Now the Securities and Exchange Commission is looking into the income trust insider trading:
The U.S. Securities and Exchange Commission revealed it is reviewing the matter in an e-mail Thursday to Judy Wasylycia-Leis, the New Democratic Party's finance critic who filed a complaint with the market watchdog last month.
"We are taking your complaint very seriously and have referred it to the appropriate people within the SEC," the market watchdog's legal counsel, Ann H. Sulzberg wrote.
Wasylycia-Leis asked the SEC to investigate a suspicious spike in trading of income trust units and related stocks in the hours before Goodale's Nov. 23 announcement. He announced, after markets closed that day, that he would not be changing the tax treatment of income trusts but would, instead, cut taxes on corporate dividends.
An unusual volume of trading was noticed on the New York Stock Exchange as well as the Toronto Stock Exchange.
Sulzberg went on to say that the SEC "generally conducts its investigations on a confidential basis and neither confirms nor denies the existence of an investigation unless we bring charges against someone involved." Hence, she informed Wasylycia-Leis, no future updates on the status of her complaint will be provided.
And the Ontario Securities Commission played johnny-come-lately:
In a Dec. 12 letter, OSC chairman David Wilson advised the MP that the OSC and the Market Regulation Services Inc. "routinely monitor trading and review instances of unusual trading. In conjunction with other market regulators, we determine the appropriate course of action including whether an investigation is warranted."
Wilson further advised that the OSC, like the SEC, will not confirm or deny the existence of any investigation.
Wasylycia-Leis said Wilson's letter amounted to saying "just basically trust us."
Isn't it amazing to note than the U.S. securities regulators seem to take potential fraud originating in a foreign jurisdiction more seriously than the Ontario regulators do what's going on in their own backyard?
Isn't it also amazing to see the NDP finance critic offer praise to the organs of American capitalism?
Perhaps the difference between the American response and the Canadian response to the scandal reflects a cultural difference regarding the importance of the free market.
Americans so value the free market that it moves more quickly and harshly those who would try to break it: witness the long prison sentences and heavy fines given to the likes of Dennis Kozlowski and Bernard Ebbers. No Canadian CEO who looted his company to the point of bankruptcy would ever face 25 years in prison like Bernard Ebbers. We don't even give most murderers 25 years.
Canadians, on the other hand, seem to be more upset with those who loot the public treasury, especially in Quebec. One wonders if an Adscam-style scandal would have been the source of as much outrage in certain American jurisdictions, such as major cities with longstanding Democrat administrations. Or Louisiana.
Whatever the case, I'd be more afraid of the SEC than the RCMP. The Mounties may get their man, but the SEC will squeeze his balls.
Source: Toronto Star