Extracts from the Endowment Mortgage Presentation to the ‘Joint Committee on Finance and the Public Service’, on 18th January 2006
FOREWORD !
Attending before the Joint Committee were:
Mr. Liam O’Reilly —— Chief Executive Officer at the Office of the Financial Regulator,
Mr. Joe Meade —— Financial Services Ombudsman, and
Ms. Mary O’Dea —— Consumer Director at the Office of the Financial Regulator.
Note! It is clear from the proceedings that, prior to this Presentation, there was a mutual understanding and agreement between the above three parties (i.e. between the Financial Regulator, the Financial Services Ombudsman and the Consumer Director) with respect to what each of the parties was going to say in their respective presentations and with respect to who would be the primary fielder on particular issues raised by the Joint Committee.
The extracts set out below are those that I deem most relevant to the subject matter of this website-book. The entire presentation and discussion may be studied on This Link.
The more substantive background and explanatory comments inserted by me are within boxed Notes. For cross-reference purposes, these boxed Notes are numbered, EMP1, EMP2, etc.
Further clarifications and explanatory comments are inserted within curved brackets.
Also, for particular emphasis, bold print, underlining, Capital Letters, ‘single quotation marks’ and italics have been applied to elements of the extracts.
Note! The request that the Financial Regulator, the Consumer Director and the Financial Services Ombudsman attend before the Joint Committee followed immediately from a letter, and its accompanying ‘report’, on Endowment Mortgages sent by the Financial Regulator to the Committee at the end of the previous month, December 2005.
Note! As is evidenced by the good wishes expressed by some of the Deputies, the Financial Regulator, Mr. O’Reilly, was to leave his post for employment in ‘the world of maths and physics’ shortly after this Presentation to the Joint Committee. (His replacement as Chief Executive Officer, Mr. Patrick Neary, commenced his tenure in the Office of the Financial Regulator the following month, in February 2006.)
Chairman:I invite Mr. O’Reilly to make his opening statement.
Mr. Liam O’Reilly (Chief Executive Officer at the Office of the Financial Regulator):I thank the committee for the opportunity to meet today and discuss our recent survey on Endowment Mortgages. The Chairman will already have received the details in my letter sent to him at the end of December (as noted in the Foreword above). In my opening statement I would like to summarise those details. ………………
In recent years, public and media concerns have been expressed about the potential repercussions from the sale of these products (Endowment Mortgages) for consumers in Ireland. ………………
In order to get a picture of the extent of the potential shortfalls in Ireland, the Financial Regulator undertook a survey of Financial Institutions.
The survey found that 47,759 endowment policies, which were originally linked to interest-only mortgages, remained outstanding. Of these, 23,264 still retained the related mortgage. This means that 24,495 policyholders appear to have repaid the related mortgage while retaining their endowment policy as a pure savings product. ………
Using assumed investment returns, the projected aggregate shortfall on outstanding mortgage loans in respect of the responses received is estimated to be of the order of €89 million over the next 15 years, an average of €3,825 per endowment mortgage.
Note! (EMP1)
This ‘so called’ survey carried out by the Irish Financial Services Regulatory Authority amounted to an innocuous Questionnaire sent out to each Financial Services Institution.
This Questionnaire sought information with respect nothing more than —— the number of Endowment Mortgage Policies outstanding on the Mortgage Loan Books of each respective Financial Services Institution —— and how much the Final Values realised by the respective Endowment Mortgage Funds were likely to fall short of the amount required to repay the Mortgage Loans.
From its very conception, this ‘so called’ survey by the Financial Services Regulatory Authority was an act of whitewash with respect to THE CORE ISSUE (this being systemic fraudulent misrepresentation — as related below).
While it was very much in the interests of the Financial Services Institutions / Life Assurance Companies to understate the average projected shortfall, this ‘so called’ survey was solely confined to the information represented by these same Financial Services Institutions / Life Assurance Companies.
There was no effort made by the Financial Regulator to ensure a lack of bias with respect to input data for itstheir survey.
Though most fundamental to the credibility of any such survey, there were no customers / consumers consulted on the matter.
Nor was Irish Consumer Association consulted on the matter.
Also, there was no proper interrogation of the information being provided by the Financial Services Institutions / Life Assurance Companies (i.e. those who chose to respond to this Questionnaire).
Nor were there any caveats communicated to the Joint Committee regarding the veracity of this information.
For example, the stated average projected shortfall for Endowment Mortgage Funds seemed unbelievably low at €3,810. (By May 2005, the projected shortfall from the Irish Life Assurance Company for our own Mortgage for €50,790 [£40,000] over 15 years was between €8,360 and €9,130, based on assumed growth rates of 6.4% and 4.8% respectively. But the low average of the shortfall figures represented by the Financial Services Institutions / Life Assurance Companies was not contested or interrogated in any way by the Financial Services Regulatory Authority. Nor was there any independent assessment of these figures.
Nor was it stressed (there was just an oblique reference to this fact with respect to one element of the survey, but nothing in respect of the survey as a whole) by the Financial Regulator the the statistical analysis data deduced from the survey was solely based the information supplied by those Life Assurance Companies who chose to respond to the survey.
And there was no indication as to what Life Assurance Companies had refused / declined to take part in the survey.
Also, the survey was effectively limited to what the respective Financial Services Institutions chose to interpret as being Endowment Mortgages: there was no inquiry with respect to the existence and extent of similarly structured and represented Investment Mortgages or Annuity Mortgages (Repayment Mortgages)that promoted ‘in tandem’ investment in a Savings product. (This will be discussed further in EMP22 below.)
CRITICALLY, there was no interrogation of THE CORE ISSUE of how these Endowment Mortgages were originally represented to customers / clients / consumers at the time of contract / point of sale.
This ‘so called’ survey, as carried out by the Irish Financial Services Regulatory Authority, was therefore wholly consistent with the passive stance that had been adopted down the years by those in authority within Central Bank of Ireland.
While there had been a change of name with the advent of the Central Bank and Financial Services Authority of Ireland, the personnel in charge remained the same —— so there was no change of mind-set.
—————–BUT, the new Financial Regulator was about to deviate from the customary passive mode of the Central Bank.
The active thrust of the Regulator’s Endowment Mortgages Presentation and Responses to the Joint Committee would give effect to a diversion of focus from THE CORE ISSUE.
THE CORE ISSUE was SYSTEMIC FRAUD: the systemic fraudulent misrepresentation of the most substantive elements of the contract, and the systemic deliberate breach of fiduciary duty (most particularly with respect to disclosure of material information), this too being fraudulent misrepresentation ——— ALL, at or leading up to the time of contract / point of sale.
THE CORE ISSUE was the many Systemic Fraudulent Misrepresentations by which the Financial Services Institutions, the Life Assurance Companies, and the Mortgage Intermediaries had induced customers /consumers to choose an Endowment Mortgage in preference to a Repayment Mortgage.
And the REAL SHORTFALL with respect to compensation justifiably due to the victims of such fraudulent misrepresentation should, as an absolute minimum, be the financial difference between the encashment value of the Endowment Policy (at the particular point in time) and the amount by which the Mortgage Loan would have been reduced had the monies paid against the Endowment Mortgage been paid instead against a Repayment Mortgage. (This issue of the REAL SHORTFALL is addressed further in EMP7 below.)
The diversion of focus, effected by the Financial Regulator’s Presentation and Responses, would set up ENDGAME for the Financial Services Institutions’ Whitewash Imperative (see Section 2.6.6, The Whitewash Imperative) and steer proceedings with the Joint Committee towards the already contrived ‘SIX YEAR TIME LIMIT’ constraint set for the Office of the Financial Services Ombudsman. (See Section 2.6.7, A Stitch-Up in Time.)
CHECKMATE ! —— The Joint Committee would be induced to refrain from pursuing the matter further.
It is important to note that the legal and regulatory framework in the Irish market was substantially different from that in the United Kingdom at the time most of these products were sold. The major difference was that while a voluntary Code existed, there was no comprehensive Statutory Code in place in Ireland covering the sale of these products at the time they were sold.
Note! (EMP2)
What the Financial Regulator is here downplaying as merely being a voluntary Code was the Code of Conduct for Insurance Intermediaries issued by the Insurance / Life Assurance Industry.
The Regulator’s denial of status to this Code of Conduct is a whitewash of the actual situation.
(See Section 2.6.1: False Assurance — Irish Insurance Act 1989.)
This Code of Conduct was displayed in a prominent position in the public area of every Financial Services business premises.
This Code of Conduct was expressly represented to all prospective customers / clients as being issued under power of the Insurance Act 1989, i.e. it was expressly represented as having statutory status.
This Code of Conduct was also expressly represented to all prospective customers / clients as having being approved by the overseeing Government Department.
In Law, this Code of Conduct therefore had a very significant status: its prominent display in the public area of every Financial Services business premises both facilitated and, of itself, gave rise to Misrepresentation on all three counts, Fraudulent, Negligent and Statutory.
When the risks associated with the product were highlighted in Ireland in the 1990s, specific provisions were incorporated into the Consumer Credit Act 1995, which required warnings to the effect that the proceeds of a policy might not be sufficient to repay a mortgage. ………………
Note! (EMP3)
Again, this imparting by the Financial Regulator of a significant status to the Consumer Credit Act 1995 in respect of the disclosure of the Risks associated with Endowment Mortgages to customers / clients / consumers is not reflective of the actual situation.
In terms of disclosure of Risks, the provisions of the Consumer Credit Act 1995 were superficial in the extreme.
(See Section 2.6.2: Huffing and Puffing ??? Irish Investment Intermediaries Act 1995 and Irish Consumer Credit Act 1995. See also Section 2.6.4: The Irish Regulatory Regime.)
In terms of our own role, we are assisting Endowment Mortgage holders in three ways — through the provision of information directly to consumers, through our new ‘consumer protection code’ and through our work with the industry. ………………
Note! (EMP4)
But there would be no retrospective interrogation of the fraudulent means by which consumers / customers had been induced to enter into such contracts. For, as we have seen in Section 2.6.7, A Stitch-Up in Time, this route had already been closed off by a contrivance of Legislation.
The core principles of this new Consumer Protection Code would mirror the Requirements that had already been set down by the Central Bank in both its November 1996 and December 2000 Codes of Conduct.
Fraud, both at Common Law and Criminal Fraud, when perpetrated by a Financial Services Institution or its Management Personnel could again be whitewashed as merely being a breach of one the Financial Services Regulatory Authority’s Code of Conduct Requirements.
This would ensure continuance of the special protection status afforded to both the Financial Services Institutions and their Management Personnel.
(See Section 2.6.8: Some Men are More Equal than Others.)
Chairman:We will now hear a statement from Mr. Meade.
Mr. Joe Meade (Financial Services Ombudsman):
……………… My role is [therefore] a quasi-judicial one and whether a complaint can be upheld will be determined on the basis of evidence furnished, examined and reviewed. ……………
I will [now] address the question of Endowment Mortgages complaints. As under the former (Insurance) Ombudsman Scheme, I investigate complaints involving Endowment Mortgages. Each case we receive is dealt with on its own individual merits. If it is clearly demonstrated when we are investigating them that a Mis-selling had arisen, that it was indicated at the time the policy was sold that a guaranteed amount to repay the mortgage in full would accrue or that a surplus would arise, and if the examination of the documentation and evidence furnished both by the complainant and the financial service provider upholds the complaint and the complaint is made within the statutory time limit as laid down in the Act setting up my Office (i.e. the 6 year time limit laid down in the Central Bank and Financial Services Authority of Ireland Act 2004), an appropriate remedy or compensation will be made.
Note! (EMP5)
As was the case in the United Kingdom, the term ‘Mis-selling’ has no defined meaning in the context of any Irish Legislation, not just in the context of Financial Services Legislation.
But also, as was the case in U.K., the term ‘Mis-selling’ became the ‘one term fits all’ whitewash term used by those within the Financial Services Sector and its Self Regulatory Bodies to divert the attention of the Legal Profession and the Prosecuting Authorities away from what was actually happening —— the systemic, and predominantly Fraudulent, Misrepresentation of investment products to consumers.
The matters listed under ‘What is Mis-selling?’, with respect to the U.K. Regulatory Regime in Section 2.5.7, The Whitewash Road, equally apply to the Irish Financial Services Industry and its ‘Control and Containment’ system of Self Regulation.
Note! (EMP6)
The Irish Statute of Limitations provided for postponement of the limitation period within which a plaintiff could take an action in the case where there was fraud or concealment by the defendant.
Yet, within the provisions of the Central Bank and Financial Services Authority of Ireland Act 2004, the remit of the Office of the Financial Ombudsman Service was contrived to ensure that ‘a consumer is not entitled to make a complaint [to the Financial Services Ombudsman] if the conduct complained of occurred more than 6 years before the complaint is made’ —— this, notwithstanding the status, in Law, of such conduct, i.e. notwithstanding the presence of fraud or concealment by the Financial Services Institution.
(See Section 2.6.6, The Whitewash Imperative, and Section 2.6.7, A Stitch-Up in Time.)
In general to date, both under the former voluntary schemes and my scheme, the complaints fall into two areas — mis-selling at the date of sale or shortfalls in the final or projected outcome.
I will deal with the way we investigate those matters in two areas. One is where the individual policies are held to maturity. I will consider complaints where they are held to maturity.
However, if the complaint is that the product was mis-sold at a date which is more than six years before the complaint was made, the complaint falls outside my statutory remit, which states that the matter must have occurred within six years before the complaint was made. ………………
I will now deal with individual policies surrendered or sold in advance of maturity. Where they have been surrendered or sold in advance by a consumer, no final shortfall has crystallised and, therefore, a complaint to me of failure to pay out in breach of contract may be difficult to sustain. In those circumstances of early surrender or sale, I, as (Financial Services) Ombudsman, will consider complaints of maladministration which are alleged to have taken place within the six years prior to the complaint being made but I cannot investigate or rule on what might have happened had the policy run its full course.
Note! (EMP7)
Notwithstanding the issue of the 6 year time limit, the Financial Services Ombudsman’s contention (here and, to similar effect, below) that where Endowment policies have been surrendered or sold in advance of maturity there is no loss is incorrect. As is his contention that such loss cannot be determined.
The substantive issue, in all cases, as to whether or not there is a case to be answered comes down to what transpired leading up to or at the time of contract / point of sale.
This is the primary issue, notwithstanding whether there has been any subsequent, so-called, maladministration.
Even though a customer / consumer may have sold or encashed his policy prior to maturity, he may still have a valid case with respect to how he was induced to enter into the Endowment Contract in the first place. And, as a result, he may still be entitled to compensation.
And the measure of compensation owed to him would be the financial difference between what he received for his policy on its sale or encashment and the amount by which his Mortgage Loan would have been reduced had the monies he paid against the Endowment Mortgage been paid instead against a Repayment Mortgage. (This measure is the absolute minimum compensation due. There may also be further compensation due following from other consequential loss.)
This is the REAL SHORTFALL. —— And it can be easily computed FOR ANY POINT IN TIME.
I will give the committee some statistics. Approximately 280 complaints about Endowment Mortgages have been received by me and the former Ombudsman (the Insurance Ombudsman) to the end of 2005.
Regarding those investigated by us to date, both under the (previous) voluntary scheme (i.e. the Self Regulatory Insurance Ombudsman Scheme) and by myself, the cases that were upheld were upheld on the grounds of maladministration, not on the grounds of mis-selling. ………………
Note! (EMP8)
These ‘so called’ statistics, as presented by the Financial Services Ombudsman, give a truly warped impression.
There is no acknowledgement within these ‘so called’ statistics of the many means by which both the former Ombudsman for the Credit Institutions and the former Insurance Ombudsman (each of whom was now one of the two Deputy Financial Services Ombudsmen) could, by invoking preclusion clauses within their respective Terms of Reference, summarily reject the submissions of complainants, without any investigation.
There is no acknowledgement within these ‘so called’ statistics of the fact that consumers / customers were not made aware of a hidden clause within the Terms of Reference set by the Credit Institutions that precluded the Ombudsman for the Credit Institutions from dealing with complaints ‘where the complaint is made to the Ombudsman more than six months after it has been responded to by the Senior Official designated to deal with complaints of the institution concerned’.
Bear in mind that an Endowment Mortgage is a credit agreement and, as such, would have come within the remit of both the Insurance Ombudsman and the Ombudsman for the Credit Institutions. Many Endowment Mortgage complainants, including myself, would have been told by the Credit Institution concerned to direct their complaints to the Ombudsman for the Credit Institutions, not the Insurance Ombudsman.
A great many complainants would have been duped by being kept unaware of the existence of this covert preclusion clause within the Credit Institutions Ombudsman’s Terms of Reference.
There is no acknowledgement within these ‘so called’ statistics of the fact that the contrived Terms of Reference set by the Life Assurance / Insurance Industry expressly stipulated that “the Insurance Ombudsman was not empowered to in any way entertain or even comment upon a matter of dispute about Life Assurance referred to it by a consumer, where such dispute concerns the actuarial standards, tables and principles which the Life Assurance Company applies to its insurance business, including, in particular (but without being limited to), the method of calculation of surrender values and policy values, and the bonus system and bonus rates applicable to the policy in question”.
This overriding preclusion clause, set down by the Life Assurance / Insurance Industry within its contrived Terms of Reference, ensured that the vast majority of consumers’ / customers’ grievances could not even be entertained by the Insurance Ombudsman.
These ‘so called’ statistics therefore reflect a very much contrived Universal Set.
(See Section 2.6.5, Control and Containment — Self Regulation: The Ombudsman Schemes.)
Also, as will become clear again and again throughout this website-book, what passed for investigation on the matter of Endowment Mortgages under the Self Regulation Ombudsman Schemes and, to a marginally lesser extent, under the new Financial Ombudsman Service was very superficial indeed.
Deputy Bruton:
The presentations are disturbing at one level. They show that the Regulators were asleep in the early 1990s when an issue that was being actively regulated in the United Kingdom was also occurring here, albeit on a lesser scale, with no Regulation. The people before the committee are not accountable for that but it shows that the Central Bank, which had the responsibility, was never particularly consumer orientated. It shows how far we have come but also that there are people who were hurt because we did not have a more active system in place.
Note! (EMP9)
A person who deliberately avoids looking, or who deliberately covers his eyes —— is not asleep.
The Monkey, with his hands over his eyes, is not asleep.
The second disturbing issue is that, effectively, two serious flaws appear to have been exposed within two years of the legislation going through the House. One is, as Mr. O’Reilly mentioned, the failure to regulate equity release. The second is that the six-year rule seems to be spancelling the opportunity of the people who may have been seriously injured by mis-selling to pursue their case. If there is need for legislative change in this area, I would be willing to promote it in the Dáil on behalf of my party if there is a question of delay in the parliamentary draughtsman’s office or anywhere else in getting it through the system. This committee would welcome draft amendments being tabled on either the six-year rule or the potential mis-selling of these equity release products. The committee could act to try to drive them through the system quickly. The system of drafting can be extraordinarily slow and these should be fast-tracked.
In the United Kingdom there has been considerable evidence of breaching selling Codes and this has triggered an amount of compensation activity.
What UK Code was breached that triggered substantial compensation and were the same selling practices in place in Ireland when the same products were being sold, even though we did not have a code?
Was the same unsatisfactory selling in practice here?
My reading of the document is that it is a Catch-22 for somebody who was mis-sold. (This document was, presumably, Mr. O’Reilly’s letter to the Committee, setting out the ‘details’ with respect to the position on Endowment Mortgages in Ireland, as referred to in the beginning of Mr. O’ Reilly’s opening statement.)
They must wait until maturity which, by definition, will be more than six years since they were mis-sold. If they try to deal with the case before maturity, it cannot be heard. They seem to be caught regardless of which way they go, according to page 4 of the document. If mis-selling occurred in the period 1989 to 1992, which is when all this was sold, there is virtually no way it can be explored.
Does that signal a flaw in the way we have legislated?
Note! (EMP10)
The flaw, as Deputy Bruton describes it, is a contrivance of Irish Financial Services Legislation and Regulation.[See Note! (EMP11) below.]
Allied to this, it appears from the material given to the committee by Mr. O’Reilly that in the United Kingdom the companies voluntarily agreed to submit pre-regulation cases to the (U.K.) Ombudsman for adjudication.
I am wondering if Mr. O’Reilly has approached companies to see whether they would agree to voluntarily submit to the (Irish Financial Services) Ombudsman’s Office, even though this six-year rule appears to be frustrating our capacity. Presumably, in some cases the same parent companies were selling the products in both jurisdictions.
There is one matter in our system that strikes me as being different from that in the United Kingdom. According to the appendix to Mr. O’Reilly’s letter, in the United Kingdom once one discovers that the product will seriously underperform and one is notified of that, one has three years to make a complaint.
In the Irish case, however, it seems that one must go back to when the product was originally sold, which is beyond the Statute of Limitations.Why are Irish consumers being put in a worse situation than UK consumers in trying to defend their position against alleged mis-selling? Are we far off the game in giving consumers adequate defences?
Note! (EMP11)
First, to correct the (presumably unintended) error in Deputy Bruton’s last statement above: the time when the product was originally sold is not beyond the Statute of Limitations; it is beyond the (contrived) 6 year time limit set to the remit of the Financial Ombudsman Service in the Central Bank and Financial Services Authority of Ireland Act 2004.
—————–
The situation in Ireland with respect ‘the six year rule’ may be summarised as follows:
Under the Irish Statute of Limitations, actions founded on simple contract, and actions founded on tort, could not be brought before the courts after the expiration of six years from the date on which the cause of action accrued. (See Section 2.9: The Time Limit for Legal Action.) But the Act also provided for postponement of the limitation period in the case of fraud, concealment or mistake. In such circumstances, the period of limitation (i.e. the six years) did not begin to run until the plaintiff had discovered the fraud or could with reasonable diligence have discovered it.
However, the influence of the Financial Services Sector on the Legislative decision makers within the Irish legislature had been such that:
| (1) | It had been ensured that, for those engaged in Financial Services activities in Ireland, no conduct was ever categorised as fraud or as fraudulent misrepresentation.It had been ensured that specific provisions were set down within Financial Services Regulations, describing conduct, that would or could constitute fraud or fraudulent misrepresentation in Common Law or Criminal Law, and classifying such conduct as merely being a breach of those Regulations. In other words, it had been ensured that fraudulent misrepresentation by those engaged in Financial Services activities in Ireland was whitewashed. |
| (2) | It had been ensured that the full extent of the provisions within the Irish Statute of Limitations with respect to the postponement of the limitation period in the case of fraud, concealment or mistake, did not translate into any to-similar-effect postponement of the ‘time limit’ provisions within Financial Services Legislation and Regulation.It was of paramount importance to those within the Financial Services Industry that there be no mention whatsoever of fraud or concealment within any proposed Legislation or Regulation provisions; they had to ensure that there would be no means of postponement of the 6 year limitation period. |
| (3) | It had been ensured that the Legislation setting up the Office of the Financial Services Ombudsman (i.e. the Central Bank and Financial Services Authority of Ireland Act 2004) was not given statutory effect until such time that the fraudulent misrepresentations (now whitewashed to something to which the ‘postponement of the limitation period’ provisions of the Statute of Limitations could not be applied) would be time-barred (being beyond the contrived 6 year retrospective remit set for the Financial Services Ombudsman within the new Legislation and Regulations). |
This, then, is the Signal Flaw ‘in the way we have legislated in Ireland’ that Deputy Bruton was trying to elicit from the Regulator (see above).
By a devious contrivance of Financial Services Legislation and Regulation, it had been ensured that, with respect to all their past conduct, there would be no redress or retribution following from the pervasive fraudulent misrepresentations by which those within the Financial Services Sector had enriched themselves over many preceding years at the expense of customers / clients / consumers.
(See Section 2.6.6, The Whitewash Imperative, and Section 2.6.7, A Stitch-Up in Time.)
—————–
Again, to correct any ‘error of interpretation’ imparted by the Financial Regulator to the Joint Committee with respect to the U.K. position, where it could be mistakenly interpreted (from Deputy Bruton’s stated understanding of the U.K. position as related in Mr. O’Reilly’s letter) that the cause of complaint was linked to underperformance of the Endowment Mortgage Fund, the actual situation for U.K. consumers is set out below. Such ‘error of interpretation’ follows from a blurring of separation between cause and effect.
—————-
Now! Contrast the actual situation for U.K. consumers!
The ’cause of complaint‘ for U.K. consumers was exactly the same as for Irish consumers: the conduct of the Financial Services Institutions and their Intermediaries at the point of sale / time of contract.
The only difference is that there was concerted effort by the U.K. Financial Services Authority and Financial Ombudsman Service to impart some justice to the situation.
Under U.K. Statute, as under Irish Statute (see above), there is provision for postponement of commencement of the limitation period in the case of fraud, concealment or mistake.
Under the U.K. Limitation Act, therefore, the 6 year period of limitation does not begin to run until the plaintiff has discovered the fraud or could with reasonable diligence have discovered it.
Consumers in the United Kingdom had been induced to enter into Endowment Mortgage contracts by systemic fraudulent misrepresentations (predominantly by way of concealment effected by the deliberate breach of duty to disclose material information).
This meant that this postponement provision with respect to commencement of the limitation period would apply.
The U.K. Financial Services Authority (and the Management Personnel of the Financial Institutions / Life Assurance Companies) were fully aware that this was the situation.
To avoid the appalling vista that would follow from exposure of the systemic frauds prevalent within the U.K. Financial Services Sector (see Section 2.5.8: The Appalling Vista) and to ensure that it retained control of the situation going forward, the Financial Services Authority (FSA) took action.
From January 2000, the FSA issued various Factsheets to inform consumers as to ‘what might constitute a compensatable cause for complaint’.
But, notwithstanding the many Factsheets issued, it could not be conclusively contended that, in all cases those, who had been sold Endowment Mortgages had been informed that they may have grounds for compensation.
It could not be conclusively contended that the latest date for the Time of Discovery with respect to all complaints had been reached.So, from October 2003, the FSA embarked on an extensive advertising campaign to further highlight the matter.
This ensured that a SET TIME was established that, it could be subsequently argued, was the latest time by which consumers should have become aware that they may have a ’cause of action’ (for an action through the courts) or a ’cause of complaint’ (for a complaint submitted to the Financial Ombudsman Service).
It could be reasonably argued, with respect to any subsequent court action or with respect to any complaint submitted to the Financial Ombudsman Service, that this established SET TIME was, or should be, the latest Time of Discovery.
Crucial to maintaining control, the U.K. Financial Services Authority empowered the Financial Ombudsman Service to address these complaints.
However, complainants who wished to have their grievances resolved by the Financial Ombudsman Service had to submit their complaint within a 3 year limit from the time of discovery of the cause of complaint.
The 3 year time limit to having consumers complaints submitted to the Financial Ombudsman Service was in conformity with the U.K. Statute of Limitations to expedite closure on the matter for the Financial Services Industry.
But bear in mind that this did not negate the Statute of Limitations postponement provisions, in the case of fraud or concealment, with respect to the 6 year limit from Time of Discovery for taking an action through the courts!
The financial findings of Mr. O’Reilly’s survey were interesting but what was missing was an analysis of the sales techniques, the way in which these were presented and the extent to which the survey showed the potential.
We all know products can go wrong, but were these mis-sold?
I do not see in the survey report any analysis of that CRUCIAL ISSUE.
I would also like to ask Mr. Meade a question about this. I do not know how many of the 280 endowment mortgage cases have been upheld. Did he uphold 36% or whatever the average was? Will he tell us how many such cases he upheld and describe what sort of maladministration he found in those cases? Such knowledge is publicly required for those who will face significant shortfalls on these products. They need to know what things they should look out for that could provide grounds for some level of compensation for what has happened. ………….
I was surprised to see that no mis-selling case has been upheld.
I would be interested to know if that was because of the six-year Statute of Limitation or because Mr. Meade was satisfied that no mis-selling occurred.
Note! (EMP12)
While this absence from the survey report of any analysis of ‘the sales techniques, the way in which Endowment Mortgages were presented’, could be seen as a further manifestation of its genetic ‘Three Monkeys’ syndrome by the Irish Financial Services Regulatory Authority, it is most likely to have been a contrived omission.
We have previously seen (in Section 2.6.7, A Stitch-Up in Time) where:
IF you want to contrive that a particular response is validly received,
THEN make sure that a specific question is posed that facilitates the eliciting of that response.
Here we see where:
IF you want to avoid the answer, THEN don’t ask the question.
IF you want to contrive that a Crucial Issue is not addressed within a Questionnaire,
THEN make sure that there are no questions within the Questionnaire that relate to that Crucial Issue.
If the Regulatory Authority carried out a true analysis of the pre-contract representations, it would have exposed the Systemic Fraud by which those within the Financial Services Sector induced consumers / customers to enter into Endowment Mortgage contracts.
But such a true analysis could be avoided by the Irish Central Bank and Financial Services Authority by the deliberate omission of questions that would have exposed the systemic and deliberate breach of fiduciary duty perpetrated by those within the Irish Financial Services Sector.
Mr. O’Reilly(Financial Regulator):
I will take the first question and the one about the analysis of sales techniques, how it was in the United Kingdom and what the evidence was.
The evidence was really about the Requirements that were put on sales people to record how the product was sold. As a result of this, or the lack of such recording, the UK authorities were able to have documentation, or there was a lack of documentation where such was required.
Unfortunately, in Ireland there are no such Codes providing for Statutory Requirements and as a result the problem is one of evidence. ………………
Note! (EMP13)
We have contended above (see EMP12) that the absence from survey report of an analysis of ‘the sales techniques, the way in which Endowment Mortgages were presented’ is most likely to have been a contrived omission on the part of the Irish Financial Services Regulatory Authority.
Here we see a classic ‘straw man’ response by the Irish Financial Regulator, Mr. O’Reilly, to Deputy Bruton’s challenge on this, the CRUCIAL ISSUE that had not been addressed by the Regulatory Authority’s ‘so called’ survey.
Mr. O’Reilly first sets up the fiction that he is going to address the CRUCIAL ISSUE as set down by Deputy Bruton.
The Fundamental Rightsset down in Article 40 of the Irish Constitution include the following :–
- All citizens shall, as human persons, be held equal before the law.
- The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
- The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.
1. Mr. O’Reilly first includes Deputy Bruton’s CORE ISSUE challenge within the on ing as the proclaims, in one
above.)Mr. O’Reilly ‘ survey were interesting but what was missing was an analysis of the sales techniques, the way in which these were presented and the extent to which the survey showed the potential.
Mr. O’Reilly then presents a fiction This response by the Regulator is a whitewash of ‘The United Kingdom Position’ and, as a consequence, of ‘The Irish Position’.
The United Kingdom Position
The primary evidence APPLIED against the U.K. Financial Services Institutions and Investment / Mortgage Intermediaries came down to the simple fact that they were unable to show that they had fulfilled their fiduciary duty.
Remember that the fiduciary (the person in whom the confidence is reposed) cannot hold the other party to the contract unless he SATISFIES the court that it is advantageous to the other party — AND — that he has disclosed all material facts within his knowledge.
The primary evidence APPLIED against the U.K. Financial Services Institutions and Investment / Mortgage Intermediaries was that they were not able to provide objective evidence that showed:
| — | that, having regard to the customer’s individual circumstances, an Endowment Mortgage (when compared to a Repayment Mortgage) was in the customer’s best interests. |
| — | that they had disclosed all relevant information to the customer. |
The fact that the Common Law fiduciary duties incumbent upon the Financial Services Institutions and Investment / Mortgage Intermediaries were codified as Requirements within Financial Services Rules governed by U.K. Statute does not negate the status of this primary evidence.
The fact, that there were Rules governed by U.K. Statute that required the U.K. Financial Services Institutions / Intermediaries to keep records of the ‘advice given’ and ‘information disclosed’, is wholly secondary.
The sole purpose of the U.K. Statutory Requirements that records be kept was to ensure that the U.K. Financial Services Institutions and Intermediaries protected themselves: it was to ensure that they would be able to provide objective evidence that they had complied with their fiduciary duties.
The Irish Position
For the Irish Financial Regulator to say that ‘the problem is one of evidence’ is a whitewash of Law.
That the Irish Financial Regulator should represent the wholly secondary evidence of the U.K. Requirements to keep records as being the determining factor in the cases against those in the U.K. Financial Services Sector is a complete whitewash of the primary evidence status of their not being able to prove that they had fulfilled their fiduciary duties.
The existence or non-existence of Codes (within the Irish Regulatory System) setting down a Statutory Requirement to keep records is wholly irrelevant.
The Irish Financial Regulator’s distorted representation of what actually transpired in the U.K. ensured denial of the glaring primary evidence that the Irish Financial Services Institutions and Investment / Mortgage Intermediaries were not able to show that they had fulfilled their fiduciary duty.And, of even greater import, it ensured dissuasion from any inquiry by the Joint Committee into what had actually happened in Ireland, the systemic and deliberate breach of fiduciary duty by those within the Financial Services Sector. —— It effected concealment of Systemic Fraud.
See ‘RECORDS! RECORDS! RECORDS!’ in Section 2.3.4(a), The Duty to Disclose and Silence as a Misrepresentation.
Note! (EMP14)
There was no mis-selling case upheld, simply because there was never any true investigation of what transpired at the time of contract / point of sale.
This will be clearly evidenced by what is exposed in the website-book.
(Again, to correct the unintended error in Deputy Bruton’s last statement above: the ‘six year Statute of Limitation’ being invoked is that set to the remit of the Financial Ombudsman Service in the Central Bank and Financial Services Authority of Ireland Act 2004, and NOT from the Irish Statute of Limitations.)
Deputy Bruton:
Is Mr. O’Reilly saying the same sales practices were in place in Ireland, but the only problem was that there was no obligation to collect evidence of wrongdoing?
Mr. O’Reilly (Financial Regulator):
Not alone that but the problem is that we had no evidence because there was no Requirement to write down exactly how it happened.
Note! (EMP15)
The whitewash intrinsic to what is here being conveyed as a positive assertion by the Financial Regulator has already been addressed in EMP14 above.
—————-Those in the Financial Services Sector KNOW that they occupy a position of Trust with respect to every customer who has dealings with them.
They KNOW that they have a Common Law fiduciary duty, with respect to how they conduct their affairs, to act in the best interests of those customers at all times.
When those in the Financial Services Sector adopt a policy such that they do not keep valid records of their disclosures (i.e. the ‘advice given’ and ‘information provided’), they set up an environment that facilitates, encourages and effectively condones the perpetration of and collusion in fraudulent practices.
Those in the Financial Services Sector KNOW that by adopting a policy of not keeping of valid records they will ensure concealment of everything —— all disclosures and all non-disclosures.
They KNOW that by adopting such a policy, they are facilitating the perpetration of fraudulent practices against the very people who have reposed their trust in them.
They KNOW that they are engaging in a course of action that is very much set against the best interests of their customers.
But to engage in such a course of action must also be seen for what it is: a deliberate act of concealment.
It must be seen as act of Fraud, in itself.
And the consequent issue that should be addressed is whether there is evidence of dishonest intent on the part of those in the Financial Services Sector.
In reducing the problem to ‘there is no evidence because there was no Requirement to write down exactly how it happened’, the Financial Regulator has chosen to turn a blind eye to the deliberate breach of fiduciary duty by those in the Financial Services Sector.
In so doing, he has given effect to the concealment of this deliberate breach of fiduciary duty.
AND he has even further ensured dissuasion of inquiry by the Joint Committee into the Systemic Fraud pervading the Irish Financial Services Sector.
Mr. O’Reilly (Financial Regulator) (continued from above):
I am saying, however, that the case is not closed. One of the points we should emphasise is that customers will be contacted directly in April. For the first time, 46,000 customers will be told what the avenue of complaint is if there is a shortfall. As a result of that we will be gathering evidence.
Deputy Bruton:
There is no avenue of complaint if what Mr. Meade says about the six-year rule is correct.
Mr. O’Reilly (Financial Regulator):
I will let Mr. Meade go through exactly what the avenue is. My understanding is that if the policy has yet to mature, there is an avenue of complaint but I will let Mr. Meade talk about that matter.
Deputy Bruton:
Is Mr. O’Reilly satisfied there is prima facie evidence that some mis-selling occurred in Ireland ?
Mr. O’Reilly (Financial Regulator):
We have no prima facie evidence and no documentary evidence whatever.
We only have records of conversations but we have no other evidence whatsoever. Part of the evidence that Mr. Meade is describing is that 280 cases have come before him and none of them was upheld on the basis of the original mis-selling.
Note! (EMP16)
MARK THIS WELL !
Deputy Bruton’s question, ‘Is Mr. O’Reilly satisfied there is prima facie evidence that some mis-selling occurred in Ireland?’, again cut straight to the CRUCIAL ISSUE that the Joint committee wanted the Regulator to address. (See EMP12 above.) This was a question that demanded no ambiguity with respect to the response.
The statement in reply from Mr. O’Reilly, the Financial Regulator, was clear and decisive:
‘We have no prima facie evidence and no documentary evidence whatever.’
This POSITIVE STATEMENT by the Financial Regulator was the ‘fell blow’ that effectively killed off the prospect of there being any further inquiry by the Joint Committee (or anyone else) into what had transpired.
This positive statement by the Financial Regulator had very serious consequences for Irish consumers / customers in respect of their past dealings with Financial Services Institutions and Investment / Mortgage Intermediaries.
The veracity of this statement by the Financial Regulator therefore warrants serious scrutiny.
Black’s Law Dictionary defines:Prima Facie Evidence —— evidence that will establish a fact or sustain a judgement, unless contradictory evidence is produced.
Documentary Evidence —— evidence supplied by a writing or other document, which must be authenticated before the evidence is admissible.
Primary Evidence (Best Evidence) —— evidence of the highest quality available, as measured by the nature of the case rather than the thing being offered as evidence.
No Prima Facie Evidence ?
We have already shown above how Mr. O’Reilly (the Financial Regulator), in his representations to the Joint Committee, engaged in a whitewash of the actual situation with respect to the sale of Endowment Mortgages in Ireland:
| —— in EMP2, where he effected a denial of any legal status to the Code of Conduct for Insurance Intermediaries issued by the Insurance / Life Assurance Industry, | |
| —— in EMP12, where there was a deliberate avoidance (within the Regulator’s Questionnaire survey) of questions that could have exposed the sales techniques used and how Endowment Mortgages were presented, questions that, if answered truthfully and assessed collectively, would have provided objective evidence that there was a systemic and deliberate breach of fiduciary duty by those within the Financial Services Sector, | |
| —— in EMP13, where, by his distorted representation that the wholly secondary evidence of the U.K. Requirements to keep records was the determining factor in the cases against those in the U.K. Financial Services Sector, the Regulator ensured denial of the glaring primary evidence that the Irish Financial Services Institutions and Investment / Mortgage Intermediaries were not able to show that they had fulfilled their fiduciary duty, | |
| —— and in EMP15, where, by reducing the problem in Ireland to there being ‘no evidence because there was no Requirement to write down exactly how it happened’, the Financial Regulator effected concealment of the deliberate breach of fiduciary duty by those in the Financial Services Sector. |
The FACT was that the Irish Financial Services Institutions and Investment / Mortgage Intermediaries could not show that, in respect of Endowment Mortgage Contracts, they had disclosed all material facts to their customers.
They could not show that they had fulfilled the fiduciary duty owed to their customers.
This FACT was well known to the Mr. O’Reilly, the Irish Financial Regulator —— for it was he who represented the fact that there had been no records kept by those in the Financial Services Sector of their dealings with customers as the persuasive reason for there being no evidence available.
But this FACT, of itself, constitutes prima facie evidence.
For this FACT, of itself, would be sufficient to sustain a judgement in Court against the Financial Services Institution or Investment / Mortgage Intermediary concerned —— and it is a fact that CANNOT be contradicted.
(See Section 2.3.4: The Duty to Disclose and Silence as a Misrepresentation, (a) Where a Fiduciary Relationship or Special Relationship exists.)
Not only that, but, as we have already shown, the pervasive practice within of the Irish Financial Services Sector, of ‘not keeping valid records of dealings with customers’, evidenced a systemic and fraudulent disregard for fiduciary duty.
This too was prima facie evidence, not just of the fraudulent breach of fiduciary duty itself, but also of the deliberate concealment from their customers / consumers of facts (the disclosures and non-disclosures) relevant to their right of action.
And, again, the effective denial by the Financial Regulator of this deliberate concealment of facts relevant to their right of action, ensured that the postponement provisions of the Statute of Limitations, in the case of fraud or concealment, would not come to the knowledge of the wronged party, the customer / consumer.
(See Section 2.9: The Time Limit for Legal Action.)
No Documentary Evidence ?
Endowment Mortgages were generally represented to customers / consumers in a comparison format Quotation, where, for the particular Mortgage amount, the figures for the Endowment Mortgage were tabulated alongside the corresponding figures for the Repayment Mortgage.
This comparison format representation of Endowment Mortgages to customers / consumers was exactly as described below by Mr. Meade, the Financial Services Ombudsman, where he states:
“the documentation indicated that the Annuity calculation was done
and the Endowment calculation was done”
The Mortgage Quotation document presented to me pre-contract was typical of what was represented to customers / consumers —— see Case 1 of Appendix 1/2.
Note! Such Mortgage Quotations can be generated in minutes for any individual consumer’s / customer’s (or couple’s) circumstances by every Financial Service Institution / Life Assurance Company, by their simply inputting the loan parameters applicable at the particular point in time for when the Mortgage Quotation is required.
The Mortgage Quotation document presented to each and every customer / consumer therefore presents documentary evidence of the highest quality available —— it is primary evidence that is wholly FACTUAL in nature.
Anyone with a knowledge of Financial Mathematics who applied himself to an analysis of the financial representations with respect to the Endowment Mortgage versus Repayment Mortgage comparisons used by Irish Financial Services Institutions and Life Assurance Companies in their Mortgage Quotations (primary documentary evidence — and available for each and every customer / consumer) would immediately see that those representations were deliberately false and misleading.
A proper Financial Analysis would show that these Mortgage Quotations were contrived to induce the customer / consumer to choose the Endowment Mortgage and to refrain from choosing the Repayment Mortgage.
A proper Financial Analysis would show that these Mortgage Quotation representations were set to ONE PURPOSE —— to DECEIVE the party to whom they would be represented.
A proper Financial Analysis would show that the Mortgage Quotations represented by Irish Financial Services Institutions and Life Assurance Companies deliberately contorted and ignored the most fundamental principle of Financial Mathematics, The Time-Value of Money.
A proper inquiry by anyone with expertise in the Mathematics of Financial Analysis would therefore have produced Prima Facie Evidence of the highest degree possible:
Primary Evidence that was both conclusive and irrefutable
—— Mathematical Proof.
—————–
In respect of Financial Services Regulation in Ireland, Mr. O’Reilly, as the Chief Executive Officer at the Office of the Financial Regulator, occupied the pinnacle position, the position in which greatest trust was reposed by the Irish Government / Parliament and the Irish people.
Mr. O’Reilly KNEW that it was the Joint Committee’s mandate to ensure that the Central Bank and Financial Services Authority of Ireland, which included the Office of the Financial Regulator, was being operated in a manner that best served the interests of the Irish people.
Mr. O’Reilly KNEW that, in performance of this mandate, the Joint Committee’s operation sequence was to first make full and proper inquiry, then consider all facts presented before it, and then make its recommendations to the Government / Parliament in respect of any requirements for new Financial Services legislation or Amendments to existing Financial Services legislation.
Mr. O’Reilly KNEW that, when both he and the Financial Services Ombudsman had been summoned to appear before the Joint Committee on the specific issue of the situation in Ireland with respect to Endowment Mortgages, the information they provided and the representations they made would constitute the full and proper inquiry stage of the Joint Committee’s operation sequence.
He KNEW that, in this regard, the Joint Committee was placing full reliance on him.
Mr. O’Reilly, in liaison with Mr. Meade, the Financial Services Ombudsman, therefore KNEW that the information they provided and the representations they made would be the seminal deciding factor with respect to any further actions being taken by the Joint Committee in respect of legislation to address consumers’ / customers’ grievances on the matter of Endowment Mortgages in Ireland.
Mr. O’Reilly therefore KNEW that, to best serve the interests of the Irish people, the Joint Committee REQUIRED a ‘whole truth presentation’ on the matter.
—————–
Mr. O’Reilly holds an M.Sc. degree in Economics and Statistics and a Ph.D. in Econometrics from Trinity College Dublin. And by this time, when he attended before the Joint Committee, the acknowledged status of Mr. O’Reilly’s expertise was evidenced by his having been the Assistant Director General of the Central Bank of Ireland and by his subsequent appointment as the first Financial Regulator for Ireland.
Further acknowledgement of his expertise in the Mathematics of Financial Analysis and in the legal complexities of Financial Services Regulation would be evidenced after he left the Office of the Financial Regulator:
| • | At the time of his attendance before the Joint Committee (January 2006), Mr. O’Reilly was about to commence a new career in the ‘world of maths and physics’. |
| • | By March 2007, Mr. O’Reilly was a Director of Merrill Lynch International Bank, based at the Irish Financial Services Centre (IFSC). |
| • | By April 2007, Mr. O’Reilly was Chairman of the Irish Chartered Accountants Regulatory Board (CARB). |
| • | By October 2008, Mr. O’Reilly was a Director of Irish Life Assurance. |
Mr. O’ Reilly, the Financial Regulator, therefore possessed expertise in the Mathematics of Financial Analysis to a superlative degree, and he was acknowledged as possessing such expertise.
Any proper inquiry into how customers / consumers were induced to enter into Endowment Mortgage Contracts would, first and foremost, have analysed the ‘FACTS and FIGURES’ as represented by the Financial Services Institutions / Life Assurance Companies in their Mortgage Quotations.
Such proper inquiry would have required someone applying an expertise in the Mathematics of Financial Analysis to interrogate and analyse these FACTS and FIGURES —— with the necessary diligence.
And such proper inquiry would have provided conclusive and irrefutable PROOF that fraudulent misrepresentation was SYSTEMIC to the sale of Endowment Mortgages in Ireland —— not just ‘on the balance of probabilities’ proof —— , not just ‘beyond reasonable doubt’ proof —— but Mathematical Proof —— ABSOLUTE PROOF.
YET, in knowing that the Joint Committee was placing full reliance on him in the discharge of his duty as Financial Regulator, and in knowing that what he said would be the critical influencing factor with respect to the Joint Committee’s decision as to its ultimate course of action, Mr. O’Reilly deliberately abstained from applying his expertise to make such proper inquiry.
While this deliberate abstention, of itself, effected concealment of the fraudulent misrepresentations systemic to the sale of Endowment Mortgages in Ireland, Mr. O’Reilly chose to go ONE STEP FURTHER.
He chose to make a POSITIVE STATEMENT on the matter:
‘We have no prima facie evidence and no documentary evidence whatever.’
When Mr. O’ Reilly, made this Positive Statement to the Joint Committee, he did so in the knowledge that it would be accepted by the Joint Committee that he was bringing the entirety of his knowledge and expertise, and the gravity of his position (as the Financial Regulator representing the Irish State’s Competent Authority), to bear.
He also knew that this Positive Statement on his part was effectively killing off the possibility of any further action by the Joint Committee on the matter.
In the Chapters that follow, we will prove this POSITIVE STATEMENT by the Financial Regulator to be absolutely FALSE.
—————–
And so, ALL who were placing reliance on the Financial Regulator were deceived —— the Joint Committee, the Irish Government / Parliament, and, ultimately, the Irish people.
Mr. Meade (Financial Services Ombudsman):
I wish to clarify three or four matters which Deputy Bruton has raised.
An allegation of mis-selling going back many years is a factor which has to be taken into account.
According to the legislation under which I operate, if a matter has occurred more than six years before the complaint was made, then I cannot consider it.
That is the legislative situation.
I am a creature of the Law and I carry our my duties under the Law.
This aspect was discussed when the legislation was going through the Oireachtas. (This is a gross overstatement of what actually transpired. See Section 2.6.7, A Stitch-Up in Time.)
In the Pensions Ombudsman legislation there is a six-year rule also. There is also a small amendment which refers to a matter of which a person became aware within two years, but nothing before 1996 can be investigated by the Pensions Ombudsman.
Note! (EMP17)
The Pensions (Amendment) Act 2002 was enacted on 13th April 2002.
The Commencement Order giving full effect to the establishment of the Office of Pensions Ombudsman was laid down on 2nd September 2002.
As was the case with respect to the Office of Financial Services Ombudsman (see EMP11 above), the influence of those within the Financial Services / Life Assurance & Pensions Sector was such that it was ensured that the full extent of the provisions within the Irish Statute of Limitations with respect to the postponement of the limitation period in the case of fraud, concealment or mistake, did not translate into any to-similar-effect postponement of the ‘time limit’ provisions within the Legislation and Regulation applicable to Pensions.
While there was a provision within the Pensions (Amendment) Act 2002, whereby a complaint could be made to the Pensions Ombudsman within 3 years (inadvertently stated above as 2 years by the Financial Services Ombudsman) from the time at which the complainant first became aware or ought to have become aware of the cause of complaint, a cut-off date was set at 6 years prior to the passing of Act (i.e. 13th April 1996) in all cases.
It was therefore ensured that, with respect to all their past conduct, there would be no redress or retribution following from the fraudulent misrepresentations (most particularly by way of the deliberate breach of fiduciary duty) by which those within the Financial Services / Life Assurance & Pensions Sector who sold Pensions products had enriched themselves over many preceding years at the expense of customers / clients / consumers.
Many of the complaints are based on what was allegedly said many years ago and that can be difficult to verify.
However with the passage of time the contractual documentation is very important, including the advisory booklets and all that was signed up to.
In most of the complaints that have come before me, the documentation has indicated that the Annuity (Mortgage) calculation was done, the Endowment (Mortgage) calculation was done, the (advisory) booklets and contract (documentation) indicated that investments could rise or fall, and there was no guaranteed minimum which would arise in the end. …………
Note! (EMP18)But neither the Financial Services Ombudsman, nor his predecessors under the Self Regulatory Regime (i.e. the Insurance Ombudsman and the Credit Institutions Ombudsman, who were now his two Deputy Ombudsmen) ever saw fit to fully interrogate the veracity of the representations made in these Mortgage Quotation documents or the true position with respect to the non-disclosure of material information to customers / consumers.
There was never any proper Financial Analysis of the positive statements (representations) made by the Financial Services Institutions / Life Asssuranse Companies in their Mortgage Quotation documents was ever undertaken.
Such a proper Financial Analysis of the positive statements made in these Mortgage Quotation documents would have exposed SYSTEMIC Fraudulent Misrepresentation.
Such a proper Financial Analysis of the positive statements made in these Mortgage Quotation documents would have exposed SYSTEMIC Dishonesty.
Dishonesty is not something that is only to be understood by the learned few !
One does not require judicial or legal expertise to be able to decide: ‘What Is and What Is Not —— Dishonest’.
(See The People v Grey and The Crown v Feely in Section 2.3.6: Fraud and the Conman.)
————————-
Also, there was never any proper inquiry into the true legal position with respect to the non-disclosure of material information to customers / consumers prior to or at the time of contract.
There was never a truly diligent application of legal expertise.
It must be remembered that the Office of the Financial Services Ombudsman was possessed of very considerable legal expertise indeed.
Both of the Deputy Financial Services Ombudsmen, Caroline Gill (who was formerly the Insurance Ombudsman) and Gerry Murphy (who was formerly the Ombudsman for the Credit Institutions) were Barristers at Law.
While they could, lamely, contend that they were gagged in their former roles by the constraints imposed by their respective Terms of Reference, there was no such constraint set to the application of their legal expertise imposed by the Office of Financial Services Ombudsman.
Such a proper inquiry with the diligent application of legal expertise would have elicited the primary evidence that the Irish Financial Services Institutions / Life Assurance Companies, and their Investment / Mortgage Intermediaries, could not show that they had fulfilled their fiduciary duty.
Such a proper inquiry with the diligent application of legal expertise would have elicited the primary evidence that, by deliberately not keeping valid records of their disclosures, the Irish Financial Services Institutions / Life Assurance Companies and their Intermediaries, had effected a deliberate act of concealment of all disclosures and non-disclosures that amounted to a fraudulent breach of fiduciary duty.
AND, such a proper inquiry with the diligent application of legal expertise would have elicited the primary evidence that this fraudulent breach of fiduciary duty effected the deliberate concealment from their customers / consumers of facts(the disclosures and non-disclosures) relevant to those customers’ / consumers’ right to take legal action.
(See Section 2.9: The Time Limit for Legal Action.)
(See also EMP14, EMP15 and EMP16 above.)
Our policy is that if an Endowment Mortgage is sold or cashed in before the end of the period, there is no loss on that and we do not rule on it. However, Endowment Mortgages can go up and down and we do not know exactly what the final loss will be until the end.
(NOT TRUE ! — See EMP7 above.)
In the United Kingdom the decision was taken by the Financial Services Authority, in co-operation with the (U.K) Financial Services Ombudsman, where companies agreed that they would pay compensation.
As fact-finding and Codes have been in place (in the U.K.) since 1988 (the U.K. Financial Services Act 1986 came into effect from 29th April 1988), cases could be submitted to the (U.K.) Ombudsman where a potential loss arose and he could rule on it.
Note! (EMP19)‘As fact-finding has been in place (in the U.K.) since 1988‘
This is NOT the Case !
Following the enactment of the U.K. Financial Services Act 1986, the Securities and Investments Board (SIB) introduced the Financial Services Conduct of Business Rules.
To maintain self-regulatory control, the Self Regulating Organisations, LAUTRO and FIMBRA, duly altered their Conduct of Business Rules in conformity with the ‘safeguard’ stipulations of the Act. (See Section 2.5.2 and Section 2.5.3.)
In 1994, the Life Assurance and Investment Management Regulatory Organisations merged to become the Personal Investment Authority (PIA).
In 1995, the Personal Investment Authority, in turn, adopted the LAUTRO and FIMBRA Rules into the PIA Rules.
The U.K. Regulatory Regime was such that dealing with consumers’ complaints, and enforcement of the Regulations on the conduct of investment business, remained under the direct control of the Self Regulating Organisations, LAUTRO and FIMBRA, and, following the merging of these Organisations in 1994, the PIA.
In October 1997, largely following from the so-called Personal Pensions Scandal, the U.K. government reformed the supervision of the Financial Services Industry by establishing a single regulator, the Financial Services Authority (FSA).From 1998, the FSA, itself, undertook firm-based supervisory activity on behalf of the PIA.
But, while it now did so under the supervision of the FSA, the PIA still retained control with respect to dealing with consumers’ complaints and with respect to enforcement of the Regulations.
Throughout all this time, there had been a persistent clamour of protest in the United Kingdom on the matter of the unfairness of Endowment Mortgage Contracts, with the means by which consumers were induced to enter into such contracts being a matter of particular dispute —— but NOTHING was done to address the matter.
It was not until the summer of 1999 that the FSA, itself, finally took action.
During the summer and autumn of 1999, the FSA (ostensibly on behalf of the PIA) undertook a series of targeted supervisory visits to participants in the Endowment Mortgage market –––– both product providers and independent financial advisors.
In December 1999, following from the findings of those visits, the PIA and the FSA, jointly, issued a public warning on the matter.SO, although the provisions of the U.K. Financial Services Act 1986 had been given full statutory status since December 1988, on the matter of the situation in the U.K. with respect to Endowment Mortgages,
–– it was not until December 1999 that the first fact-finding was in place.
However, most of his (the U.K. Ombudsman’s) rulings have been on the basis that they were sold to elderly people and that the products were not suitable for the individuals concerned.
Note! (EMP20)This also — is NOT the Case !
The impression being given by the Financial Services Ombudsman here (and again below, where he draws particular attention to the fact that in the U.K. many of the Endowment Mortgages were sold to elderly people for whom they were in no way suitable) is that this was a primary issue on which most of the U.K. Ombudsman’s rulings were decided.
This is a false impression.
From the very outset, the primary determinant factors with respect to justifiable cause of complaint to and subsequent rulings by the U.K. Financial Ombudsman Service was the misconduct (whether deliberate or otherwise) of the party selling the product: the failure to disclose material information, most particularly with respect to the Risks involved, and the fact that it could not be shown that the Endowment Mortgage was the most advantageous product for the particular customer / consumer.
In application of such determinant factors, the ruling would go against the offending Financial Services Institution / Life Assurance Company / Mortgage Intermediary, REGARDLESS of the AGE of complainant.
The only difference with respect to the so-called mis-selling (deliberate breach of fiduciary duty) that the sale of Endowment Mortgages to elderly persons makes is that the disregard for their interests is MUCH MORE BLATANT.
Mr. Meade, the Irish Financial Services Ombudsman, has here (and again below) set up a straw man representation of the argument to isolate and give particular attention to AGE as a primary determining factor with respect to rulings by the U.K. Ombudsman is a far cry from a ‘whole truth’ presentation.
This was a serious misrepresentation to the Joint Committee with respect to the facts of the situation in the U.K.
Deputy Bruton:
Mr. Meade has been able to shoehorn compensation on a technicality because the companies failed to comply with the post-1995 ——
Mr. Meade (Financial Services Ombudsman):
No.
Deputy Bruton:
—— but the original mis-selling ——
Mr. Meade (Financial Services Ombudsman):
The original mis-selling is statute barred.
Even if the rule was changed in the morning, unless there is hard evidence, I will not find in favour of mis-selling.
I would hate it to go out from this committee that because of amending legislation, everything would be investigated by me and that people’s hopes would be raised falsely by saying that the (Financial Services) Ombudsman would find in their favour.
One must have hard evidence. ……….
Note! (EMP21)
To avoid any possibility of misinterpretation with respect to the term ‘hard evidence’ — be clear that it is nothing more than evidence that actually exists, as distinct from evidence of a conjectural nature.
By this point in time, there was an overwhelming body of ‘hard evidence’ against the Irish Financial Services Institutions / Life Assurance Companies and their Investment / Mortgage Intermediaries on the matter of how customers / consumers had been (fraudulently) induced to enter into Endowment Mortgage Contracts.
BUT, the Regulatory Authorities chose NOT TO LOOK AT the ‘hard evidence’ they had, and NOT TO LOOK FOR the ‘hard evidence’ that could be easily acquired.
We have already shown, in EMP16 and EMP18 above, how, on the basis of their applying due diligence (in application of financial analysis expertise and in application of legal expertise) to the factual information they had, the respective Regulatory Authotities had irrefutable primary evidence against Irish Financial Services Institutions / Life Assurance Companies and their Investment / Mortgage Intermediaries. Yet, they chose not to make the proper inquiries that would have elicited this irrefutable primary evidence.
There was also an overwhelming body of ‘hard evidence’ available by way of Motgage Quotations, and the many brochures and advisory booklets, setting down the representations by the respective Financial Services Institutions and Life Assurance Companies with respect to their Mortgage products. (The Financial Services Ombudsman, himself, referred to his having sight of such representations. —— See EMP18 above.)
All this ‘hard evidence’ was available to the Office of the Financial Services Ombudsman (and the Financial Regulator), or it could be easily acquired with the minimum of effort.Bear in mind also that the former Credit Institutions Ombudsman and the former Insurance Ombudsman were now the two Deputy Financial Services Ombudsmen. The Office of Credit Institutions Ombudsman had been in existence since October 1990 and the Office of the Insurance Ombudsman had been in existence since March 1992.
Again, any proper application of due diligence in respect of legal expertise and financial analysis expertise would have shown (as we will show in this website book) that the representations made in these brochures / advisory booklets to induce the customer / consumer to choose an Endowment Mortgage in preference to a Repayment Mortgage were deliberately misleading.
Deputy Bruton:
We have no reason to believe better selling practices were in place in Ireland than the United Kingdom which ultimately fell foul because it had evidence gathering.
Mr. Meade (Financial Services Ombudsman):
It is quite significant that the level sold in the United Kingdom was massive and it continued on until the late 1990s. Many of them were sold to elderly people for whom they were in no way suitable. ……………… (See EMP20 above.)
I caution members not to raise false expectations. The overall shortfall (in Ireland) is, relatively speaking, quite small in the overall context of a house bought in 1988 and put on the market today. It is €2,500 or €3,300. There has been an increase in property prices since then. If it is a major problem, then there is a need for the industry, the Department of Finance, the Financial Regulator and me to work out what could be a comparable way. ……
Note! (EMP22)
As already related in EMP1 above, here was no interrogation of the veracity of the information being provided by the Financial Services Institutions (i.e. those who chose to respond to this Questionnaire).
there was no The contention by the Financial Services Ombudsman eh Significant! In Ireland all data comes from the FIs / LA Cos, who have a vested interest (reword) in downplaying the situation
For example, the stated average projected shortfall for Endowment Mortgage Funds seemed unbelievably low at €3,810, but this was not contested or interrogated by the Financial Services Regulatory Authority. Nor was there any independent assessment of these figures.There was no interrogation of THE CORE ISSUE of how these Endowment Mortgages were originally represented to customers / clients / consumers at the time of contract / point of sale.
There was no interrogation of the shortfall with respect to what was originally represented to customers / consumers at the time of contract / point of sale, i.e. the shortfall with respect to the projected End Value total of the ‘Mortgage Loan Amount plus the Projected Surplus’.
Also, the survey was effectively limited to what the respective Financial Services Institutions chose to interpret as being Endowment Mortgages: there was no inquiry with respect to the existence and extent of similarly structured and misrepresented Investment Mortgages or Annuity Mortgages (Repayment Mortgages) that promoted ‘in tandem’ investment in a Savings product.
A red herring / whitewass / diversion from the substantive fact — systemic fraudulent misrepresentation, both positive fr misr and by deliberate silence, i.e. non disclosure where a fiduciary duty to disclose exists.
— no outside objective interrogation.
straw man red herring
Mr. O’Reilly:
I wish to add a statistic for the benefit of the committee. In 1998, one third of all mortgages sold in the United Kingdom were endowment mortgages, whereas in Ireland it was approximately 3%. Compared with the United Kingdom, it was a practice which started and stopped very early in Ireland.
Note! (EMP23)
Name change — old wine in new bottles — all is rosy — an irish solution to keep the commission gravy train rolling
Deputy Burton:
….. I wish the Financial Regulator well and thank him for all the times he appeared before the committee.
The Financial Regulator’s loss will be a gain for the world of maths and physics. ………………
Note! (EMP24)
For me personally, this was the most shocking revelation —- as a mathematician at heart, this, for me, transformed the FR’s positive statement that ‘Prima …’ into nothing short of outrageous — a confirmation of positive concealment by the FR — a positive statement by someone with knowledge.
Remember mathematical proof is absolute proof —- a deliberate non-application af his expertise even at its most basic level.
REWORD CAREFULLY!
The 5 Imperatives. (Check the order in which stated and revealed!)
??? any forward back references ??? any forward reference to what will be revealed, or just do a global explanation !!
May Back reference to this Section where prima Fascie revelations made throughout the book.
Mr. O’Reilly:
To return to the …. endowment policies (shortfall) issue …., it is a significant move that we are requiring, and are talking to the industry about providing information to the 46,000 endowment mortgage holders. It is important to say that one of the items of information with which we will be providing them would be the alternatives available — in other words, how to encash their policies.
Note! (EMP25)
**************Letter issued Quote ****
Deputy Ó Caoláin:
……………… Many were taken in by the Endowment Mortgage product, particularly when it was at its most popular. It was actively promoted and there are many who will yet experience financial difficulties when the maturity fails to meet the mortgage outstanding at that time. There will be a continuum of dissatisfaction and discontent for years to come.
There is a sense in dealing with Endowment Mortgages that we are trying to lock the stable door after the horse has bolted but there are other comparable areas.
In reading up for this meeting, I noted a letter in The Irish Times in May 2005. It reads: “Having recently been stung by high cost, commission-driven Endowment Mortgages, we are now being asked to gamble our retirements on what appear to be remarkably similar products.” The author was referring to Private Pensions, a subject being debated at present. He continued: “One of the main reasons why many people refuse to invest in Private Pensions is that they just do not trust the Financial Services Sector and consider its products rotten value.”
One of the most useful things that could arise from today’s exchange is an examination of the similarities between Endowment Mortgages and Other Products that are linked to the investment market, with all the potential pitfalls we have already considered. The delegates have identified many of the shortfalls that can result from the performance of investment markets. Here is another product being actively promoted and citizens are reflecting real concerns based on previous experience in Endowment Mortgages.
Are these market investment based Pensions that are being promoted currently and Endowment Mortgages comparable?
Can we learn lessons from the Endowment Mortgage experience that could be applied now to these products?
Note! (EMP26)
Pensions + mention FSO reference to same above
Similarities — not just product structure similarities, but fraudulent misrepresentations by which Pensions contracts induced / sold / represented
Corn Exchange ??? Do generalised example.
The Endowment Mortgages issue has passed its way through and while others will face pain in the future, I am concerned about current circumstances that may yet require serious address. Should we actively discourage people from taking up these products? It would be better from my outlook on life to encourage people to invest in State-led Pension Plans that can be invested in the development of our economy rather than in products based on stock market speculation.
There were many details in the material presented this afternoon. The letter we received in December (presumably, that from the Financial Regulator) stated the projected shortfall over the next 15 years is €89 million for Endowment Mortgages. How many customers does this cover? The letter also stated cases were upheld, a point on which Mr. Meade elaborated, as did Mr. O’Reilly in response to earlier questioning. The cases were upheld on the grounds of maladministration, not mis-selling. Will Mr. Meade clarify the difference between those two points? ………………
Mr. O’Reilly (Financial Regulator):
……The basic lesson we have learned is that it is necessary to fill an information gap between what the consumer knows and the Financial Institution knows.
There are two ways to do so, the first being to ensure that through the Codes of Conduct Institutions are obliged to provide information to individuals and the second is that we have a role in making sure people are more financially proficient.
We have a long-term role in the education curriculum to ensure people are enabled to ask the right questions. ………………
Note! (EMP27)
The LESSON?? — again, an absolute whitewash of Law — a denial of the actual duties in Law under which FSI and those in fiduciary positions are obliged to operate — all whitewashed by the Irish Legislative and Regulatory Regime
The Fraudulent Misrepresentation of Endowment Mortgages and similar commission driven investment products — BURIED
The Fraudulent Misrepresentation of certain commission driven Pensions products — BURIED
The Decoy / ‘Slight of Hand’ by the FR — must educate the people!!!!
See 2003 Act — objects of FSO : to improve public understanding of issues related to complaints against regulated financial services providers (see EMP17 above)
Mr. Meade (Financial Services Ombudsman):
In response to Deputy Ó Caoláin’s question, the allegations of mis-selling occurred between 1988 and 1992, six years before my statutory remit came into operation — therefore those complaints could not be upheld.
Note! (EMP28)
Check other Quotes / Examples received, especially dates — cite if possible
— contrived : see Legislation — the fr misr of products allowed to continue — the law on the matter of fr misr by those within the FSI kept in check to suit the interests of the FIs and their MPl.
Maladministration arises when notification that should have been sent every one or five years from 2001 was not sent. The person was not given all the information necessary to decide whether to switch from that product. This would also arise where there was no proper dealing with the customer, the complaint was not resolved within a certain period and where discourtesy was shown to a complainant seeking action.
Deputy Ó Caoláin:
I thank both contributors for their responses. While they cannot take up certain points, they should note that this committee could consider Pension products based on a speculative stock market approach with echoes of the Endowment Mortgage product. We should highlight this point.
Deputy Burton rightly praised journalists who brought to public attention the pitfalls and disadvantages of this approach. We have a public responsibility to further examine other products reflecting that type of approach.
As Mr. O’Reilly said, it comes down to the maxim, “let the buyer beware”.
Note! (EMP29)
See 26. Caveat Emptor!! — allowed to say this — uncorrected — FR was quite happy to such interpretation taken as being his position, and the actual position, on the matter —
THE WHITEWASH CONTINUES — an absolute debasement of the consumer / customer — and a complete whitewash, or rather a complete obfuscation (a painting black) of the hard-won democratic rights of the Irish people.
The trust placed in the Office of the CBFSAI was, once again, a mockery of the democratic process.
END STRONG — INCISIVE — CLINICAL
absolute abuse of democracy
Angela’s quote
This was the first test of Ireland’s all new Regulatory Authority.
Need Strong foreboding end of Section Statement.
SO, who Regulates the Regulator?
The buyer must inform him or herself but the information must be provided.
This committee might play that role in the future. We should examine other products in surgical detail.
Deputy C. Murphy:
…… On the issue of Endowment Mortgages, even if people had evidence, it seems the bulk of these cases would have been outside the Authority’s remit. ………………
It is peculiarly Irish that we tend to be reactive rather than proactive, assuming every Institution will operate to the highest possible standards. We then discover they do not do so and we must introduce a Regulatory System. It seems to crop up over and over again.
As we shall see in Section 2.6.6, The Whitewash Imperative, and in Section 2.6.7, A Stitch-Up in Time, Sections:Section 2.6.7, A Stitch-Up in Time, Section 2.6.8, Some Men are More Equal than Others
BUT, and MARK THIS WELL !
OTHER NOTES!!!!!!!!!!!!
Re-read part of Mary O’Dea’s contribution
Co-ordinated Presentation who’s answering what
Check ALL Chapters and Sections — Negligence over the line to Fraud i.e deliberate Negligence, deliberate breach of duty
Same people left in place
The tenet most essential to the Code of Honour by which Financial Services Institutions must function within society is Trust.
No evidence — no evidence of Honesty — fiduciary duties deliberately ignored — the duty to be able to prove (honesty, integrity, truth), cannot just be an assumption.
[BUT probably means non- statutory regulations!!]
(No Stat Req for Honesty!! Does this mean no such requirement?
+ Interrogate ‘burden of proof’ implies — objective proof — implies RECORDS!!!) RECORDS!! RECORDS!! RECORDS!!
Now being whitewashed by the FR
The overwhelming evidence, therefore indicated to show that this position of not being able to show that they had fulfilled their fiduciary duty had been universally adopted as a matter of policy.
The burden of evidence rests with the party in whom the trust is reposed — ALL FIs and LA Cos Know this!
Otherwise the FS deliberately System in Ireland was: We, deliberately, have no Internal System or Procedures in place to give objective assurance that we can be trusted — even though we know we should have! ——— A deliberate avoidance!
Conclusion? — We cannot be trusted! — We ensure that we do not maintain a system whereby we can fulfil the burden of proof required by our fiduciary duty. We’re hardly going to keep records of our own fraud!
On all this, all that’s said by the FR, the FSO (with 2 in-house barristers as deputy FSOs) is just that there were no records kept — (because) there were no Statutory Requirements to keep records.
Such a deliberate breach of fiduciary duty amounts to fraud — but this issue has been deliberately avoided by all these parties!
— giving the impression that gathering of evidence — ??? a false impression
trawl for Quotations — trawl for product Brochures etc. available — at this stage RTE had done a revelatory programme on Endowment Mortgages (of which those within IFSRA were well aware) and had an abundance of such ‘hard evidence’.
purpose of statute to codify common law duties — to ensure protections wrt common law duties being flagrantly ignored — Ref U.K. Codes / Rules —-NOT SO in Ireland! — in Ireland to whitewash — to dilute / deny the extent of Common Law duties — to negate — to conceal
Disclosure of information.
33AK.—(1) (a) This subsection applies to the following persons:
(i) the Governor and every former Governor;
(ii) every Director and every former Director;
(iii) every member, member’s deputy appointed under paragraph 4 of Schedule 3, former member’s and former member’s deputy who had been so appointed, of the Regulatory Authority;
(iv) the Chief Executive and every former Chief Executive;
(v) the Consumer Director and every former Consumer Director;
(vi) the Registrar of Credit Unions and every former Registrar of Credit Unions;
(vii) every other officer or employee and every other former officer or employee of the Bank;
(viii) every person who is or was formerly employed as a consultant, auditor or in any other capacity by the Bank or any constituent part of the Bank.
(b) A person to whom this subsection applies shall not disclose confidential information concerning—
(i) the business of any person or body whether corporate or incorporate that has come to the person’s knowledge through the person’s office or employment with the Bank, or
(ii) any matter arising in connection with the performance of the functions of the Bank or the exercise of its powers,
if such disclosure is prohibited by the Rome Treaty, the ESCB Statute or the Supervisory Directives.
(2) (a) If requested by the Bank, the directors or those charged with the direction of a supervised entity shall, in accordance with paragraph (b), inform the Bank on the extent of any disclosure duly made by or on behalf of them or the entity to any authority, whether within the State or otherwise.
(b) Where a request is made under paragraph (a), the directors or those charged with the direction of a supervised entity shall give to the Bank all the information so requested that is in their possession or under their control, within—
(i) 30 days of receipt of the request, or
(ii) such longer period as the Bank may allow when making the request or subsequently.
(c) In responding to a request for information under this subsection, the directors or those charged with the direction of the supervised entity concerned shall exercise due diligence and shall not, by any act or omission, give or cause to be given to the Bank false or misleading information.
(3) (a) Subject to subsection (1)(b) and paragraph (b), the Bank shall report, as appropriate, to—
(i) the Garda Síochána, or
(ii) the Revenue Commissioners, or
(iii) the Director of Corporate Enforcement, or
(iv) the Competition Authority, or
(v) any other body, whether within the State or otherwise, charged with the detection or investigation of a criminal offence, or
(vi) any other body charged with the detection or investigation of a contravention of—
(I) the Companies Acts 1963 to 2001, or
(II) the Competition Act 2002 , or in so far as any commencement order under that Act does not relate to the repeal of provisions of the Competition Acts 1991 and 1996, which would otherwise be subsisting those Acts,
any information relevant to that body that leads the Bank to suspect that—
(A) a criminal offence may have been committed by a supervised entity, or
(B) a supervised entity may have contravened a provision of an Act to which subparagraph (vi) relates.
(b) Paragraph (a) does not apply where the Bank is satisfied that the supervised entity has already reported the information concerned to the relevant body.
(c) Information contained in a report under paragraph (a) may only be used by the body to which it is addressed for the purposes of—
(i) the detection or investigation of a contravention of a provision of an Act to which paragraph (a)(vi) relates, or
(ii) any investigation which may lead to a prosecution for a criminal offence and any prosecution for the alleged offence.
AND, over this time period, the Financial Services Institutions’ Management Personnel and their Self Regulating Organisations were fully aware of the fact that there was systematic misrepresentation of investment products to consumers.
AND they were fully aware of just how exposed they would be if the prevalence of this SYSTEMIC FRAUD ever came to the knowledge of the Legal Profession.
To keep the lid on matters, the Self Regulating Organisations adopted a blanket Whitewash Policy.
A system of Regulation was devised, whereby the issues of infringement of Common Law and Statute Law were effectively bypassed.
This was achieved by applying a collusive distortion of Law that was premised on a whole new concept: ─ the concept of Mis-selling.
Nothing to do with potential loss — all Time of Contract / Point of Sale — Representations etc. — silence wrt Risk etc.
Mis-selling whitewash was also applied in the U.K. wrt Criminal Fraud — but consumers were compensated.
IFSRA lacked the democratic/social conscience to grasp the nettle — just could not bring itself to put Justice above the interests of FSI and personal interests of MP (see previous wording used)—- continued with its support of the Status Quo above all else — maintain Higher Order
YOUTUBE PRIMETIME LINK 1 XXXXXX YOUTUBE PRIMETIME LINK 2 XXXXXX YOUTUBE PRIMETIME LINK 3
Need to bring statutory breaches, Misrepresentation, Dishonesty, false pretence — into the picture —- as well as breach of fiduciary duty.