Ombudsman: Macquarie Private Wealth Refuses to Compensate Multiple Investors
More Than $230,000 Lost Due to Unsuitable Investments
TORONTO, Nov. 30, 2012 /CNW/ - The Ombudsman for Banking Services and
Investments (OBSI) today announced the refusal of Macquarie Private Wealth to
compensate several retail investors in the amounts of $74,791 and $157,274 as
recommended by OBSI after investigating the merits of their complaints.
Macquarie Private Wealth is a Canadian investment dealer. At the time of their
complaint, Mr. and Ms. S were a married couple from Ottawa with three teenage
children getting ready to attend university in the coming years (Mr. S has
since passed away.) The other complainant, Ms. M, was in her seventies,
retired and living outside of Halifax. Their advisors placed some or all of
their portfolios in investments that were unsuitable given their personal and
financial circumstances, investment objectives and/or risk tolerance.
The investment dealer that is the subject of the two complaints at issue here
has changed names and ownership over the years. During the time period when
the investors suffered their losses due to unsuitable investments, the
investment dealer was known as Blackmont Capital Corporation and was owned by
another financial company. In 2009, the Macquarie Group bought Blackmont and
subsequently renamed it Macquarie Private Wealth. Throughout the relevant time
period, the investment dealer remained the same and the responsibility to
compensate the customers rests with the investment dealer; merely the name
changed. When Macquarie Group acquired the dealer, the existing obligations of
the dealer remained unchanged.
Macquarie Private Wealth has stated that its vendor of the business agreed to
indemnify it regarding the complaints but has declined to fund the settlements
recommended by OBSI. In OBSI's view, Macquarie Private Wealth remains
responsible for the advisors' unsuitable recommendations that led to the
complainants' unsuitable investment portfolios while they were clients of the
investment dealer. Macquarie Private Wealth has chosen not to pay to the
complainants the amounts OBSI concludes they are owed based on the facts of
OBSI's recommended compensation amounts in these two complaints were arrived
at by first calculating the difference between the amount the investors'
accounts should have been worth had they been suitably invested and the actual
value as of the date they removed their investments from the investment
dealer. Interest was then added to compensate the investors for the loss of
use of their money, calculated from the date they first complained to the firm.
At the direction of securities regulators, OBSI established a one-time method
of independent review of certain cases that were headed towards refusals to
compensate. Both of these Macquarie Private Wealth complaints were among them.
Firms were offered the opportunity to have credible and experienced former
commissioners of the Ontario Securities Commission (OSC) provide an
independent assessment of the files in question based on standards consistent
with OBSI's Terms of Reference. If OBSI had unfairly considered the facts of
the case or our investigation findings were objectively flawed, the reviewer
would say so in their report on the matter. Macquarie Private Wealth chose not
to take up this offer.
A copy of OBSI's investigation report for both Mr. and Ms. S's complaint and
Ms. M's complaint is available on OBSI's website. Some names and personal
information have been edited from the original version to protect the identity
of certain individuals involved, including the complainants.
Where a complaint is found to have merit, OBSI makes a recommendation for
compensation where it would be fair to do so, taking into account all of the
facts and circumstances of the case. Refusals by firms to follow an OBSI
recommendation to compensate mean that OBSI must publicize that refusal and
the details of the complaint under Section 27 of OBSI's Terms of Reference.
OBSI has taken several significant and extraordinary steps to resolve this and
certain other complaints that could not be resolved before resorting to
announcing a refusal to compensate.
OBSI is Canada's national independent dispute resolution service for consumers
and small businesses with a complaint they can't resolve with their banking
services or investment firm. As a free alternative to the legal system, we
work informally and confidentially to find fair outcomes to disputes about
banking and investment products and services. Over 99.8% of the thousands of
complaints brought to OBSI since the organization's inception have been
OBSI looks into complaints about most banking and investment matters
including: debit and credit cards; mortgages; stocks, mutual funds, income
trusts, bonds and GICs; loans and credit; fraud; investment advice;
unauthorized trading; fees and rates; transaction errors; misrepresentation;
and accounts sent to collections. Where a complaint has merit, OBSI may
recommend compensation up to a maximum of $350,000.
Tyler Fleming Director, Stakeholder Relations and Communications
SOURCE: Ombudsman for Banking Services and Investments (OBSI)
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CO: Ombudsman for Banking Services and Investments (OBSI)
-0- Nov/30/2012 16:20 GMT
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