Deep defiance

(November 2006) We are thrilled to bring you our first (and hopefully not last) foray into investigative journalism. Our cover story takes a closer look at the court case of Kent Shirley (now deceased) versus his former employer, top Saskatoon advisor Brian Mallard — and the ruckus that ensued.

The story starts in 2004, when Mallard first alerted Advisor.ca editor Doug Watt about Shirley’s filed statement of claim. Like any resourceful reporter, Watt chased down the lead, wrote a brief article and assumed the matter would be settled out of court. End of story.

Little did Watt know that Shirley would start leaving him lengthy voicemail messages outlining his perspective. Mallard would occasionally provide Watt with his own off-the-record updates.

When Mallard was granted a court order to retrieve data from Shirley’s apartment in October 2004, Watt realized a bigger story was on the horizon. But Mallard was reluctant to speak publicly on the subject after a National Post article by Jonathan Chevreau called the Shirley case a “classic David v. Goliath tale.”

The legal wrangling dragged into 2005 and by then had piqued the interest of Matthew McClearn, a senior writer with Canadian Business, which like Advisor’s Edge is owned by Rogers Media. McClearn had read through all the court documents and contacted Watt in the summer of 2005, hoping they could pursue the story together.

McClearn had investigative journalism expertise but Watt had the key contacts — notably Mallard. In November 2005, they met with Mallard to discuss the possibility of a story. It took some persuading but Mallard finally agreed to an exclusive interview. Watt and McClearn began piecing together court files and correspondence from other sources. The interview with Mallard took place last summer and the resulting story can be read by clicking here.

You may wonder why we devoted 12 pages to this saga. On the surface, “The Defiant One” may be an intriguing yet tragic tale of how a wrongful dismissal suit became a bizarre paper chase — with a motley crew of industry regulators, reporters, investor advocates and Mallard’s dealer firm along for the ride.

But embedded in the intricacy are some important lessons for advisors. Here are some of Watt’s take-aways:

Be careful whom you hire. Many advisors have proclaimed the difficulty of finding talented and capable people — and this article does nothing to diminish that plight. If, subconsciously or otherwise, you have any doubts or see red flags about a person, don’t dismiss those feelings, and let the search for the right employee continue.

Keep an eye on the goings-on of your office. “Make sure no-one can walk in and steal documents,” Watt advises, noting it was months before Brian Mallard realized proprietary documents were missing.

Never underestimate the regulators, since many will “shoot first and ask questions later,” Watt says. “Also make sure you follow the rules and have your paperwork in order.”

We welcome your feedback on this piece, which also appeared in the Nov. 6 issue of Canadian Business.

Filed by Deanne Gage, Advisor’s Edge deanne.gage@advisor.rogers.com