UPDATED: Macquarie named in OBSI complaint

OBSI today issued a statement saying Macquarie Private Wealth is refusing to compensate clients who suffered losses due to unsuitably invested accounts.

Macquarie, a Canadian investment dealer, is currently the subject of the two complaints. One was submitted by a married couple from Ottawa, and the other was sent in from a retired woman in Halifax. They’re asking for $74,791 and $157,274, respectively.

The compensation amounts 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.

OBSI, a dispute resolution body, says the clients told them their previous advisors placed some or all of their portfolios in investments that were unsuitable, given their personal and financial circumstances, investment objectives and risk tolerances. The advisors were not named in OBSI’s release.

During the time period of these investments, however, the investment dealer was known as Blackmont Capital Corporation. OBSI says Macquarie Group bought Blackmont and renamed it Macquarie Private Wealth in 2009.

In response, Macquarie has issued the following statement:

“The Ombudsman for Banking Services and Investments has made public statements about investigations it led into services provided by certain investment advisors.

Macquarie Private Wealth is falsely identified in these statements as the firm at which these advisors were employed. Further, OBSI claims that MPW is today refusing to pay the compensation OBSI has deemed appropriate in these matters.

In fact, the dealings between the advisors and their respective clients took place at Blackmont Capital and its predecessor firms between 2000 and 2009. This was before MPW’s entry into the Canadian marketplace. Macquarie has nothing to do with any of these issues.

Macquarie Private Wealth came to Canada through the acquisition of Blackmont in January 2010 [not 2009]. By this time, the advisors in question were no longer with Blackmont, and their clients no longer had any association with the firm. At no point were these advisors employed by MPW.

Macquarie has serious concerns about the merits of OBSI’s findings. However, if there is an obligation on any party to pay compensation in relation to these matters, Macquarie believes that this duty should fall on the corporate parent of Blackmont during the relevant events in these cases.

OBSI ought to seek relief from parties that were actually involved in these cases, rather than to seek damaging publicity against Macquarie.”

Recently, the OBSI released a follow-up statement addressing the above comments. It says:

“Macquarie Private Wealth has since issued a statement asserting they came to Canada through the acquisition of Blackmont Capital Corp. in January 2010 (not 2009 as OBSI stated), that the advisors in question were no longer with Blackmont at that time, and that this is material to OBSI’s findings.

As OBSI has noted, the investment dealer subject of the two complaints at issue here has changed names and ownership over the years. When Macquarie Group acquired the dealer, the existing obligations of the dealer remained unchanged. The issue of the time of the advisors’ employment is irrelevant to the issue of the obligations of the dealer toward their former clients. These obligations don’t disappear with a name change.

Nevertheless, for the purposes of setting the record straight, OBSI relied on several publicly-available documents when determining the date of the transaction. These included: IIROC notice 10-0002 and CI Financial Corp’s Annual Information Form.

Both identify it as December 31, 2009. Macquarie Private Wealth was also provided with the opportunity to provide its comments on OBSI’s investigation reports before they were released to the public to avert any errors.”

Read the OBSI’s investigation reports for both the Ottawa couple and the Halifax retiree.

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