did not walk out of that room with bonds or anything.When I was able to renew a year later for another GIC the rate was much better and I just did it at the counter.Wondered why I was not in the room but whatever.Funny thing was-I got a call after my GIC would have expired asking if I had any money to invest and I said I had already bought a GIC.He said -you know we are the ones with the good interest-I said you said it was a deal that had expired.And that made me wonder.
And believe it or not-so I don't get tempted by these promotions I never look at the flyer that covers the statement(no online banking) and one time I was overdue with my BELL bill because they were sending it with a wraparound FIBE thing and it would just go in recycling.
So-that's my story-and it may be different than many others-but when you are selling this crap without doing the Know Your Client,and to some people with dementia,and in a Credit Union-it is theft.
But think whatever you want-you are anonymous and I have put myself out there.

Loonie said

If Eves is not being pursued by authorities, then I'd say he thinks he's darn lucky.
He is a former finance minister and premier, for goodness sake! He was far from naive about financial matters. It's not reasonable to think he didn't have the wits to know what sort of company he was keeping.…

Many of these ex-politicians are not necessarily experts themselves. They relied on the expertise from the staff behind the scenes like the deputy minister and other public servants in the ministry.

But, they are well recognized like a celebrity. Their celebrity is used to lend credibility to a company that needs it. I think the term for such people is "financial gigolo". Former out-of-work politicians, ambassadors, and astronauts are popular choices when a "financial gigolo" is needed.

It is a warning sign when the company board is filled with such people!

It is likely that former Chairman Eves relied on regular information from the compliance officer McRae and the ultimate responsible person Thomson. Thomson likely didn't send a memo out that he was running the PACE Financial investments outside of the constraints in the offering memorandum.

This is the important part...“Thomson likely didn't send a memo out that he was running the PACE Financial investments outside of the constraints in the offering memorandum.

Norman1 said

Loonie said

If Eves is not being pursued by authorities, then I'd say he thinks he's darn lucky.
He is a former finance minister and premier, for goodness sake! He was far from naive about financial matters. It's not reasonable to think he didn't have the wits to know what sort of company he was keeping.…

Many of these ex-politicians are not necessarily experts themselves. They relied on the expertise from the staff behind the scenes like the deputy minister and other public servants in the ministry.

But, they are well recognized like a celebrity. Their celebrity is used to lend credibility to a company that needs it. I think the term for such people is "financial gigolo". Former out-of-work politicians, ambassadors, and astronauts are popular choices when a "financial gigolo" is needed.

It is a warning sign when the company board is filled with such people!

It is likely that former Chairman Eves relied on regular information from the compliance officer McRae and the ultimate responsible person Thomson. Thomson likely didn't send a memo out that he was running the PACE Financial investments outside of the constraints in the offering memorandum.  

My opinion of what is "likely" is quite different.

I am aware that some former politicians are sought for endorsements and very rewarding directorships (e.g. Mike Harris and Chartwell, which runs quite a few long term care homes in Ontario), and others are avoided like the plague and have trouble getting a job.

These people are brought on board not just because of name recognition per se, but because they know the ropes of government, what you can likely get away with and what you can't, and for the very large number of people in positions of power whom they can phone up and have an influential chat with. A sitting premier of any stripe is almost certainly going to pick up the phone when a former one calls.

And I am aware that cabinet ministers and even premiers often rely on the input of their senior staff, but that they also ignore it, and are also influenced by many other factors including their own knowledge and judgment.

That's their job, to juggle all these inputs and make wise decisions, whether the input is from staff, lobbyists, donors, pollsters, whatever.

What that experience gives them, if they didn't have it before, is, or can reasonably be expected to be, insight into the wiles and motives of those who approach them to ask for their involvement. If they come out of all that political experience naive, then they would have to be cognitively deficient.

I have not heard the answer to the question of how Eves or the other cabinet minister got involved in this fiasco. I have not heard what their past relationships may have been. I have not heard how the project was presented to them. If these questions have been addressed, I've missed it. I also don't know what they principals expected to get out of this but I'm sure they weren't into it for sport. A former premier can be very well rewarded with directorships etc., and doesn't have to lend his name for free. If he does, it suggests a strong personal relationship of trust; if he doesn't, it suggests an expectation of significant personal gain.

My sense of what was "likely" is that he knew what he was getting into. He's a graduate of Osgoode Law School and has been a practising lawyer. I don't think he's naive. I think he knows how to protect himself.

To be fair, Norman and Bill are really pointing out the reality, and I dont believe they have a hidden agenda.
This is what I think will ultimately happen after all the dust have settled:

1) Pace CU will be merged/swallowed by another CU, the deal will either be brokered by the authority or it will simply happen naturally cuz the Pace brand name is not viable. I am not talking about financial viability, but rather people will avoid the name given the bad publicity

2) Its more of a wish than reality for those affected to get 100% of their money back. Look at the Lehman minibond fiasco in Asia during 2009/2010. That is almost identical to what happened here.

3) A capable adult's signature on multiple documents are a very powerful tool and the court will weigh that heavily. Unless the documents clearly stated principal protection plus the word GIC, multiple signed documents mean the investors accept the risk in the eye of the court. You will have a much better chance if you can demonstrate you only purchased GIC before and zero exposure to ANY risk investment ever (stocks, mutual funds, corporate bonds) etc If you fit this description, the KYC rule is in your favor for 100% recovery. You still need to launch a separate lawsuit and opt out of the class action.

4) Mediation process is not to determine 0% or 100% compensation. It is to come up with a number somewhere in between to avoid a trial. Pace has very little risk if investors demand 100%, they will simply have it sort out in court which will take some time, a scenario that only makes the lawyers rich. For those who think Pace has huge reputation risk if this drag on, you are wrong. Making investors whole in this case is a pretty heavy blow if not fatal from a financial standpoint. And Pace do have the legal ground in their favor unfortunately.

savemoresaveoften said
To be fair, Norman and Bill are really pointing out the reality, and I dont believe they have a hidden agenda.
This is what I think will ultimately happen after all the dust have settled:

1) Pace CU will be merged/swallowed by another CU, the deal will either be brokered by the authority or it will simply happen naturally cuz the Pace brand name is not viable. I am not talking about financial viability, but rather people will avoid the name given the bad publicity

2) Its more of a wish than reality for those affected to get 100% of their money back. Look at the Lehman minibond fiasco in Asia during 2009/2010. That is almost identical to what happened here.

3) A capable adult's signature on multiple documents are a very powerful tool and the court will weigh that heavily. Unless the documents clearly stated principal protection plus the word GIC, multiple signed documents mean the investors accept the risk in the eye of the court. You will have a much better chance if you can demonstrate you only purchased GIC before and zero exposure to ANY risk investment ever (stocks, mutual funds, corporate bonds) etc If you fit this description, the KYC rule is in your favor for 100% recovery. You still need to launch a separate lawsuit and opt out of the class action.

4) Mediation process is not to determine 0% or 100% compensation. It is to come up with a number somewhere in between to avoid a trial. Pace has very little risk if investors demand 100%, they will simply have it sort out in court which will take some time, a scenario that only makes the lawyers rich. For those who think Pace has huge reputation risk if this drag on, you are wrong. Making investors whole in this case is a pretty heavy blow if not fatal from a financial standpoint. And Pace do have the legal ground in their favor unfortunately.  

Now you tell me!
To be fair-after going through the legal stuff with my son I know full well how much a lawyer on my own would cost.100 G would be around the starting point-and since there was a class action Osgoode Hall Legal Clinic would not help.
If a know your client thing is having someone say-wow-you own a house in Toronto-you must be rich-and me thinking he was just talking-not filling out forms.And putting me as an accredited investor.It would be interesting to know just how many ACCREDITED INVESTORS Pace Security had.Wealthy beyond all means.That would be a fun fact.maybe someone can produce that little tid-bit of info.

Douglas Thomson said
The Pace Securities advisors defrauded clients by convincing them they were putting their money into a investment with bond-like security. They were enabled by the credit union. It was simple fraud. Whether that’s a matter for civil court, or criminal, remains to be seen.
(Cue “Norman’s” hand-washing)  

https://www.theglobeandmail.com/business/article-agencies-battle-over-who-dropped-the-ball-as-pace-credit-union-back/

If the Credit Union could have just stood by the signature, they would have given everyone a copy of their papers which they did not do.

With 700 investors! Clearly they were hiding something from the beginning.

Norman1 said

Elaine said
It is such a mess.
All us adults signing contracts .
It is our fault

It is not quite like that. As savemoresaveoften mentioned, being legally at fault doesn't mean that one is necessarily 100% responsible for the result.

Once a loss has been established, there will be arguments back and forth about who is responsible and how much responsible (from 0% to 100%).

Judge could find that one is 80% responsible and the other person is 20%. If the one asking for compensation is found to be 80% responsible for the loss, then that person will only be awarded 20% of the loss.

…
But Chit-Chat hearing was allowed in seniors homes for years preying off the seniors as they were allowed to go into their residence and sell crap.
It does not seem that a lot of companies have any kind of moral compass any more.

Norman-you have given me a great idea. If FSRA LIKELY interviewed the salesperson I should be able to get a copy of the interview that MAY have happened.Thanks for that.

Unfortunately, when there's money or a sales commission to be made, there's temptation to do bad things, especially if the person needs that commission to pay next month's rent or put food on the table.

It is standard procedure to get the story from both sides. If it ends up in court, judge would want to hear from both sides.

You definitely can ask for a copy. I'm not sure FSRA would be obligated to give a copy right now. If this lands in court, you and your lawyer definitely be entitled to a copy then as part of the discovery process.  

Wow Norman- this is interesting- suggesting a judge would rule on theft or fraud based on whether the person needed the money for rent.I guess I should try that.Go steal something because I am in need and know that the judge will empathize with me.
I guess this goes for all the advisors.The judge will sympathize with them because they need to make payments on that nice new Tesla they bought.And they ,too ,have a mortgage-so maybe the judge will say I need to give them more money.