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EQ Bank now 2.3% (up from 2%)
May 29, 2017
8:20 am
frank87
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NorthernRaven said

My understanding from the OSC allegations document is that an HGC vice-president went through Home's own Whistleblower/ethics proceudures in early June 2015 to indicate to the board that he believed HGC was in violation of disclosure rules. HGC finally went public July 10 (causing a major drop in the stock proce); what public statement (if any) they might ever have made had their hand not been forced by the "whistleblower" is unknowable.

The OSC position is that the facts known by February 10th required disclosure then; they also indicate that the July 10 disclosure was not sufficiently informative.  

This is what confounds me: Home boasted 2 senior OSC officials at the time, one of whom was a former chair of the OSC who led the investigation into the income verification issues in late 2014. The Board ultimately signed off on all disclosures made by the company. What gives?

It should be noted that the OSC's allegations are not proven. So let's give the company a chance to respond to them.

May 29, 2017
8:44 am
NorthernRaven
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frank87 said

This is what confounds me: Home boasted 2 senior OSC officials at the time, one of whom was a former chair of the OSC who led the investigation into the income verification issues in late 2014. The Board ultimately signed off on all disclosures made by the company. What gives?

It should be noted that the OSC's allegations are not proven. So let's give the company a chance to respond to them.  

One would have to find out what the board knew of the internal investigations, how involved they were in the analysis of the consequences of the various remediations, and how committed the former OSC members were to the spirit of the disclosure rules, rather than trying to torture their interpretation of the letter of them to avoid a disclosure that would obviously cause problems for Home.

The OSC's allegations aren't complex. They are based on Home's own knowledge as reported in Home's own documents, and make a compelling case under any common sense definition of "material", as the 20% stock drop when they did disclose shows. In this sense, Home is "guilty" - their only hope is that the legal definition of "material" and whatnot in the disclosure regs is convoluted enough so their actions don't violate it, but speaking as a citizen, shame on them if they are.

May 29, 2017
4:17 pm
User230
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NorthernRaven said

You have seriously misunderstood CDIC's "fraud not covered" concept. If a Nigerian prince convinces you to send him all your deposits, he has committed fraud on you, and CDIC obviously will not cover your losses. If a teller at Bank X somehow siphons your money away, it will be up to you and the institution and other authorities to work things out - the bank is solvent and CDIC isn't involved.

But if some latter day Nick Leeson manages to blow all of Bank X's money (whether as an employee or external scammer), no matter how, and they can't redeem their liabilities, CDIC is ultimately responsible for the repayment of all legitimate deposits within their limits, no matter how Bank X gets into an insolvent position, whether fraud, stupidity or little green martians. It is effectively a blanket guarantee.  

I disagree.
In their website. Fraud is a type of serious financial or accounting irregularities or improprieties. They talk about it in internal wrong doing document.

"fraud or any other serious financial or accounting irregularities or improprieties"

http://www.cdic.ca/en/about-cd.....arch=fraud

May 29, 2017
5:47 pm
NorthernRaven
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User230 said

I disagree.
In their website. Fraud is a type of serious financial or accounting irregularities or improprieties. They talk about it in internal wrong doing document.

"fraud or any other serious financial or accounting irregularities or improprieties"

http://www.cdic.ca/en/about-cd.....=fraud  

Again, you do not quite comprehend what you are posting. That is CDIC's policy guideline for internal wrongdoing, i.e. CDIC employees acting improperly within the CDIC. It has nothing to do with CDIC guarantees, as, again, those guarantees to depositors are NOT voided by any actions whatsoever at member institutions.

May 29, 2017
6:05 pm
User230
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NorthernRaven said

Again, you do not quite comprehend what you are posting. That is CDIC's policy guideline for internal wrongdoing, i.e. CDIC employees acting improperly within the CDIC. It has nothing to do with CDIC guarantees, as, again, those guarantees to depositors are NOT voided by any actions whatsoever at member institutions.  

I still disagree. I will go with the evidence I have provided. Fraud is what they have discussed in that document. It also is what I understand from looking at other definitions of fraud.

May 29, 2017
6:25 pm
Loonie
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Looks to me like User230 may be correct.
Government of Canada site says clearly: "CDIC does not insure:
losses due to fraud or theft".
https://www.canada.ca/en/financial-consumer-agency/services/banking/deposit-insurance.html

However, for them to deny reimbursement, I think it would have to be proven that HCG dealt fraudulently with our money, which has never been alleged. The people who are alleged to have been under-informed are the shareholders.

I am not a lawyer and in no position to offer a legal opinion.

May 29, 2017
7:25 pm
Norman1
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This is the text from the Government of Canada page:

Deposit insurance
From Financial Consumer Agency of Canada

Deposit insurance protects your savings if your financial institution fails. [1]

You don’t have to apply or pay for deposit insurance. The Canada Deposit Insurance Corporation (CDIC) automatically insures your eligible deposits up to $100,000. CDIC insures deposits held in Savings and chequing accounts. Your deposits and products must be held in Canadian dollars at a CDIC member institution.

Most Canadian banks are members of the Canada Deposit Insurance Corporation (CDIC).

CDIC does not insure:

• losses due to fraud or theft [2]
• mutual funds
• stocks

My impression from [1] is that deposit insurance protects deposits against losses when an institution fails. Period.

[2] says that should a depositor lose his/her deposit because of fraud or theft, deposit insurance does not apply to such losses.

Not obvious to me that [2] also modifies [1] to exclude deposit insurance from applying when an institution fails because of fraud or theft.sf-confused

May 29, 2017
7:45 pm
Saver-Mom
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If they fail it will be due to erosion of investor confidence.
"Fraud" occured years ago.

May 29, 2017
7:46 pm
Bill
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Norman1, I agree. The CDIC site indicates coverage occurs in a failure, no conditions attached, i.e. if the fi fails due to fraud, CDIC coverage kicks in for depositers.

I think what is meant is that if an fi is defrauded or suffers theft CDIC does not jump in to help the fi with its losses, the fi has to safeguard its clients' deposits with its own funds, reserves, capital, etc., and the fi continues and all is well. (Presumably the fi pursues legal action against the fraudsters and tries to recover what it can.) If the fi ultimately cannot survive the fraud and later fails at that point CDIC kicks in for the clients. I'm no expert but that's how I'd think it goes. CDIC is for consumers, not for financial institutions.

User230, I agree with NorthernRaven - from what I can see the document you cite relates to the internal CDIC workplace only. Check out the title of the document at the link you gave.

May 30, 2017
1:52 am
Loonie
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I wouldn't want to count on any of our interpretations.

This reminds me of another page on the Government of Canada website having to do with CPP where it says that after age 65 you don't have to pay into CPP (or something like that - it's been a few weeks since I read this). It was only after a phone call and being referred to another page that I was given to understand that this was not the whole truth. In the case I was calling them about, the person still has to pay after 65 because you are only exempt if you have opted concurrently receive CPP. If you opt to postpone it and continue working to some degree, or, even worse, are self-employed, they will continue to ding you for more payments - double in the case of self-employed. You will not likely ever collect on those extra payments because they contribute very little to the net result, especially if part-time, which is the most likely situation, so it's a cash grab. However, it was obvious from the way the woman on the phone handled my call that she had encountered this misunderstanding before.

Thus, I would not want to put too much confidence in the sentence Norman as labelled (1) above. I would assume it has qualifications. In this case, they at least appear to be on the same page.

I still don't think that "fraud" would be provable to apply in this case, but I think "plain language" has failed us.

May 30, 2017
5:46 am
Bill
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Norman1, you are correct, the reason for the failure is irrelevant. While fraud per se is not covered, if fraud ultimately causes an fi to go into failure (bankruptcy) then that failure triggers CDIC. This was confirmed by the good-natured CDIC officer I spoke with this morning - he seemed amused at what he took to be my idea that CDIC would go around compensating victims of random frauds. (We're way off the EQ Bank topic here!)

May 30, 2017
5:06 pm
User230
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Bill said
Norman1, you are correct, the reason for the failure is irrelevant. While fraud per se is not covered, if fraud ultimately causes an fi to go into failure (bankruptcy) then that failure triggers CDIC. This was confirmed by the good-natured CDIC officer I spoke with this morning - he seemed amused at what he took to be my idea that CDIC would go around compensating victims of random frauds. (We're way off the EQ Bank topic here!)  

A bank fabricates documents. It makes up what everyone had to confuse and miss lead.

If the CIDC can't distinguish what is fake and what is real for whatever reason. They will not pay.

For a bank to do this would be crazy. It would ruin lives and make them face jail time probably. It is possible though.

Here are a few scenarios:

A user fabricates documents showing that they had 100,000 at a bank but really only had 20,000. This user colluded with the failing bank. He and the bank made the documents show 100,000. And they split the profit. If the CIDC sees evidence of this or information that is suspicious (like large contributions late in the life of a failing bank) it will likely not reimburse. As a suspect of fraud.
------
Lets say that a bank employee/employees are able to cause fraud by giving money to government employees. If they find out that they put money in their pockets or pockets of others than they will not give that money back to those people. For example for just being a customer your given 5000 dollars. Because your related to someone that is a bank manager. They will not reimburse that 5000. Or your a lucky random person they gave 30,000 out to as part of a marketing ploy gone wrong (like a lottery or something for making transactions) or fishy stuff like this near the end of a bank life. They would likely not reimburse that money.

A person pushes and pulls money from his account near the end of the life of a bank. He says he didn't do it someone else did (the someone else is someone they know but they act like they don't know). He asks for the full amount. From CDIC as someone stole it from their account.... Limbo than becomes reality as the bank cant reimburse and CDIC needs to investigate.

If you do strange activity (for fraud purposes or no fraud purposes) with your bank account it might take time to get CDIC insurance or you might not get it.

As mentioned before. If the bank messes around with accounts and CDIC has major issues. It could be seen that they might not be able to reimburse. I would keep my own records but even those could be fabricated....

The fraud possible is endless. So, you must understand why they left it so broad and unspecified. Fraud comes in many forms, most never seen before.

I want to make sure people understand. These ideas are extreme. It is very unlikely things like these would happen. It is possible however.

June 1, 2017
3:46 am
threeoakwest
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Could someone please let me know why a discussion of CDIC and bank default is occurring on the EQ pages?
Has EQ done something wrong that I should know about. I have some money at EQ.

June 1, 2017
4:15 am
fabafter50
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I was wondering the same thing threeoakwest. Things have gone a bit off the rails on the forum. Relevant subjects that should be left in the same category are getting split up and others are all over the place like this one. EQ is fine.

June 1, 2017
3:00 pm
Loonie
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I don't think EQ has done anything wrong. However, they reacted proactively to take out a large line of credit and raise their interest rate when the kerfuffle with HCG started because they were afraid of contagion in terms of withdrawals.

June 17, 2017
7:24 pm
mattchoo
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If you had several times the $100k CDIC limit... how would you distribute the funds amongst several savings accounts at different institutions? Given that EQ Bank is 2.3% right now, and Tangerine is 3%+ (but is ending soon). Wish to maximize return and minimize risk/exposure by trying to ensure that the funds are insured.

June 17, 2017
10:55 pm
Loonie
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mattchoo:
It depends on a few things.
Can you use joint accounts to cover some of your deposit needs or you will be a solitary account holder?
Do you feel more comfortable with CDIC deposit insurance or provincial credit union deposit insurance, or does it matter?
How soon might you need to access the money if something went very wrong, and how much might you need to access?

Virtually all, if not all, banks, trust companies, and credit unions offer coverage to 100K. A joint account allows you another 100K. And Oaken doubles that because it has two CDIC accounts.

June 20, 2017
7:10 pm
mattchoo
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Loonie said
mattchoo:
It depends on a few things.
Can you use joint accounts to cover some of your deposit needs or you will be a solitary account holder?
Do you feel more comfortable with CDIC deposit insurance or provincial credit union deposit insurance, or does it matter?
How soon might you need to access the money if something went very wrong, and how much might you need to access?

Virtually all, if not all, banks, trust companies, and credit unions offer coverage to 100K. A joint account allows you another 100K. And Oaken doubles that because it has two CDIC accounts.  

How might a joint account help me get another $100k coverage? Is account under person X, different than account under person X & Y?

Is there any difference between CDIC and provincial coverage?

I would need quick access to all the funds, we are going to use for downpayment for a house.

What do you mean Oaken has two CDIC accounts?

June 20, 2017
7:22 pm
User230
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mattchoo said

How might a joint account help me get another $100k coverage? Is account under person X, different than account under person X & Y?

Is there any difference between CDIC and provincial coverage?

I would need quick access to all the funds, we are going to use for downpayment for a house.

What do you mean Oaken has two CDIC accounts?  

CDIC is back by the Canadian government. Although I think the banks pay, just like provincial insurances, to be members.

Provincial Insurances is not necessarily backed by any government. Instead it's back by a insurance corporation that the banks pay into to be a member.

June 20, 2017
10:14 pm
Loonie
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mattchoo said

How might a joint account help me get another $100k coverage? Is account under person X, different than account under person X & Y?

Is there any difference between CDIC and provincial coverage?

I would need quick access to all the funds, we are going to use for downpayment for a house.

What do you mean Oaken has two CDIC accounts?  

re: CDIC insurance. Yes, you have the right idea. Each individual gets 100K coverage plus two people together in a joint account get another 100K. Total for 2 people can be 300K in savings. You should read the CDIC website for all the details to make sure you haven't exceeded coverage, for your own protection.
In addition, Oaken offers twice as much CDIC insurance because they have two CDIC-insured financial institutions - Home Trust and Home Bank. So, the same two people could have 600K coverage with Oaken.

Yes, there is a difference between CDIC coverage and provincial credit union coverage. CDIC is backed by government, although it has its limits. Credit union coverage is not backed by government; they have their own provincial systems. With the latter, specific rules depend on which province you are in. In terms of dollar amounts of coverage, they are similar, but for more details you should read up on each as there is too much to repeat it here. Ontario credit unions are going to increase their coverage; I think it's next year but amnot sure.

The question about how soon you need access is related to the insurance and also to how far ahead you are planning the purchase. You need to feel confident that the financial institution in which you put your money will remain solvent and that you will therefore be able to get your money out quickly. While there is insurance, you can't be certain that your funds will be available immediately after a bankruptcy. If you are at the stage where you are actively looking for a property, you won't want to use Oaken as there is an active risk of bankruptcy. If you're not, you could consider 30 day terms at Oaken. A lot depends on how soon you plan to buy and how much you are investing.
We will try to help you, but, for your own protection, you should verify anything you read here and make sure it's right for you.

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