The point I would make is that the income trust product was to the substantial benefit of the vendors and promoters of income trusts. Basically, they converted into income trusts businesses for which they were selling out of the market, taking the cash up front. In addition, the investment banking industry and the securities legal community that supports the income trust industry have taken out exorbitant fees, at the rate of 7% for every cash financing pass.
In addition, I would note that while those vendors were taking cash out of the businesses and the investment banks were taking $2.5 billion in fees on $35 billion of business income trust offerings, the performance has been pathetic. The facts speak for themselves.
In the $35 billion business offering market comprised of 286 offerings from the year 2001, one in three is down more than 20%, and the average decline is 45%. There are $10 billion of losses in one of three business income trusts. Two out of three of them are below water.
We have a situation in which products are sold to seniors on the basis of a deceptive cash yield. That is unsuitable because those seniors don't have a proper legal format for seeking restitution for damages in the courts. Meanwhile, the vendors are taking hundreds of millions of dollars off the table while the investment banks are taking out $2.5 billion in fees. They're fighting because this was 40% to 50% to 60% of the business that was done on Bay Street.
I used to work on Bay Street. I'm pro business, but I'm pro honest business. In transparent markets, you don't have vendors taking billions of dollars off the table to sell products to seniors.