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| Watch the regulator as takeover date nears |
| Berkshire's Role In Manulife Merger Clear, Critic Says |
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Barry Critchley Friday, August 31, 2007 Today we should know whether the takeover of Berkshire Investment Group by Manulife Financial has been completed. That deal, with an undisclosed price, was announced in late June with a closing slated for the end of August. The deal requires regulatory approval. In June, both parties were positively salivating at the prospect of creating an organization with a sales force of 1,500 independent advisors and a business with about $19-billion in assets under administration. "This agreement is a natural fit for Manulife," said Paul Rooney, chief executive at Manulife Canada. "When coupled with Manulife Securities, this will double our number of wealth-management advisors across Canada and triple assets under administration in that business. This increased distribution capacity will add a significant amount of high-quality business to our Canadian operations." Bob Levis, chief executive of Berkshire, said: "This sale reflects the continuation of our overall strategy to keep building momentum for our independent advisors and their clients. We are committed to ensuring our clients continue to receive high-quality service and are very pleased that Manulife Financial is the purchaser of our business, since they share our passion for service and providing advisors and clients with a broad array of products and services." The involvement of the regulators will be key. Based on reaction to yesterday's column on the lethargy by regulators involved in investigating Berkshire and its former star producer, Ian Thow, who is alleged to have confiscated more than $30-million of clients' money, a lot isn't expected. The Mutual Fund Dealers Association has spent two years-plus investigating and hasn't reached a conclusion. The rationale: It's very complex work. One caller claimed: "This is the biggest single alleged fraud in the MFDA history and everyone goes about their business like, 'Not my job.' " Others contend that the MFDA, which must OK the takeover, should enforce its rules, which they say are clear and simple: Berkshire is responsible for the activities of its employees and must supervise them at all times. IDA/OSC's inaction
The
snail-like response by the
regulators to the Berkshire/Thow
issue reminds me of a story relayed
a couple of months ago by a senior
executive at a bank-owned dealer.
The executive said it fired an
employee for what amounted to
money-laundering. A week or so
later, the employee turned up at
another bank-owned dealer. |
