Estate Planning

IIROC fines TD Waterhouse $4 million for “a willful business decision”

By: James Langton, March 23, 2020

IIROC staff argued the non-compliance was “a willful business decision”

The Investment Industry Regulatory Organization of Canada (IIROC) has fined TD Waterhouse Canada Inc. $4 million for failing to comply with certain provisions of the Client Relationship Model (CRM2) reforms.

An IIROC hearing panel handed down a record fine after finding that the firm made a deliberate business decision not to comply with CRM2 requirements to provide position cost information in quarterly retail client account statements for certain securities positions.

The non-compliance resulted in an estimated 175,301 clients who held positions that were incorrectly reported as “not determinable” when the information was available, the panel said.

“A failure of such magnitude is not, by any measure, a minor transgression,” it said.

According to the panel’s ruling, the firm was capable of becoming fully compliant with the position cost requirements of CRM2 by the end of 2015.

“However, in the spring of 2015, the respondent identified what it considered to be potential litigation risks and client experience issues that might have resulted,” the ruling said.

The firm decided to adopt an “alternative solution to avoid the problem,” which resulted in about 8% of client positions being offside with the requirements, it said.

IIROC discovered that the firm wasn’t compliant after investigating a client complaint.

According to the hearing panel’s decision, the firm largely admitted to IIROC’s allegations, but argued that it intended to comply with the requirements. The firm suggested that a fine of around $500,000 was warranted.

However, IIROC staff argued that the non-compliance was “a willful business decision,” which merited the maximum fine ($5 million).

The hearing panel largely sided with IIROC staff. It said that it was “unpersuaded by the [firm’s] argument that it did not refuse to comply with the new rule.”

The panel found that this was a business decision that was signed off on by the firm’s senior management, and that it was a failure of governance.

“Consultation with IIROC should have been the first step for TDW. Its failure to do so is damaging to the integrity of the regulatory regime. The fact that a premier financial institution acted in such a manner provides extremely poor leadership for the other members of IIROC,” the panel said in its ruling.

The panel declined to impose the maximum fine, citing the lack of client harm caused by the firm’s actions.

In devising sanctions, the panel said that the facts of this case are unique.

“There are no cases which come close to being comparable to the respondent’s willful decision not to follow [an IIROC rule] and to ignore the regulator until the misconduct was discovered and a complaint was made. We had to fashion a sanction that is appropriate for such an act of fundamental disobedience to the applicable rules,” it said.

“In short, we believe such a fine will provide both general and specific deterrence to all those inclined not to respect their obligations to obey the regulatory rules,” it said.

The firm was also ordered to pay $28,497 in costs.

CRA takes aim at the wealthy

CRA takes aim at the wealthy

CRA takes aim at the wealthy

The agency’s HNW audit program is comprehensive and costly for clients, tax practitioners say.

As governments around the world continue to target aggressive tax avoidance and tax evasion, pressure on the wealthy to provide transparency about their finances increases. Canada is no exception: tax practitioners here say that the Canada Revenue Agency’s (CRA) audit program of high net-worth (HNW) individuals requires Canadians to provide extensive details about their tax and financial affairs.

“[The CRA is auditing] partnerships, joint ventures, any foreign affiliate – it’s like a laundry list of information that [the agency] is asking for,” says Deborah Graystone, private client service practice leader in Canada and leader of BDO Americas Private Client Service Practice with BDO Canada LLP in Vancouver.

Says Peter Weissman, partner with Cadesky and Associates LLP in Toronto: “It is a very intrusive and expensive process.”

The CRA’s Related Party Audit Program (RPAP) seeks to address non-compliance among wealthy individuals and families who control them, as well as these taxpayers’ associated entities. “The CRA approach is to audit the entire group vs auditing a single taxpayer,” the CRA stated in an email to Investment Executive in response to questions about the RPAP.

In recent years, the CRA has broadened the reach of the program (which, until April, was known as the Related Party Initiative), including removal of the requirement that an HNW individual have 25 or more related-party entities to fall under the program’s ambit.

The CRA states that there are 600 individual audits currently in progress under the RPAP, and that during the period of April 2014 to September 2019, more than 900 audits had been completed. Furthermore, the CRA has identified more than 1,100 HNW groups qualifying for audit under the RPAP.

Tax practitioners interviewed for this article say that in their experience, several CRA auditors – not just one – will be assigned to an individual RPAP file. After the CRA received additional resources as part of the 2016 federal budget, the agency states, it added 17 RPAP audit teams, for a total of more than 30 teams.

“If the CRA, historically, has always just looked at one auditor at one entity at a time, that would be very difficult to assess compliance overall,” says Curtis Davis, consultant in tax, retirement and estate planning services, retail markets, with Manulife Investment Management in Toronto. “Hence the more team-based or holistic approach that [the CRA] is taking.”

The CRA also is increasingly using data, leveraging internal as well as third-party sources, to identify and analyze RPAP groups, the agency states: “The CRA’s use of advanced data analysis techniques to mine the business intelligence [the CRA] has at its disposal has allowed the CRA to more precisely target non-compliance in a timely manner.”

The roots of the RPAP go back to the mid-aughts, when the CRA launched a pilot project to audit HNW individuals. However, the program became official and picked up momentum only after the global financial crisis of 2008-09 and the publication of a report by the OECD about the risk that tax avoidance and tax evasion posed to government revenue around the globe.

Over the past decade, the scrutiny on HNW individuals in Canada has increased, particularly after events such as the release of the so-called Panama Papers, which contained details of more than 200,000 offshore accounts.

The federal government has signed several agreements and treaties with other countries to exchange financial information about each other’s tax residents. In March 2018, the CRA changed the rules governing the voluntary disclosure program, making the agency much less forgiving if it deems a taxpayer’s non-compliance to be intentional.

“In virtually all of these cases, the CRA can make that claim [that the non-compliance was intentional],” says Robin MacKnight, partner with Wilson Vukelich LLP in Markham, Ont. “Whether it’s true or not, they can certainly make it.”

HNW clients who are the subject of an RPAP audit may well feel overwhelmed, but should seek out tax advice rather than try to deal with the CRA directly.

“My preference is for the CRA to come and interview the [tax] advisor first,” Graystone says. If the client does choose to meet with the CRA, the advisor should be present, she suggests.

Weissman agrees: “When someone is nervous, they talk a lot. They may have nothing to hide, but if they say something in the wrong way, the CRA may start chasing [down a path].”

Both Graystone and Weissman stress the importance of co-operating with the CRA. They recommend asking the agency to provide a list of questions, in writing, related to the audit. These steps may narrow the scope of the audit, reducing costs and hassle for your client.

“See what they’re really looking for, see if we can start with the bigger entities first, and then, if [the CRA] has other questions, we can expand [the client’s responses],” Graystone says.

Depending on circumstances, seeking legal advice for your client’s protection may be necessary, Weissman says: “When I do think something has not been done properly, I will sometimes get a lawyer involved to get solicitor/client privilege.”

In fact, engaging the services of a lawyer can help to make sure that your clients aren’t sending information to the CRA inappropriately, Graystone says: “More complex [financial] transactions are often subject to solicitor/client privilege, and then we definitely want to work with legal counsel to navigate that information request.”

Graystone says that dealing with an RPAP audit can take years, with information and questions going back and forth between the taxpayer and the CRA.

Weissman says that while advice and legal costs can vary depending on the structure of a client’s financial affairs, an RPAP audit could “easily cost between $75,000 and $100,000 before you get through the process, and that is before you need to appeal or go to court.”

However, with governments around the world trying to address the issue of income inequality – during Canada’s recent federal election campaign, several parties’ platforms addressed affordability – sympathy for the plight of HNW Canadians may be hard to find, Weissman says: “There isn’t any, and I get that.”

Weissman does point out to clients – facetiously, he says – that the cost of advisory fees in regard to a CRA audit are tax-deductible.

By: Rudy Mezzetta | Source : Investment Executive | November 1, 2019

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Next Level Investments, Chris Uitvlugt

Kingston Police reflect on ‘ruthless’ Next Level fraudster

Local detectives have described the mastermind behind Next Level Investments as ruthless, carried away and, in the final 11 months in business, “living life like a rock star.”

Now that he is in prison for the next four years and nine months, police are finally able to describe what went into investigating the multimillion-dollar Ponzi scheme.

“I don’t blame people for taking the chance and believing in it,” Det. Brad Hughes, who co-led the investigation, said. “(Next Level) did their due diligence to convince people. They had a business front, they had a website, they had a guy who knew the language, salesmen who were great with people.

“That’s why when I hear from the victims, and I hear from a lot of them every day, they all start with that they’re embarrassed and ashamed, but I tell them: don’t be.”

Last Monday, Next Level Investments’ ringleader, Chris Uitvlugt, was sentenced to four years and nine months in prison. Justice Gary Tranmer did not hold back during the sentencing. He told the 29-year-old father of three daughters, that had it not been a joint submission, his sentence would have been much longer.

Chris Uitvlugt's leased orange Lamborghini

Chris Uitvlugt’s leased orange Lamborghini and black Mercedes-Benz 550 S, which were seized during the Next Level Investments investigation.

“You did this,” the judge said. “You lost everything. You took yourself out of your children’s lives. It was your choice to trade that for the assets and a (rental) Lamborghini.”

He told Uitvlugt, “you preyed on these people, you preyed on their trust, their hopes, their dreams.”

Hughes sat down Thursday with the Whig-Standard to tell the story of the Next Level Investments investigation, dubbed by the Ontario Provincial Police as Project Springfield. He said they first learned of Next Level Investments in early 2016 when potential investors called the fraud unit to ask if the local company was legitimate.

Trophy photo of roughly $126,000 found on Chris Uitvlugt's cell phone

A photo found on Chris Uitvlugt’s cellphone when it was seized during the Next Level Investments investigation. (Supplied Photo)

After hearing what the potential client had to say, police would say that it looked like a scam. It was a classic “too-good-to-be-true” sales pitch. Next Level was promising a 550 per cent return on investments by using the Foreign Stock Exchange, more commonly referred to as the FOREX. Investors would receive 50 per cent of the return and Next Level would retain the other half.

Then in December 2016, police heard of individuals who had actually made money. Confused, the investigators looked into the company’s Ontario Securities Commission licencing and found that there wasn’t any. How could they be offering expert advice in the financial field and investments if they didn’t have a licence to do so?

Trophy photo found on Chris Uitvlugt's cell phone

A photo of roughly $276,000 found on Chris Uitvlugt’s cellphone when it was seized during the Next Level Investments investigation. (Supplied Photo)

The question was enough for Hughes, Det. Jason Alblas and Det. Cam Gough to put together a production order for a search warrant based on the company operating under false pretences. A move the OPP would describe as “gutsy,” Hughes said.

“They were floored that we’d taken down a Ponzi scheme and recovered over a million bucks, they just said, ‘this never happens,’” Hughes said. “The fact that it all worked out is amazing … we just went on basic fraud investigator knowledge.”

Once the company’s bank accounts were restrained, officers “hit the door” of the company’s storefront at 1309 Princess St., figuratively, on March 14, 2017, at 10:45 a.m.

“That’s when we got to go in and see that there was lots of money coming in from people, but there was no other source of money coming from any investments,” Hughes said. “It looked like a clear-cut Ponzi scheme …

“Right from the beginning, we knew it wasn’t above board.”

Chris Uitvlugt's Audi R8 seized during the Next Level Investments investigation.

Chris Uitvlugt’s Audi R8 seized during the Next Level Investments investigation. (Supplied Photo)

As they searched the offices, officers were watching Uitvlugt’s home. Like in a movie, minutes after they started their search, a man went to Uitvlugt’s home and ran inside. A few minutes later, he left the home carrying a bag of cash. The man was later identified in an agreed statement of facts read out in court as Jordan McGregor. McGregor was later found not guilty of possessing proceeds of crime.

The court found there was no evidence that McGregor knew of the Ponzi scheme and the judge found “McGregor was conned by Mr. Uitvlugt, as were other investors.” It was also agreed that Uitvlugt was the only person known to have access to and knowledge of the company’s trading activity on the Foreign Exchange markets.

The drama continued to unfold when, after the office’s search, they received a tip: there’s a safe behind a false wall with a million dollars cash inside.

Investigators had missed the false wall and the safe all together, Hughes said, so the investigators turned right back around. They found the wall and the safe, but once they busted it open back at the police station, there was only about $60,000 inside.

The same day they searched the business, they searched Uitvlugt’s home and seized his three vehicles: a bright orange Lamborghini, a Mercedes-Benz 550 S and an Audi R8. It only took three days of examining the evidence for the local crew to realize that they were in over their heads.

“We realized the scope of it — how many people were involved victim-wise — and realized that we needed some help,” Hughes said.

The police investigation determined that there were 678 victims. Hughes said the victims in this case were mostly from the east region of Ontario, but there was also a couple in Nashville, Tenn., involved, and some others in Alberta, where Uitvlugt had previously worked.

When the OPP came on board, it became a “true” joint-force investigation with the majority of the work split down the middle, Hughes said. With Alblas and Gough also remaining on the case, Hughes became a co-lead investigator with OPP Sgt. Tim Wright under the leadership of OPP Insp. Dave Robinson. Robinson then brought in “the best” from across the province: detectives Jennifer Shaw, Jeff Blackstock and Ed Finn.

Hughes said Robinson would get the crew anything they needed, and the Kingston Police leadership allowed them an entire year to live and breathe the case.

“There were a lot of days looking at numbers on a computer, a lot of days travelling to interview victims,” Hughes said. “It definitely entailed a lot of brain space. For that year, that’s all my brain was wired to. I knew it inside and out.”

Hughes also noted that they also needed the OPP to come assist them for transparency reasons because some of their own officers had invested with Next Level. This made the force a target of criticism once news of the investigator hit the newspapers.

“Part of some of the victims trusted the company because they did see Kingston Police officers around the business,” said Hughes, not elaborating further. “(We thought) to keep transparency, to let them know that Kingston Police was not involved with the structure of this business, that we bring in the OPP, just to show that this was an investigation that was on par, that there was no favouritism anywhere.”

Aside from examining the bank accounts, the key pieces of the evidence actually came from Uitvlugt’s personal cellphone. The most important piece was a fake trading account that showed successful returns that he was showing clients and potential clients.

“When you looked at the real account, it just didn’t jive up,” Hughes said. “It was the demo account. That was a nail in the coffin.”

The truth was that Uitvlugt only invested about $24,000 into the FOREX and the trades Uitvlugt did make actually resulted in a net loss of $5,000. Despite this, Uitvlugt made more than $1 million in his final month of “business,” Hughes said.

“He’s a guy who got carried away,” Hughes said. “He was good (at trading) on this demo account because there was no real-life emotion in it. But it didn’t translate into real-life on his own, so I think he just hoped he could get the same sort of luck that he got on his demo account on his real account. He just couldn’t pull it off.

“Then once you get a taste of driving Lamborghinis and having close to $300,000 cash on your bedroom dresser, and then people going around town praising you and calling you a genius. … How do you come out and tell everyone you’re a liar?”

Hughes credited Uitvlugt for being a dedicated father who treated his immediate family well, but he described him as “ruthless” when choosing his victims. In many of the cases brought up at court, his investors said they considered him a friend.

Hughes interviewed Uitvlugt four times throughout the investigation. He described those interviews as a game of poker.

“He didn’t show his hand very much, but he was interested in what we knew,” Hughes described. “I was very open with what we had and told him my views and thoughts, but it wasn’t until the sentencing the other day that he admitted it.”

Of the 197 people who did make money off the Next Level scheme, only one elderly woman gave it back. Hughes estimated it was $70,000 that she didn’t want, knowing it was dirty.

They can’t force everyone to give the money back because they cannot prove they knew where it came from. It would essentially be making more victims of the crime.

“Morally, should you give the money back? Probably. But legally, I can’t take it from you,” Hughes said. “The people from which we did, we were investigating criminally, and they do have some sort of responsibility within the company. They weren’t an innocent investor who made some money early on.”

Hughes suggested that anyone who did receive a return report it to the Canada Revenue Agency.

Uitvlugt was not the only person charged and convicted during the investigation. In March 2018, Kenneth McGuire, described as the face and voice of the company, pleaded guilty to possession of proceeds of crime and was sentenced to two years probation.

Crown counsel Brian McNeely at the Ministry of the Attorney General in Toronto said that victims of Next Level will be able to apply for restitution within the next couple of weeks. While it will not cover the full amount that they invested, perhaps not even half, it is supposed to be a starting point. Anyone wishing to get all their money back will have to pursue that through civil court at their own expense.

Victims will be able to apply by emailing a contact at the Ministry of the Attorney General, with their full name, contact information and proof of claim. A notice will be sent out at a later date with information where victims can send their information and by what date.

Currently, there is just one more matter of forfeiture that is in dispute and is currently before the court. Once that is settled, that should be the end of the Next Level investigation.

As Uitvlugt was being escorted away after his sentencing, Hughes said he turned to him and thanked him.

“I don’t hate the guy; I hate what he did,” Hughes said. “I don’t hate anyone who was involved — the three that were charged and the other that is put forward for forfeiture. I don’t hate these people. I could care less. I just hate what they did.

“At the end of the day, it’s not personal. We all came in the same way and we’re all going to go out the same. It’s what we do in between that makes us who we are.”

Published on: November 16, 2019, last Updated: November 18, 2019
Steph Crosier, the Kingston Whig Standard

Estate Planning

Next Level Investments: Kingston’s own Ponzi scheme

Next Level Investments

Fraudulent investment company boss sentenced to prison

The 29-year-old founder and CEO of Next Level Investments, a company that operated in Kingston between 2016 and early 2017 and turned out to be a Ponzi scheme that bilked the majority of its estimated 874 investors out of more than $3.5 million, was sentenced Monday to the equivalent of five years in penitentiary.

Christopher Uitvlugt pleaded guilty last November to a single count of fraud over $5,000, and his sentencing had originally been scheduled for March this year to allow for the preparation of a pre-sentence report. Two days before sentencing submissions were to begin, however, his lawyer at the time, Clyde Smith, was named a judge and required by law to immediately cease all practice as a lawyer, necessitating the case be rescheduled.

His defence was subsequently taken over by Sarah Black, who negotiated a resolution on his behalf with Crown prosecutor Alexander Hrybinsky, and the two lawyers presented Justice Gary Tranmer with a joint recommendation on sentence, urging five years in penitentiary, minus enhanced credit on 72 days Uitvlugt spent in pretrial custody following his arrest in March 2018, which leaves him with four years and about nine months left to serve.

Uitvlugt has no prior record and, in accepting the lawyer’s sentencing recommendation, Justice Tranmer cited a Supreme Court decision that requires judges to give deference to lawyers’ joint recommendations on sentencing unless they are clearly unfit. He observed that while 14 years is the maximum sentence available for Uitvlugt’s crime, five years is a significant amount of prison time for a first time offender.

“Prison won’t be easy,” the judge told the 29-year-old. “It’s not intended to be.” But he also wanted Uitvlugt to know, “if it wasn’t a joint submission, it (the sentence) would be significantly longer.”

Originally from Gananoque, Uitvlugt worked at various jobs, according to defence lawyer, Sarah Black.

It was revealed, in other related court proceedings, that he spent time in the oilfields, returning to this area in late 2015 and working as a server at a local restaurant.

Early in 2016, however, Uitvlugt started Next Level Investments, which was registered as a business with the Ontario Government in April 2016, but never licensed as an investment business or authorized under the Ontario Securities Act to sell investments to the public, even after it was renamed Next Level Capital Group in December 2016 and moved out of his home to commercial offices on Princess Street .

When Uitvlugt first entered his guilty plea, Justice Tranmer was told, his investors were led to believe they could realize returns as high as 550 per cent per annum investing with him. Their money was supposed to be put into the Foreign Exchange (FOREX) market with 50 per cent of the profits returned to the individual investor, while 50 per cent was retained by Next Level.

But Justice Tranmer noted that the police investigation into Next Level’s dealings determined that more than 678 of the company’s estimated 874 investors received no pay out whatsoever.

It was also discovered that out of $4.8 million that police investigators were able to establish went into Next Level accounts, only a very small amount — $24,000 — was ever used in trading, and the trades Uitvlugt did make resulted in a net loss of $5,000.

After police shut down Next Level, $136,925 in cash was recovered from one of Uitvlugt’s associates and his wife, and Hrybinsky said three bank accounts belonging to Next Level and its CEO remain frozen and various property, including vehicles, a boat, bicycles and car parts, have been seized. He told the judge the Crown intends to use those monies and whatever can be realized from the sale of the seized property to reimburse the cheated investors “to the extent possible.”

Justice Tranmer asked him the anticipated value of those assets, including the liquidated property, and he was told by Hrybinsky that he can only ballpark it at this point, but guessed it would amount to around $1.2 million of what has been estimated as a $3.5-million loss to the collected investors’.

Speaking for her client, Black told the judge that Uitvlugt is a dedicated father to three young daughters, one of whom has serious health issues. She told the judge that he started Next Level intending to run “a legitimate and fruitful business. However, Mr. Uitvlugt quickly got carried away.”

Now, “financially he has been left with nothing,” she said, and faces a difficult separation from his children.

Uitvlugt likewise told the judge: “I’d just like to say, when I started this I meant to do right and not hurt anybody.” Echoing his lawyer, he added that he got carried away.

Justice Tranmer, fresh from a review of victim impact statements provided by 32 of Uitvlugt’s victims, told him bluntly that whatever impacts he experiences are entirely his fault.

“You did this,” the judge said. “You lost everything. You took yourself out of your children’s lives.

“It was your choice to trade that for the assets and a (rental) Lamborghini.”

He told Uitvlugt, “you preyed on these people, you preyed on their trust, their hopes, their dreams,” and to illustrate his point he cited examples from the various impact statements, many of them $500 to $1,000 investors who could ill afford to lose the money.

More than one of the victims, the judge noted, was trying to raise extra cash for needed home repairs, and at least one of those had thought Uitvlugt a friend.

Another of the victims was a senior citizen who invested the $1,000 he’d saved for emergencies.

Several were trying to create a financial buffer for loved ones with expenses related to serious health problems. Several more wrote of losing money they’d put away and were trying to grow for the education of one or more grandchildren.

Others wrote of marital discord in the wake of their loss. Justice Tranmer cited one man who wrote that he hasn’t told his spouse about the lost money and feels depressed and ashamed.

In addition to Uitvlugt’s sentence, the contents of his and Next Level’s bank accounts and all property seized by police has been ordered forfeit to the Ontario Government by Justice Tranmer, in care of the attorney general. It’s anticipated that some time in the next month, instructions will be published in this newspaper and possibly on the Kingston Police website on how to go about making an application for restitution.

Published on: November 12, 2019 by The Kingston Whig Standard

Support increased dramatically: witness

The mother of Chris Uitvlugt’s children told Justice Larry O’Brien on Monday that the support payments she received from him increased from $750 to $11,000 to $12,000 a month in the latter part of 2016, coinciding with Next Level Investments opening offices on Princess Street in Kingston.

Kirstie Saxton-Robinson, 24, said it didn’t occur to her that he was doing anything illegal, however.

Saxton-Robinson was testifying in Kingston’s Ontario Court of Justice at the trial of Jordan D. McGregor, an associate of Uitvlugt’s and one of the investors in Next Level Investments, which later operated as Next Level Capital Group but never registered with the Ontario Securities Commission.

Uitvlugt, who was identified on Facebook as Next Level’s CEO, was charged with fraud, possession of proceeds of crime and conspiracy after police raided the operation’s 1309 Princess St. office in March 2017. His case is still before the courts.

McGregor is on trial for possessing proceeds of crime in connection with a bundle of cash, part of which was delivered to Saxton-Robinson a day or two after Uitvlugt’s arrest.

Saxton-Robinson testified that Uitvlugt had their children for the day on March 14 last year but brought them back early, some time between 11 a.m. and 1 p.m., and told her only that he was going to the police station and “he would give Jordan money and I would get it.”

By then, she told Justice O’Brien, she regularly received $6,000 on the first of each month and “another five or six [thousand] around the 15th.”

But she said “no one brought money to my house,” so she reached out to McGregor via Facebook.

She told the judge that he replied that he’d “passed along the money” to somebody else to give to her, “and then he blocked me.”

She told the judge she was subsequently contacted by Cory Macdonald, a local businessman and investor in Next Level, who declined to meet with her in person. “He didn’t want me to know what he looked like,” she said. Instead, he told her that he was going to Wild Wing restaurant at the Kingston Centre and would leave the money for her in his SUV.

Saxton-Robinson said she went to the parking lot on March 15 or 16 around noon, found Macdonald’s unlocked vehicle and retrieved a Walmart bag containing the cash from the front passenger seat.

She told the judge when she counted it there was between $40,000 and $46,000 inside, which she took home and put in her closet.

The next day, she said, police came and seized the cash.

McGregor’s lawyer, Leo Adler, questioned Saxton-Robinson about what she thought was going on, and she told him she initially believed Next Level had some sort of licensing problem.

Then later, “I felt like if he [Uitvlugt] was going away, my kids should be taken care of.”

She denied threatening McGregor over the cash but admitted she was “upset” when it wasn’t delivered.

She agreed she’d texted him that she was going to get a lawyer, but disputed that it was in response to him saying he needed legal advice about the cash.

She also agreed that she’d sent an email to one of the officers involved in the case, complaining about how she was characterized by Macdonald in his testimony last week. The officer, she confirmed, told her not to worry because Macdonald had deviated from his original statement.

But he didn’t talk to her about the case beyond that, she said.

In his closing argument, Crown prosecutor Alexander Hrybinsky said Next Level Investments and Next Level Capital Group were represented to potential investors as “high risk, high reward.”

It’s been the prosecution’s contention since the company’s offices were raided last year, however, that the whole operation was a Ponzi scheme that simply paid early investors with later investors’ money.

It purported to invest in foreign exchange markets, earning extremely high rates of return. But a police review of the company’s trading accounts found little evidence of actual trading and a net loss on what trading there had been.

Hrybinsky told the judge that the day Uitvlugt turned himself in to police, someone left his home at 12:27 p.m. carrying a rectangular package believed to have contained the money that was supposed to be delivered to Saxton-Robinson.

Later that day, he said, McGregor handed that same package off to real estate agent Louis Tavakoli.

And he suggested that Tavakoli, Macdonald and McGregor all considered the possibility that the money was illegitimate.

Adler argued that there were rumours, but said there’s no evidence,  that his client knew that police had been to Uitvlugt’s Fisher Crescent home on March 14.

Uitvlugt, he said, had told everyone it was “just some misunderstanding.”

He also noted that “it’s Cory [Macdonald] and Louis [Tavakoli] who ultimately makes the decision to release at least some of the money to Kirstie [Saxton-Robinson].”

Justice O’Brien will deliver his decision in the case later this month.

DIY Investing

Next Level representative on trial in Kingston

The trial of Jordan McGregor continued Wednesday afternoon at the Ontario Court of Justice with the testimony of a local business owner who claims to have lost about $95,000 at the hands of Next Level Investments.

McGregor has been charged with possession of proceeds of crime in connection to the massive fraud investigation by Kingston Police and Ontario Provincial Police into Next Level, also known as Next Level Capital Group.

Chris Uitvlugt, who used to identify on Facebook as Next Level’s CEO, was charged by police with fraud over $5,000, possession of property obtained by crime and conspiracy. The charges have not been proven in court. Uitvlugt will be appearing in Superior Court, but a date for trial has yet to be set.

Kenneth McGuire, once described as the “the face and voice” of the company, was placed on two years probation after he pleaded guilty to possession of proceeds of crime in March 2017.

At McGuire’s sentencing, Crown prosecutor Alex Hrybinsky stated that investigators have found that investors paid $4.8 million into Next Level and $3.1 million was paid out. However, he told Justice Allan Letourneau that there was little evidence of actual trading by Next Level.

Cory Macdonald, owner of a local supplements store and proprietor of 60 real estate units across the city, testified in front of Justice Larry O’Brien on Wednesday that he invested $95,000 in three instalments over six months. The last investment of $35,000 was in January 2017.

Crown prosecutor Alex Hrybinsky asked Macdonald how he thought the investments went.

“I ended up here, so not very well,” Macdonald said. “I never made anything and lost $95,000.”

Macdonald said he was introduced to Uitvlugt by McGregor. When questioned by Leo Adler, McGregor’s lawyer, the former Correctional Service Canada officer of 12 years told the court that Chris Uitvlugt was very convincing. Macdonald agreed with Adler when he suggested that Macdonald initially thought Uitvlugt was “a nice guy” and a “smart businessman.”

“He was a good salesman,” Macdonald testified.

Macdonald said Uitvlugt told him that in a year they could either double his money in six months or lose it all. Macdonald was so convinced that Uitvlugt and Next Level Investments were legitimate that he told his mother and his friends, many of whom are local police officers and correctional officers, about it. Macdonald told his friends that he’d guarantee their investments.

He testified that he didn’t receive a percentage or kickbacks from Next Level. He said he “thought I was helping people.”

“We were all stupid enough to believe whatever Chris told us,” Macdonald said.

On the morning that the Next Level Investments offices at 1309 Princess St. were raided by police on March 14, 2018, Macdonald said he woke up to “thousands” of text messages from his friends who had also invested with Next Level.

Macdonald met with McGregor and Louis Tavakoli at McGregor’s home the same day, though when questioned by Adler, Macdonald wasn’t sure if Tavakoli was present. A local real estate agent, Tavakoli also testified on Wednesday.

Macdonald recalled that on the table of the room they were in was a package containing paperwork and cash. Uitvlugt, who was in police custody, had instructed that the package should go to his partner, Kirstie Saxton-Robinson, Macdonald said. He added that Uitvlugt told them that the police had been called by accident, that it was all a misunderstanding with his licensing.

Macdonald said the three men didn’t know what to do or whom to trust, and they decided they couldn’t trust Saxton-Robinson.

The next day, Saxton-Robinson started to call Macdonald and McGregor, demanding the cash, Macdonald said. He agreed with Adler when he described Saxton-Robinson’s constant calls as harassment. Macdonald alleged in his testimony that Saxton-Robinson tried to blackmail him, McGregor and Tavakoli. He claims she said that she’d go to the police and say that they were behind Next Level’s dealings.

In a 20-second phone call, McGregor and Macdonald agreed to give Saxton-Robinson the cash, he testified.

“I didn’t think anyone would believe us over a crying girl,” Macdonald said.

Macdonald would be the one to hand it over as McGregor was on his way over to the police station to turn himself in. He told the court that he picked up the package from Tavakoli’s house and went to a Loblaw’s parking lot. He told Saxton-Robinson that he would park his SUV, leave it unlocked and walk away, he testified. If the package was still in the vehicle, he’d hand it over to police. He told the court the package was gone when he returned.

Macdonald testified that when he went to the police, he, too, was charged with fraud, but the charge was later dropped by the Crown.

McGregor’s trial continues next week.

— With files from Sue Yanagisawa

Twitter: @StephattheWhig

Credit union employees say high-pressure sales targets turn ‘members’ into ‘marks’

Dozens of employees from credit unions across the country tell Go Public they feel the same pressure as bank employees to meet high sales targets, often to the detriment of their members.

They’re speaking out after employees from Canada’s big five banks revealed they often push customers into expensive financial products they don’t need to generate sales revenue and hold on to their jobs.

“We brag about being better than the banks, but when it comes to upselling we’re exactly the same,” said a former longtime employee at B.C.’s Coast Capital Savings, the third-largest credit union in the country based on assets.

CBC is concealing the identities of the former employees quoted here because they still work in the financial industry or hope to do so again in the future.

Coast Capital Savings is the third-largest credit union in the country based on assets.

The former Coast Capital Savings employee says he recently quit after seeing sales targets ramp up so high “we stopped acting for our members, and only cared about the sale.”

The ratcheting up of sales targets began in 2009, he says, after the credit union brought in a new CEO from HSBC Bank, who then hired more people from HSBC and started to push the banking model of high sales targets.

  • Been wronged?  Contact Erica and the Go Public Team

“It went from giving good advice to getting clients in the door and pushing them into products,” he said.

“If I didn’t constantly push people into more debt, my manager would tell me, ‘You’re on the bus, or you’re flattening the tires.’ That was the attitude.”

Dozens of employees tell CBC’s Go Public they feel the same pressure as bank employees to meet high sales targets 2:03

‘I am concerned,’ CEO says

Coast Capital declined Go Public’s request to interview Don Coulter, who’s been CEO since 2014, saying his schedule was too full.

In a statement, Coulter said he’s concerned about the comments made to Go Public and will encourage all employees “to share their thoughts” with him directly.

He said the use of sales goals is “an important and a standard business practice” but employees are always asked to “do what is right for the member.”

There are more than 620 credit unions in Canada, and many are stand-alone financial institutions, so it’s difficult to determine how many are asking employees to meet sales targets.

Unlike banks, which are for-profit corporations, credit unions are owned by their members and aren’t beholden to the demands of shareholders or quarterly profits.

Members can elect the board of directors and collect a portion of a credit union’s earnings in the form of higher savings rates, lower loan rates or as a small annual deposit.

Canadian Credit Union Association CEO Martha Durdin says ‘there’s a difference between having targets and forcing people into things they don’t need.’ (Canadian Credit Union Association)

Canadian Credit Union Association president and CEO Martha Durdin said credit unions are motivated to serve their members.

“Unlike the banks, we’re not motivated to increase profits endlessly,” Durdin said.

She said profit margins for credit unions are low because unlike the banks, most credit unions can only operate within provincial borders — they don’t have the ability to make money internationally, for example.

“Having conversations about products … isn’t necessarily bad,” she said. “There’s a difference between having targets and forcing people into things they don’t need.”

For the most part, she said, “credit unions plow their profits back into the community.”

She declined to address concerns about sales targets that were raised in the emails Go Public received from credit union employees across the country.

‘How do you feel about selling?’

A former employee of Alberta’s Servus Credit Union, the country’s second largest, says she was recently fired because she couldn’t meet sales targets.

In her termination letter, Servus says it had “performance concerns.”

“If I didn’t try to upsell a member, my manager would ask, ‘How do you know you haven’t missed an opportunity?’

“We turned members into marks.”

april insights

As a member service supervisor, she conducted job interviews with potential tellers.

“Every interview, I had to ask ‘How do you feel about selling?'” she said. “And, ‘How do you feel about sales targets?’

“I had some staff say to me, ‘You’re just brainwashing people [about products].’ And all I could say to them was, ‘If we want to keep our jobs, this is what we have to do.'”

In a statement to Go Public, a Servus Credit Union spokesperson says the organization uses targets but “rejects any allegation that the organization puts profits before the financial needs of Servus members.” The statement says “employees are expected to always put member interests first.”

Employees at other credit unions claim the pressure to meet sales targets is so great they’ve experienced stress, anxiety, depression and gone on medical leave in some cases.

One employee described how working long hours to try to meet sales targets, including phoning members after closing to try to drum up business, makes him and his colleagues feel like “the walking dead.”

Must ‘watch their brand’

Sales targets at credit unions must be handled carefully, says Dionne Pohler, an assistant professor at the University of Toronto’s Centre for Industrial Relations and Human Resources.

“People assume that banks are maximizing profits and might have sales targets,” she said. “But people assume that credit unions are acting in the best interests of their members — not engaging in practices that would put their members at risk, or jeopardize their financial well-being.”

Credit union researcher Dionne Pohler says sales targets must be handled carefully at credit unions. (CBC )

Pohler, who recently wrote about the issue, says many credit unions are under pressure to generate enough revenue to compete with the banks — to merge and expand, and offer longer service hours and improved technology to members.

“They have to watch their brand,” she said. “If those sales targets aren’t coupled with co-operative norms and values, it can undermine member trust in a credit union.”

Largest credit union drops sales targets

Just as many credit unions appear to be implementing sales targets, Vancity, Canada’s largest credit union based on assets, decided to scrap them in late 2015.

No one from Vancity would give an interview to explain why sales targets were dropped, but a spokesperson said the credit union is moving away from a “branch-level model” to “focussing on goals for the organization.”

Vancity, Canada’s largest credit union, scrapped sales targets in late 2015. (Mike Zimmer, CBC )

In a statement to Go Public, William Azaroff, executive lead of member experience, wrote: “We believe in a culture that puts our members first and so we measure success based on the overall results of the credit union, which includes the well-being of our members and the communities where we live and work.”

Researcher Dionne Pohler says a key difference between banks and credit unions is that members who don’t think staff should be under pressure to meet sales targets can lobby for change.

“That’s the strength of the credit union,” she said. “Members can put pressure on the board to adopt the kinds of practices they would like to see adopted.”

CIBC financial adviser ‘stunned’ that federal investigation found bank customers not widely upsold

A CIBC financial adviser says she and her colleagues are “stunned” that a recent report by Canada’s banking regulator did not find widespread instances of customers who were upsold due to pressure on employees to meet sales targets.

“I can’t even explain to you how disheartened we all were,” says the financial adviser. CBC has confirmed her employment, but is not identifying the woman because she fears she would lose her job.

“We’ve been waiting for a year for this report,” she says. “It’s very hard, because it doesn’t feel accurate.”

The Financial Consumer Agency of Canada (FCAC) recently released the findings of a review of sales practices at the country’s six big banks. It was prompted by a series of Go Public investigations last year, revealing intense pressure on bank employees to sell customers products and services they may not need in order to meet sales targets.

Between May and November 2017, the FCAC interviewed more than 600 employees at BMO, CIBC, National Bank, RBC, Scotiabank and TD, reviewed 100,000 pages of bank documents and looked at more than 4,500 complaints.

The regulator found that the requirement for retail banking employees to sell products and services “can increase the risk of misselling and breaching market conduct obligations,” but also said it “did not find widespread misselling during its review.”

The CIBC employee says “there obviously wasn’t good enough research,” and that she is “doing daily harm to customers” because of her upselling.

Pressure ramped up

The financial adviser — and several employees from other banks who’ve contacted Go Public — say the pressure to sell initially eased up after media reports last year, but then gradually worsened.

“Sometimes two, three times a day, you’ll get an email wanting to know where are your sales numbers at? What have you sold today?” says the financial adviser. “Now that this [FCAC] report has come out, the [sales] pressure is 100 per cent full force. It’s every single day. ‘How many products did you sell?'”

She describes feeling “desperate” to meet sales targets — by doing everything from tacking on a savings account, to extending a customer’s line of credit, to putting customers into bank-owned investments [when another option might be more suitable].

“You’re saying to customers, ‘Let’s go over your finances. I’m here and I want to help,'” she says. “But what we’re doing is trying to find products you don’t have, that we can sell you.”

In order to find sales opportunities — or “gaps” — the financial adviser says they’re instructed to pull a customer’s credit profile, which can affect someone’s credit score.

“You don’t feel good. All the time,” she says. “You go home and you know that you told somebody that they needed to put their money into an investment because you had gaps that needed to be filled.”

In an email to Go Public, CIBC spokesperson Caroline Van Hasselt wrote: “The actions described are not representative of our culture, which is focused on putting our clients at the centre of all we do. At CIBC, we are committed to continuously reviewing our business to ensure we do what’s right for our clients every day.”

‘I feel very misled’

Michelle Bechthold of Airdrie, Alta., thinks she’s a victim of the upselling the FCAC says its review did not find to be a widespread problem. She has filed a complaint to the FCAC about a recent issue with her bank, which is now being investigated.

In December, Bechthold went to her local BMO branch and says the teller told her she “qualified for a complimentary upgrade” to her credit card.

“All she said was, ‘It’s so easy, and you’ll get all these [travel] points.'” says Bechthold.

Michelle Bechthold says a BMO teller ‘tricked’ her into getting a credit card with a higher interest rate. (Colin Hall/CBC)

But when the card arrived in the mail, instead of having a 13.9 per cent interest rate like her current credit card, it had an interest rate of 19.9 per cent, something Bechthold says the teller never mentioned.

“I would’ve never said, ‘Send it,'” she says. “That’s a six per cent increase on my interest rate. Are you kidding me? No way!”

After Bechthold complained several times, BMO apologized and gave her $150 compensation.

But she still doesn’t trust that another new card BMO sent her actually has her original interest rate of 13.9 per cent, and hasn’t activated it yet.

BMO did not respond to a request for comment from Go Public.

FCAC warns consumers

In an interview with Go Public, FCAC deputy commissioner Brigitte Goulard said she “can understand” why bank employees and customers might feel disappointed by the regulator’s report.

“The bank environment is a sales environment,” says Goulard. “If you’re not a salesperson, perhaps working in a bank is not for you … People [bank customers] need to know that the bank is not there to look after their interest.”

Goulard says the FCAC can’t address many of the concerns the public and bank employees have about selling products.

april insights

“Offering higher credit limits to Canadians or extending credit lines or offering more credit cards isn’t, per se, illegal,” says Goulard. “There are some questions about whether Canadians should have a third or fifth credit card. But that behaviour is not illegal.”

Goulard said the regulator’s investigation did reveal an unnamed number of instances of possible wrongdoing, and those cases are now being investigated, along with 4,500 other consumer complaints the agency received between April 2015 and May 2017.

The deputy commissioner says she encourages bank employees to contact the FCAC confidentially if they have concerns.

‘It’s disappointing’

Frank Allen of the Canadian Foundation for Advancement of Investor Rights says the FCAC review was too general — it didn’t name banks where problems were found, it recognized sales targets as being an issue but didn’t examine their impact, and made “vague recommendations” for banks to make improvements.

“It’s disappointing in the short term,” says Allen. “But hopefully in the long term, it will be a step that advances the interests of bank customers.”

Allen says the report is more fodder for calls for the banks to have a best interest standard, something FAIR Canada has long championed.

“It would require bank personnel to put the interests of the bank customer first,” says Allen. “Not just focusing on sales targets.”

CBA: Banks committed to high standards​

Go Public was contacted by the Canadian Bankers Association.

In a statement, CBA spokesperson Dave Bauer wrote that banks are committed to operating with high ethical standards, “which has been consistently neglected in Go Public’s reporting” and pointed to the fact that the FCAC’s review did not find widespread misselling.

“When mistakes happen, banks work diligently and quickly to make them right,” Bauer says.

‘At what cost to Canadians’

The CIBC financial adviser says she’ll try to focus on the 25 per cent of her job that is actually about helping customers with good financial advice.

“The bank should be a place you go to where you get the help, the support, the advice, and the products that you actually need,” she says. “I understand it’s a business. But to what end? And at what cost to Canadians?”

More controls needed on sale practices at big banks, financial watchdog says

Canada’s financial consumer watchdog says there are “insufficient” controls in place at the country’s biggest banks to prevent sales of financial products that are misrepresented or unsuitable for consumers, and the banks’ sales-focused culture elevates the risk that employees may flout consumer protection rules.

The Financial Consumer Agency of Canada (FCAC) released the findings Tuesday after completing a review of business practices at Canada’s Big Six banks. The review came in the wake of a series of CBC Go Public stories that highlighted allegations of questionable sales tactics as bank employees said they felt pressured to sell customers on unnecessary products and services.

The FCAC added it is investigating alleged breaches of rules of conduct — designed to protect consumers, and which banks are required to follow — that may have been identified during its review and will take action where appropriate.

“Banks are in the business of making money. We know that. But the way they sell financial products and manage employee performance, combined with how they set up their governance frameworks can lead to sales cultures that are not always aligned with consumers’ interests,” FCAC commissioner Lucie Tedesco said in a statement.

The review examined the Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada.

The FCAC said it did not find widespread misselling, defined as selling products that are unsuitable or where the consumer is provided with incomplete or misleading information, at the banks.

However, it concluded that retail banking culture is predominantly focused on selling and rewards employees for doing so and that increases the risk that client interests are not always given the appropriate priority.

The agency also said the controls these banks have in place to mitigate the risks of misselling are “insufficient” and “underdeveloped,” particularly compared to the banks’ robust corporate governance policies.

‘Inadequate protection’

The Canadian Bankers Association said Canada’s banks are client-focused with a commitment to high ethical standards and complying with the law when providing products and services to help customers meet their financial goals.

“The six largest banks in Canada co-operated fully with FCAC and we are encouraged that the review found no widespread misselling and that banks get this right the vast majority of the time,” association president Neil Parmenter said in a statement.

The Canadian Foundation for the Advancement of Investor Rights and the Public Interest Advocacy Centre said the government should work toward having one national, statutory ombudservice for financial services complaints that can issue binding decisions.

Marian Passmore, director of policy at FAIR Canada, said the rules are inadequate.

“There is inadequate protection for Canadians at banks and reform is needed. FAIR Canada calls for a best interest standard so Canadians get the advice they expect and deserve,” Passmore said in a statement.

The review was launched last April after CBC News reported that some bank employees alleged they felt pressure to upsell, trick and even lie to customers to meet sales targets. The reports also prompted the House of Commons’ finance committee to hold a series of hearings examining the allegations last June.

The federal banking regulator, the Office of the Superintendent of Financial Institutions, also last summer said it was reviewing domestic retail sales practices at Canada’s key banks, focusing on “risk culture” and “the governance of sales practices.”

TD Bank, the focus of the initial CBC reports, has conducted its own internal review and concluded it did not have a widespread problem with aggressive sales tactics.

Meanwhile, banking-related complaints handled by an industry ombudsman last year surged by 28 per cent, with credit cards, mortgages and personal accounts drawing the most customer grievances.

Complaints hit five-year high

The Ombudsman for Banking Services and Investments (OBSI), which handles customer disputes for Scotiabank, CIBC and Bank of Montreal, said it opened 370 banking-related investigations in 2017 to handle customer disputes for its clients, compared with 290 a year ago. The dispute resolution firm said last year’s surge in new cases marks the highest level the industry ombudsman has seen in the past five years.

The FCAC said in its report Tuesday that the banks are in the process of enhancing their oversight and management of sales practices’ risk.

The watchdog also plans to “implement a modernized supervision framework that will allow the agency to proactively ensure banks have implemented the appropriate frameworks, policies, procedures and processes to mitigate sales practice risk.”

The FCAC will also increase its resources for supervisory and enforcement functions, it said.

The federal government said in its budget last month it would introduce legislation that “would strengthen the Financial Consumer Agency of Canada’s tools and mandate and continue to advance consumers’ rights and interests when dealing with their banks.”

‘We are all doing it’: Employees at Canada’s 5 big banks speak out about pressure to dupe customers

Employees from all five of Canada’s big banks have flooded Go Public with stories of how they feel pressured to upsell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.

The deluge is fuelling multiple calls for a parliamentary inquiry, even as the banks claim they’re acting in customers’ best interests.

In nearly 1,000 emails, employees from RBC, BMO, CIBC, TD and Scotiabank locations across Canada describe the pressures to hit targets that are monitored weekly, daily and in some cases hourly.

“Management is down your throat all the time,” said a Scotiabank financial adviser. “They want you to hit your numbers and it doesn’t matter how.”

CBC has agreed to protect their identities because the workers are concerned about current and future employment.

An RBC teller from Thunder Bay, Ont., said even when customers don’t need or want anything, “we need to upgrade their Visa card, increase their Visa limits or get them to open up a credit line.”

“It’s not what’s important to our clients anymore,” she said. “The bank wants more and more money. And it’s leading everyone into debt.”

A CIBC teller said, “I am expected to aggressively sell products, especially Visa. Hit those targets, who cares if it’s hurting customers.”

Former BMO employee speaks out

A financial services manager who left BMO in Calgary two months ago said he quit after having a full-blown panic attack in his branch manager’s office as she threatened to stifle his banking career because he hadn’t met sales targets.

“It was like the only thing they cared about at BMO,” he said. “If you weren’t selling, you weren’t worth having around.”

This former BMO financial services manager says his manager told him to lie to customers to improve sales revenue. (Colin Hall/CBC)

He claims his manager once told him not to tell clients who wanted to invest more than $40,000 that the markets were down, because putting their money into GICs wouldn’t earn the branch as much sales revenue.

He said she also told him to attach high interest rates on mortgages and lines of credit and to not tell clients those interest rates are negotiable.

He said he was “pressured to lie and cheat customers,” but refused to do it.

More than 1,000 emails

The revelations about other banks came pouring in after Go Public revealed last week that front-line staff at TD were under pressure to sell customers products and services they may not need and that some employees were breaking the law  to hit their sales revenue targets.

Those stories, experts say, prompted the largest drop in TD Bank shares since the financial market downturn of 2009.

We are straight up told to tell false stories (lie) to sell products. – TD insurance agent wrote in an email

They also resulted in hundreds more emails from TD workers past and present, including a teller who recently stopped working in Bramalea, Ont., who said the requirement to meet ever-increasing goals was so unprofessional, “I thought this was not a bank but a flea market.”

He admits to acting unethically because he says he feared being fired.

“I bumped up credit cards, overdraft or account types just because of the pressures.”

An Ontario-based TD insurance agent wrote, “We are straight up told to tell false stories (lie) to sell products.”

And an RBC financial adviser told Go Public, “We are all doing it.”

‘Shaming’ and ‘bullying’

Many bank employees described pressure tactics used by managers to try to increase sales.

An RBC certified financial planner in Guelph, Ont., said she’s been threatened with pay cuts and losing her job if she doesn’t upsell enough customers.

“Managers belittle you,” she said. “We get weekly emails that highlight in red the people who are not hitting those sales targets. It’s bullying.”

Some TD Bank employees told CBC’s Go Public they felt they had to break the law to keep their jobs. (Aaron Harris/Reuters)

Employees at several RBC branches in Calgary said there are white boards posted in the staff room that list which financial advisers are meeting their sales targets and which advisers are coming up short.

Similar white board results are reported at Scotiabank branches in Toronto.

“The entire team can see who is keeping them down. It’s shaming,” said a Scotiabank financial adviser who told Go Public she’s taking early retirement “because this environment is not for me.”

Stressed out

Some of the big five bank employees said they’re so stressed by expectations to hit sales targets, they’re on medical leave. Others said they had to quit.

They wrote about their jobs causing “insomnia,” “nausea,” “anxiety” and “depression.”

I went into a full-blown panic attack. -former  CIBC  small business associate

A CIBC small business associate who quit in January after nine years on the job said her district branch manager wasn’t pleased with her sales results when she was pregnant.

“She came into my office and decided to harass me. I went into a full-blown panic attack.”

She said the worst part of her job was having young families in her office who agreed to re-mortgage their homes because of debt.

“We told them we were helping them, but essentially we were extending more credit so the vicious cycle would … continue and we, in turn, would make a sale,” she said.

While working in Waterloo, Ont., she says her manager also instructed staff to tell all new international students looking to open a chequing account that they had to open a “student package,” which also included a savings account, credit card and overdraft.

“That is unfair and not the law, but we were told to do it for all of them.”

Big banks decline interview requests

Go Public requested interviews with the CEOs of the five big banks — BMO, CIBC, RBC, Scotiabank and TD — but all declined.

Instead, they sent statements, essentially saying the banks act in the best interest of their clients, and that employees are expected to follow codes of conduct.

The statements did not address employees’ concerns about high-pressure sales tactics.

Calls for parliamentary inquiry

NDP finance critic Alexandre Boulerice is now calling for a parliamentary inquiry into the sales practices of Canada’s banks.

“We expect banks to be honest with their clients … and now we are learning that those employees are under considerable pressure to sell, sell, sell to boost profits of the banks,” he said. “This is so greedy. It is not acceptable.”

Federal NDP finance critic Alexandre Boulerice wants a parliamentary inquiry. (CBC)

Stan Buell, founder of the Small Investor Protection Association, agrees it’s time for the federal government to take action.

“We’ve got a culture that exists on greed, lying and deceiving people, and it’s not going to end soon,” he said. “This is why the only solution really is to have government step in and look after the Canadian people. Because I feel the Canadian people deserve better than to serve as grist for the mill of these great financial organizations.”

Federal NDP finance critic Alexandre Boulerice wants a parliamentary inquiry. (CBC)

A spokesperson for Finance Minister Bill Morneau said the minister wasn’t available for an interview, but sent a statement that says Morneau “expects all financial institutions in Canada to adhere to the highest standards when it comes to their consumer protection obligations.”

Shareholders concerned

TD shareholder Allan Best says he’s concerned about more than the bank’s bottom line after last week’s stock dip, telling Go Public, “It is my position that employees are our most important asset and we have to do all we can to keep them in good mental and physical condition.”

The emails Go Public received from bank employees suggest not only have the sales targets increased dramatically in recent years, so has the pressure to meet them.

“I want the world to know how much pressure we are all under on a daily basis,” wrote an RBC teller in Ontario.

“We hit our target and the next week, they up them again. It’s out of control.”

Calls for parliamentary inquiry follow CBC’s Go Public investigation 2:03