Protecting Investors Neil Gross

Neil Gross is the executive director of the Canadian Foundation for Advancement of Investor Rights (a.k.a. FAIR Canada). During his 30 years as a lawyer, he specialized in investment malpractice litigation and securities law. Although he is best known for representing retail and institutional investors in hundreds of disputes, he also acted as legal counsel for a broad cross-section of investment professionals in regulatory enforcement proceedings and other litigation matters, giving him a uniquely balanced perspective on a host of issues affecting investors and their financial advisors.

Be bold, regulators

Those still timorous and uncertain about introducing a best interest duty have a duty, themselves, to become decisive

Non-GAAP metrics: investors’ little helpers or harmful nonsense?

Every company can calculate non-GAAP metrics however they want, so there’s real risk of investors and markets being misled

Class dismissed

Overcautious courts are erecting barriers to securities class actions, even though these lawsuits are essential for maintaining the integrity and fairness of our capital markets

Why is deficient issuer disclosure allowed to persist?

Data show that investors routinely receive, or are at risk of receiving, seriously bad disclosure from reporting issuers more than a quarter of the time

If equity crowdfunding is a dud, let it die

The trickle of interest in the U.S. has prompted some lawmakers there to conclude that the design of the exemption must have been bungled

Who benefits and who loses from keeping OBSI toothless?

A new independent report makes it clear that binding decisions are needed for full and fair compensation

Investment professional or faux pro: Which will you be?

It’s time for advisors who want to be true professionals to make their voices heard in support of some real reforms

The case for robo-reciprocity

Reciprocal enforcement of disciplinary orders is a practical way to reduce problems caused by regulatory fragmentation, but it needs to be comprehensive and automatic

Fraud prevention requires detention

Deterrence is the key ingredient, but it won’t be achieved through fines and public education

Science-denying tactics will do the mutual fund industry no good

As regulators enter the final stage of deciding the fate of trailing commissions, they rightly insist on real evidence-based analysis

Laws should aid misled investors, not negligent auditors

It’s time to discard an ill-fitting legal precedent and rethink our inadequate liability limits

Margin of error: Why advisors shouldn’t be off-book loan distributors

Letting margin and off-book lending proliferate simply invites disaster — as does any arrangement that incentivizes advisors to recommend leveraging

Cumming’s report: The final nail in the coffin for trailing commissions

There’s really no alternative anymore. Trailers must be banned and the investment industry needs to get on board with that

Get ready for the Kijiji Stock Exchange and Uber portfolio-sharing app

Can anything stop consumers from using disruptive technology to sidestep the investment industry’s business models?

Advisors’ failure rate in recent “mystery shopping” tests: 37%. Imagine if doctors performed that badly.

The results underscore an urgent need to reform lax proficiency standards and adopt a best interests duty so Canadians can get the caliber of investment advice they deserve

OBSI’s new chief must transform the end game

‘Naming and shaming’ is ineffective and dysfunctional. It needs to be replaced by a practical mechanism that produces binding decisions

Take more and broader collective action, regardless of constitutional leanings

Financial services regulators, SROs and legislators should work more closely together to kick out scoundrels and collect the money owed in fines

What choice do we have when choice itself is engineered?

Investors’ freedom of choice is somewhat illusory. But we can change that and, in the process, make things better for investors and advisors alike

Whistleblowers deserve full protection – including anonymity

Nothing else truly guarantees safety from reprisal, workplace ostracism and career loss

New plans and proposals deserve praise

Policy initiatives on ETFs, bonds, private placements, pensions and financial planners all merit some cautious kudos

Want strong investor protection? Become ‘Regulators Without Borders’

Stop making investors figure out who’s got jurisdiction to address their concerns. Instead, build a seamless help desk, and connect all investment regulators to it

How committed are we to preventing investment fraud?

Beyond education, it will take better co-ordination, stronger tools, firmer sentencing and political resolve to win the battle against fraud

Crowdfunding portals need to get their own startups right

There are five key steps crowdfunding portals must take right now to ensure their first strides aren’t missteps

If there must be an OM exemption, make it safer

Protecting the public from OMs’ misuse isn’t just important for the sake of investors; it’s also necessary to help small businesses gain sustainable access to capital

Clients aren’t anyone’s property

When an advisor switches firms, it’s the investor’s choice whether to stay or follow. Nothing should interfere with that

What needs to be said about what not to say

If CRM2 is to be a game-changer for investors, it must not be diluted by the artful use of spin or information overload

KYP in a complicated world

How can there be meaningful know-your-product compliance while complex new investments have as yet unknown performance characteristics?

Does disclosure actually work?

Research in behavioural economics has begun to raise questions that are disturbing and inconvenient. But they can’t be ignored

Robo-advisors might prompt shift to best interests standards

In response to this rising trend, traditional advisors may be forced to offer ever-greater protection, catapulting them straight toward fiduciary status

How to protect clients with signs of cognitive impairment

Here’s what advisors should do when they suspect a client’s ability to make significant financial decisions is deteriorating

Culture of resistance is the problem, not regulatory burden

After stonewalling reforms for years, the investment industry has no one but itself to blame for the onslaught it now complains about

Fundamental change to OBSI is needed

With some dealers making a mockery of OBSI, it’s time for regulators to build a dispute-resolution system that cannot be subverted

Investor confidence: Gone in 60 milliseconds

It’s essential that regulators move quickly on high-frequency trading to ensure securities exchanges and ATSs operate in a manner that all investors — regardless of their size or speed — can utilize with utmost confidence

An opportunity not to be missed

The development of detailed standards for risk-tolerance assessment will enhance consumer protection and help advisors and their dealers reduce their exposure to claims and disciplinary proceedings

The CSA must act on critical reforms

Two key issues — the best-interests standard and reform of mutual fund fees — require timely and effective action

Treat shareholders fairly when venture issuers raise capital

FAIR Canada supports exemptions that have the key features of rights offerings or private placements in compliance with the TSXV’s private placement rules

Reform of accredited investor exemption is needed

Current regulations assume that an investor’s wealth is a proxy for sophistication. This has to change

Proposed OM exemption not supported by the facts

Ontario intends to harmonize its rules regarding the offering memorandum with other provinces; the question is, why would it want to given the experiences seen to date?

Crowdfunding may not be all it’s cracked up to be

The deregulation of securities laws to allow anyone to invest via equity crowdfunding is like the Titanic heading into iceberg alley