Resources to prosecute white-collar crime lacking

Hey there, time traveller!
This article was published 28/01/2021 (1776 days ago), so information in it may no longer be current.

In an interview with the Free Press in December 2018, Gary Ng said nothing that would raise red flags of concern.

Other than a slightly arrogant attitude not uncommon among many smart, accomplished business people, Ng fit the mould of a brash, successful entrepreneur.

He’s since been accused of perpetrating a multi-million dollar fraud.

While not a particularly well-known figure in the industry at the time, that would not, on its own, discount his credibility.

Everyone has their own personal narrative that they prefer when telling their own story. Ng’s was redolent in the classic “son-of-immigrants-strikes-it-rich.”

Since then, investment industry regulators have alleged the young entrepreneur falsified documents and misled lenders, and he has been stripped of his financial services industry holdings, including ownership of PI Financial Corp. for which he paid $100 million in November, 2018.

His insouciance and happy demeanour during an interview two years ago would likely charm any casual observer.

But one would think that it would take more than that to satisfy multi-million dollar lenders, stewards of multi-million dollar asset management firms and even the regulators themselves.

It took two years before the Investment Industry Regulatory Organization of Canada (IIROC) filed official notice of hearing and statement of allegations against Ng and an associate. And that only happened because of internal due diligence at PI Financial.

In trying to secure loans totalling $172 million, IIROC alleges that, among other things, Ng doctored account documents to make them look like the accounts contained $91 million rather than the $1.9 million they actually contained.

In its statements of allegations IIROC said he did not co-operate with an investigation and did not appear at a scheduled meeting.

The Globe and Mail recently reported that he again was a no-show at a scheduled hearing earlier this month.

The Globe does report that regulators were investigating trading activity more than a year before the formal action was filed.

IIROC’s contention that its purpose is to protect investors and that no members of the investing public were put at risk because of Ng’s alleged actions.

That’s some comfort for now, but it might also make more people worried about the institutions to which we entrust our savings.

The fact that Ng has yet to be formally penalized further drives concerns that exist in this country that white-collar crimes are not as vigorously prosecuted as the more run-of-the-mill crimes in our society.

There are plenty of reasons for that, not the least is that the burden of proof requires much more resources to produce for financial fraud than is the case for more mundane criminal activity.

Regulators across the entire spectrum of our society lack the resources to be able to do as thorough a job as we all imagine they are mandated to do.

But since many white-collar crimes are perpetrated by people with some connection to wealth it fortifies the impression that there are two different categories of justice — one for the rich and one for the poor.

Ng is almost certainly not free and clear.

But then again… if IIROC believes the public was not affected by his actions and if the lenders who Ng allegedly duped with phony documents decide not to pursue litigation out of embarrassment or concern about their own brand, and if Ng is half as clever as he led on to anyone who encountered him, then it is not inconceivable that he could continue to escape harsh punishment for some time.

Ng has already stood up IIROC on a couple of meetings and an extensive investigation by the Globe and Mail could not determine his whereabouts.

It is sad to think about a potential scenario where overworked regulators and prosecutors are faced with a defendant with expertise in the subject matter and plenty of resources at his disposal to avoid prosecution.

Contrast that with an average Joe, down on his luck, that misses a loan payment or runs afoul of some sort of financial commitment and the devastation that can cause a family.

It’s never a good look for our society and its alleged commitment to rule of law.

martin.cash@freepress.mb.ca