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The family of Earl Jones has come forward to denounce the self-styled investment advisor who has disappeared along with investors’ assets is still at large.

“We want to express our profound regret for the pain and suffering that he has caused and state our own sense of deception,” reads a statement issued by his wife and daughters. “Over the past days since becoming aware of the situation we too have experienced a wide range of emotions, from anger to despair and disillusionment.

“The Earl Jones who has been revealed in recent days is a man we can scarcely believe exists.”

Jones is suspected of operating a Ponzi scheme under the guise of a financial advisor, and diverting approximately $50 million of investor funds.

His own daughter and her husband are also financially exposed and now fear that they will never recover their funds. The family claims to have been in the dark about his business activities and has agreed to cooperate with the authorities.

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Foreign buyers bulk up on Canadian bonds

In May, foreign acquisitions of Canadian securities reached a five-year high, totaling $18.9 billion. Statistics Canada reports that non-resident investors purchased an unprecedented $19.4 billion of Canadian bonds.

Canadian firms, mainly from the energy and resources sectors, issued $9.3 billion of new bonds in foreign markets in May, nearly all U.S. dollar-denominated bonds placed in the American market. Interest rate differentials between corporate and government securities continued to narrow in the United States. Reduced borrowing costs and the strength of the Canadian dollar may have contributed to strong cross-border new issues of corporate bonds in May.

Throughout May, Canadian investment in foreign debt securities concentrated on short-term instruments. Canadian investors sold $733 million of foreign bonds in favour of $965 million of foreign money market paper.

Similarly, Canadians sold $985 million of foreign securities, and reduced their holdings of Canadian money market instruments by $1.5 billion, mainly due to retirements.

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SIFMA embraces Obama proposal

Wall Street’s main lobbying group, the Securities Industry and Financial Markets Association (SIFMA), has publicly endorsed American President Barack Obama’s proposal for uniform regulatory standards which would hold brokers to the same fiduciary duty as financial advisors.

Currently, the titles “advisor” and “broker-dealer” refer to a different standard of care when dealing with clients because they are separately regulated.

Under the new proposal, investors will be protected by the same federal fiduciary standard whether they are receiving the advice from an advisor or broker.

However, broker-dealers do provide services that are not offered by investment advisors, such as raising capital for business or mergers and acquisition activity. In these areas of business, where personalized advice is not involved, SIFMA recommends that the current rules should stand.

SIFMA believes that the SEC is best positioned to iron out the details of the proposal and the task could take months to complete. Nonetheless, regulators will be relieved to see the situation resolved, after the long-running controversy over the different fiduciary standards.

The proposal could bring significant changes to the brokerage business practices, as it would require brokers ensure suitability of products they sell to clients. Fee structures may shift from transaction-based commissions to being based on client assets.

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CIBC employees appeal overtime decision

A national class action against CIBC for unpaid overtime is being appealed to the Ontario Divisional Court.

On June 18, 2009, Ontario Superior Court Justice Joan Lax refused to certify the case as a class action because the facts surrounding the complaints were too individualized and as a result did not pass the test of being class action case.

Dara Fresco, a teller at one of the CIBC’s Toronto branches who started the case in 2007 is the proposed representative plaintiff. She is asking, on behalf of thousands of current and former CIBC employees, that the Divisional Court overturn Justice Lax’s ruling and certify the case as a class action.

“My experience from working in a dozen branches of the CIBC is that unpaid overtime is a regular occurrence at the branches,” says Fresco. “Hundreds of CIBC employees from across the country have contacted me and my lawyers and confirmed that it is their experience as well.”

Fresco’s lawyers are required to file the materials in support of her appeal by the end of August, following which CIBC will have 60 days respond.

“Many of the most significant class action decisions in Ontario were initially denied but later reversed on appeal,” said Louis Sokolov, one of Fresco’s lawyers. “We believe that there are compelling reasons to certify this case as a class action and are hopeful that the appeal court will do so.”

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Kronos integrates with PlanPlus Web Advisor

CRM software platform manufacturer Kronos Technologies Inc. is uniting its platform Kronos Web with PlanPlus Inc.’s financial planning software Web Advisor.

“With our growing base of financial advisors using Kronos Web in Quebec and throughout North America we’ve been actively looking for a scaleable world-class financial planning software integration to expand our offerings to the financial services industry” explained Jean-François St-Pierre, president, Kronos Technologies.

“Kronos’ integration with PlanPlus Web Advisor was the best overall solution. Their unique multi-lingual, multi-currency and multi-jurisdictional approach and their web-based solution — the only major web solution in the industry — can scale effectively from very small advisor firms to enterprise level companies” added St-Pierre.

The integration with PlanPlus Web Advisor allows both large and small companies to pull together their back office and CRM data into a powerful client management solution. The integration then creates the link to seamlessly transfer client information into PlanPlus Web Advisor for the creation of financial plans.

(07/20/09)