Mr. Speaker, Bill C-46 falls tragically short of any meaningful codes of conduct for the financial markets. In fact I refer to an article from the Globe & Mail of September 26, 2002, where it said that the meagre fines contemplated in the bill would give analysts a licence to shill, not to kill but shill.
What I am getting at is the practice of misrepresenting the value of certain stocks by recommending a strong buy. In other words, it is a recommendation to purchase, when in actual fact the analyst knows full well that the stock is not doing well at all. This kind of corruption, this kind of shilling, is simply because an analyst has a vested interest or even shares in a company, and is misrepresenting the value of a certain company or stock to investors. No wonder there is a crisis in confidence if this is the type of thing that is going on.
I can give an example. Scotia Capital treated Royal Group Technologies as a strong buy recommendation on September 13. Three days later Royal issued a profit warning that clobbered the stock. The Scotia report failed to disclose that Scotia itself owned 5.5% of Royal. Imagine small time stock investors. They are simply at a terrible disadvantage. In a situations like that, the government has to step in to regulate these markets.
Here is another example. TD Newcrest had a buy on Telus but its research reports did not disclose that chief executive officer of Telus, Darren Entwistle, was a TD Bank director. Essentially, we have all this incest going on at that level.
All these directors and analysts for the major accounting firms are misrepresenting the value of stocks at the peril of Canadian investors and at the peril even of the institutional investors like the union I represent.
I have a great deal of interest in this because the retirement security of honest working people is being squandered and misused in situations like this.