RCMP Criminal Investigation of Goodale/FMO

[Canada 02]

http://www.ctv.ca/servlet/ArticleNew...e=election2006

The RCMP are investigating allegations of insider trading. Hours before Ralph Goodale annouced his decision on taxation of dividends and income trusts there was a spike in trading activity

NDP Reaction:

In spite of the Mounties' statement, New Democrat Leader Jack Layton said being a minister of the Crown is not a right, but a privilege -- and one that Goodale should give up pending a criminal investigation.
In spite of the Mounties' statement, New Democrat Leader Jack Layton said being a minister of the Crown is not a right, but a privilege -- and one that Goodale should give up pending a criminal investigation.
"It is blindingly obvious, based on ample precedent, that when a minister's department is under criminal investigation ... the minister should step away from his duties until the investigation is complete," said Layton at a Toronto press conference this afternoon.

Tory Reaction:

Further, Deputy Tory leader Peter MacKay said it's "totally inappropriate" for Goodale to declare innocence in the middle of an RCMP probe.
He repeated his party's call for the finance minister to step down, "pending completion of an investigation."
"There is precedent for this," MacKay told Canada AM from New Glasgow, N.S. He later elaborated on CTV Newsnet that Ontario Liberal MP Judy Sgro stepped aside from her cabinet position after a newspaper report revealed allegations from pizza shop owner Harjit Singh, who said Sgro pressured him to supply food to her 2003 election campaign. Sgro was later cleared of any wrongdoing.
MacKay said, in this current case, it should be enough that the Mounties have reached "that threshold where they ... suspect that wrongdoing has taken place" for Goodale to step down.

Goodale's Response:

When asked on Canada AM to explain the sudden spike in trading on the stock exchange before his announcement if no leak had occurred, Goodale pointed to an interview he gave to reporters on the day before his announcement, indicating that traders may have made an educated guess based on his remarks.
"The day before on the Tuesday late afternoon, coming out of the House of Commons, I indicated publicly in a scrum in the lobby of the House of Commons that I was concerned about matters related to uncertainty in this issue of income trusts, and I was considering the possibility of an early announcement," said Goodale.

[Fozzie_DeBear]

There could be something to the allegations, or they could be absolutely nothing.

The thing about it is that [as I understand it] the opposition asked the RCMP to become involved...not the banks, security exchanges etc.

It smells of political opportunism to me and I agree that until there is some/any evidence of wrongdoing that he shouldn't step down.
________
California Medical Marijuana Dispensaries

[Canada 02]

Here is the opinion of a forensic accountant:

http://www.theglobeandmail.com/servl...lDecision2006/

Toronto forensic accountant Al Rosen said he was not surprised a criminal investigation had been launched. Mr. Rosen has examined the trading records of several stocks and income trusts on the day the government announced the policy changes. "My guess was that there was an over 90 per cent probability of insider trading," he said. "It required an investigation."
Mr. Rosen said trading records suggest unusual price movements and volume levels in both dividend stocks and income trusts and that the trading was being driven by certain Bay Street firms.
"Obviously it's a deep concern about integrity," he said.
Mr. Rosen said the investigation should focus on both the source of the alleged leak and who would have benefited from information.

[CaptainCrunch]

Its the oppositions job to ask for the investigation since it was becoming apparent that the government didn't intend to investigate this or call for an investigation, thats what good opposition parties should do. Is it political opportunism, sure to an extent, but when something smells like this does, and it does smell badly then you ask for an investigation. If the Liberal's had been smart, they would have headed this fresh smell of scandal off by calling for an investigation when the allegations started, instead of employing the usual Liberal strategy of deny and bluster.

[Resolute 14]

If it is political opportunism, it is an opportunity that the Liberals themselves gave the opposition. Goodale is under investigation for a criminal act, he needs to step aside until/unless he is cleared.

[Canada 02]

I'll provide a link when I find one, but just shown on CTV NewsNet, quotes and excerpts from e-mails of various securities executives from the date of Goodale's annoucement back on Nov.23rd (one was TD Securities exec., Ontario Teachers Pension fund and Sentry Select Capital). They basically said they heard from 'Liberal sources' that Goodale was to make a favourable tax ruling on income trusts after the close of trading on that day. Apparently, these e-mails were circulating around the various brokerage houses and lead to the increase trading activity

[Canada 02]

Exact quote from the story (there is a video on the right hand side of the webpage at the CTV link above)

Don Drummond (Chief Economist TD Bank) first heard heard by e-mail 4hrs in advance, and Liberal strategists in Ottawa were the original source - "A lot of people seemed to know there was an annoucement coming and a few people seemed to know what it was"

Jim Leech Sr. VP OTPF "I got a bunch of emails around 2pm say for sure Goodale was making an annoucement after the close of trading"

Sandy McIntyre VP Sentry Select Capital sent this email to his staff at 3:04pm
RE: Goodale "There is a strong rumour out of Ottawa that Goodale is going to pronouce after the close today his trust solution... hope my sources are right!"
He told CTV, his sources were "well connected Liberals"

[Canada 02]

Still more:
http://www.ctv.ca/servlet/ArticleNew...hub=TopStories

More important, perhaps, CTV discovered evidence, in writing, that seems to suggest some people had advance knowledge of exactly what the finance minister was going to say.
That evidence is in public bulletin board postings on a popular investor's internet site called "Stockhouse". The first posting -- at 11:14 that morning -- came from someone who wrote: "Skuttlebutt is that he (Goodale) will soon announce a reduction on dividend taxation to 'even the playing field'." This information was posted a full seven hours before the minister's press conference, and possibly viewed by many potential investors before the markets closed.
The second posting on the same site came from another person, who also seemed to know what was coming. At 3:59, they posted this message: "The hot rumour is that the government's decision on the income trust issue is that they are going to make a more level playing field by reducing the degree of double taxation which currently exists on dividends by increasing the dividend tax credit."
The Finance Minister used very similarwording when he made his announcement two hours later.
"We're going to help to level up the playing field as between corporations and trusts and we're going to be doing that by ending double taxation on dividends," said Goodale in his media conference that evening.

http://www.ctv.ca/servlet/ArticleNew...s_name=&no_ads=

But a representative of Canada's most influential seniors' lobby group says he got a phone call on the morning of Nov. 23, several hours before the markets closed, and before Goodale made his announcement.
Protocol is that a finance minister never gives word of a policy change while the markets are still open.
"The day they made the announcement they phoned us and said something is going to be said," the associate executive director of Canada's Association for the Fifty Plus, William Gleberzon, told CTV News.
Gleberzon said the call came from a senior policy advisor in the finance minister's office.
When asked what exactly he was told, Gleberzon indicated the specifics were vague, but the underlying message was clear.
"They said something was going to be announced later in the day. And we assumed that if they told us that ... it would probably be something we'd be happy with."