There are many things to admire about the
In part, this is due to the legions of public office holders and state regulatory bodies that exist south of our border. As well, though, the tolerance for mistakes and/or stupidity is lower in a sense. Although the
That’s why the
This came to mind yesterday with the news that New York State Attorney General Andrew Cuomo said he intends to bring legal action against Citigroup Inc. (C:NYSE) over its marketing and sales of auction-rate securities. This from the Wall Street Journal:
In a letter Friday, Mr. Cuomo’s office indicated it intended to sue Citigroup Global Markets Inc. and Smith Barney under the state’s Martin Act for fraudulent marketing of the securities and for destruction of documents under subpoena.
Mr. Cuomo’s office said a five-month probe found that Citigroup “repeatedly and persistently” made material misrepresentations and omissions in its underwriting, distribution and sale of auction rate securities.
“Citigroup represented that auction-rate securities were safe, liquid, and cash-equivalent securities,” wrote David A. Markowitz, chief of Mr. Cuomo’s Investor Protection Unit. “These representations were false, and had a severe detrimental impact on tens of thousands of Citigroup customers.”
The parallels to the 2007 asset-backed commercial paper scandal here at home are clear. According to many retail and corporate investors, ABCP was marketed as being safe, liquid and equivalent to BAs, with a few extra basis points thrown in. This doesn’t sound any different than the auction rate securities situation.
As one NYSE-listed corporate executive recently told me, a Canadian bank dealer money market institutional salesman that the ABCP assets would be available the next day when they went to cash them in assured his treasury team. That turned out to be anything but true.
In the State of
That’s code for only one thing: Despite the fact that each province has a Department of Consumer Affairs that is charged with protecting the public from fraudulent product marketing,
I have an idea. If none of the 25 or so Canadian agencies who could have initiated an ABCP investigation wants to use their statutory power, let’s put the Toronto Parking Authority in charge of it. They are swift-of-foot, genius business people, and they usually get their man/woman. They know their Code and they follow it with a relish we’d love to see in our regulatory and consumer protection agencies.
They’d even probably bring the perp walk to