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Federal Conservatives' Proposed
White-Collar Crime Measures Too Little, Too Late to Protect Investors
and Consumers U.S. Experience Shows Two New Citizen Watchdog Groups
Needed
For Effective Corporate Accountability Wednesday, October 21, 2009 OTTAWA - Today, the 30-member group Corporate Responsibility
Coalition (CRC) pointed to the U.S. corporate crime rate in criticizing
the federal Conservatives' claims that creating a national security
commission and increasing penalties for some corporate criminals will
effectively protect investors and consumers. "If a national securities commission and tougher penalties effectively protect investors and consumers from corporate criminals, why does the U.S. still have a such a high corporate crime rate and why did Bernie Madoff and others get away with their frauds for so many years?" asked Duff Conacher, Coordinator of Democracy Watch and Chairperson of the Corporate Responsibility Coalition (CRC). "The best way to protect investors and consumers is to empower them by creating broad-based, well-resourced, independent groups that can push businesses to act fairly and regulatory agencies to enforce laws strictly, can educate consumers and investors to avoid scams and help them with complaints and lawsuits, and can push governments to close loopholes in laws." "Given that investors and consumers pay all the costs of corporations, banks and insurance companies advocacy efforts, the most effective way for the federal government to balance the marketplace is to require those companies to enclose a pamphlet in their mailing envelopes that gives investors and customers an easy way to join, fund and support their own advocacy watchdog groups," said Conacher. Two groups, one for investors and one for bank and other financial institution customers, can be created at no cost for the federal government or any business, using a simple method that has been successfully implemented to create watchdog groups for telephone, hydro and water utility customers in four U.S. states. All the federal government has to do is require Canada's largest corporations, and big banks and insurance companies, to enclose a one-page pamphlet in the envelopes they send to investors and customers -- again as recommended by a federal government task force and parliamentary committees. The pamphlet sent to individual investors in annual report and other shareholder-notice envelopes will describe and invite investors to join a individual investor organization for a nominal annual fee of $30-$40, a democratically structured organization that will be directed by a board elected from amongst the members. More than 10 million Canadians will receive the pamphlet, and if only 5 percent join the group will have 500,000 members and a $15-20 million annual budget -- resources needed to educate investors, help with complaints and lawsuits, and to push the investment industry to serve customers fairly and well at fair prices, and to push governments to close loopholes and enforce laws. The pamphlet sent to bank and insurance company customers in bank statement, credit card bill and insurance policy envelopes will invite them to join a financial consumer organization. More than 20 million Canadians will receive the pamphlet, and if only 5 percent join the group will have 1 million members and a $30-40 million budget -- resources needed to educate and protect financial consumers across the country. The creation of the financial consumer organization has also been endorsed by the 100 citizen groups in the nation-wide Canadian Community Reinvestment Coalition. Both groups would pay for the costs of printing the pamphlets, and for any costs of inserting the pamphlets into the envelopes being sent out by large corporations and investment industry companies, the big banks and insurance companies -- so again it will not cost the federal government, nor any company, anything to create the groups. Financial service industry customers and investors are currently gouged with extra charges that Canada's large corporations, and big banks and insurance companies, use to pay their more than $500 million annual costs for industry advocacy efforts (advertising, lobbying, political donations and gifts). It is only fair that these businesses be required to facilitate the funding of investor and consumer advocacy efforts by enclosing the pamphlets in their mailings to investors and financial consumers. "Any federal political party that does not support creating these watchdog groups also does not support effective investor and consumer protection because the record shows clearly that regulatory agencies and laws alone are not enough to prevent white-collar crime, mainly because companies and regulators both know that investors and consumers do not have the resources needed to actually catch them and hold them accountable for wrongdoing and negligence," said Conacher. The pamphlet method can also be used to create citizen watchdog groups for the telecommunications industry, the airline industry, and provincial energy and water utilities -- for details, click here.
- 30 - FOR MORE INFORMATION, CONTACT: Democracy Watch's Citizen
Association Campaign, Corporate
Responsibility Campaign and Bank
Accountability Campaign |