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Bruce Livesey

Edward Krupa

Thieves of Bay Street
Bruce Livesey
Random House Canada

You can't escape the sense of personal grief in the many stories that Bruce Livesey compiles in his sobering trek through Canada's long and shameful history of financial mismanagement and fraud. Whether it's a crooked adviser or an ethically challenged financial institution pulling the wool over people's eyes, the victim is always the same: you, the retail investor. At least, it's not hard to imagine yourself or a close relative playing proxy for any of the irreparably harmed Canadians laid bare in the book.

That interwoven theme is what gains traction with readers in helping them understand that they are indeed at the bottom of the food chain in Canada's financial advisory and marketing machine, or as Livesey calls it, "a wealth destroyer, a parasitic reaper of money from the middle and working classes."

It's an important message to hear for anyone with investments at a financial institution, large or small, including mutual funds or other supposedly safe vehicles.

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I can wholly concur with the book's findings on both a personal and professional level, as it is an excellent reflection of much of the work I've seen firsthand as a forensic accountant over the past 30 years. Having investigated many of the cases detailed through the chapters, from the never-ending saga of Nortel to the more recent scandal enveloping Sino-Forest, I can say for certain that Livesey captures not only the pertinent facts but also much of the mood, and, more significantly, the tragedy experienced by countless, risk-averse retail investors.

Thieves, however, is not a bemoaning journey that readers will look to brush quickly aside, hoping that similar misfortune will not touch their own lives. Rather, Livesey arms investors with a sense of hope and purpose with recommendations on how to be more protective and proactive in avoiding losses in the future. In this war, knowledge is the prized materiel, and the book is packed with it.

Conspicuously absent from Livesey's monograph are examples of the good guys successfully riding to the rescue, protecting the innocent from the onslaught of fraudsters. But this is not for lack of balance. His criticisms of the regulatory and enforcement institutions are thoughtful and fair. He neither leaves out mitigating facts nor otherwise paints an impartial picture of enforcement in Canada because there is simply no need. Unfortunately for investors, the circumstances are simply that investors have very little protection in this country.

Livesey delineates the bungled enforcement efforts of the provincial securities commissions, the RCMP's IMET, and quasi-regulator IIROC. And he sums up the problem well in saying that "the very idea of putting a CEO or member of the establishment in jail for stealing other people's money seems, well, just too un-Canadian for the regulators." The message is clear that Canadian investors must act decisively in their own interest. Imported criminals know that Canada rarely investigates financial swindlers. Prosecutions are even fewer, and convictions are rare.

Thieves is well written, easy to read and packs a punch, chapter after chapter. Those wanting additional details should also consult the book's extensive source notes.

L.S. (Al) Rosen is a forensic accountant with Accountability Research Corp., and co-author of Swindlers.

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