ASC is in TURMOIL....read on...today's national post...sounds like ASC is corrupt like many of the stocks it enforces....wonder if Rhonda is caught up in this turmoil.........
Securities watchdog turmoil
Alberta commission facing review, lawyer denies claims
Theresa Tedesco
National Post
Wednesday, March 23, 2005
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Senior officials at the Alberta Securities Commission interfered with enforcement cases, engaged in favouritism and condoned lewd conduct among staff, according to allegations contained in a confidential report prepared for the regulator's commissioners.
The National Post has learned that an unprecedented review into the conduct of the provincial watchdog's executive ranks, including Stephen Sibold, outgoing chair of the ASC, and David Linder, executive director, revealed a "dysfunctional" agency with questionable management practices, lax governance and a "toxic" atmosphere that contributed to staff departures in recent years.
According to sources, a detailed report prepared by prominent Calgary lawyer Perry Mack for the ASC's board of commissioners is based on claims made by a group of about six whistleblowers and supported in subsequent interviews by about 30 former and current employees. Mr. Mack, who was hired by the ASC's 12-member board of commissioners in January, tabled his findings in mid-February.
The extraordinary probe was ordered by Shirley McClellan, Alberta's Deputy Premier and Finance Minister, after she was advised about "allegations" into the conduct of the ASC's chair and executive director two months ago. According to a one-page letter sent to the ASC's board of commissioners on Jan. 12, Ms. McClellan stated "the allegations appear to be sufficiently serious to justify further investigation." The Finance Minister, who is responsible for the ASC, told the board to report back to her on "what actions the commission intends to take with respect to these complaints."
Among the complaints current and former staff reported to Mr. Mack, sources say, are allegations that executive managers obstructed the work of enforcement staff by directly influencing whether the regulator would pursue cases against certain companies and individuals.
"Every week we had to justify our cases. It was routine that staff was asked to drop cases," said a source familiar with the regulator who asked not to be named for fear of reprisal. "It was made clear that certain people and companies were not to be troubled and were being protected from regulatory activity."
Messrs. Sibold and Linder did not respond to repeated calls or e-mails. However, Alan Hunter, a lawyer representing the ASC's nine part-time commissioners, said yesterday that "the matters are internal to the commission and are highly confidential."
In response to questions sent to Messrs. Sibold and Linder by the National Post, Mr. Hunter said, "Many of your allegations are not accurate."
The allegations raise troubling questions about the credibility of one of Canada's largest securities regulators. The ASC is responsible for governing all publicly traded companies in Alberta, including some of the largest oil and gas companies in Canada. The provincial regulator administers Alberta's securities act, rules and regulations and it also oversees the TSX Venture Exchange.
Sources told the Post that most of the ASC's senior management have revolted against the chair and his lieutenant over what they claim to be an oppressive work environment that has fostered deep tensions and resentment among the rank-and-file.
Since Mr. Mack tabled his report to the ASC board of commissioners almost six weeks ago, sources say a rift has ensued and that the most senior executives are now barely communicating with the rest of the staff.
"The atmosphere has become such that we cannot carry out our business," said a source familiar with the regulator who asked not to be named. Another official described the atmosphere as "untenable" and "poisonous," saying that "there isn't much work getting done these days. People are hunkered down."
According to sources familiar with the complaints, Messrs. Sibold and Linder are said to have fostered a "cowboy mentality" that encouraged favouritism, especially among female members. "The chair acts like a horny teenager," said a source who asked not to be named.
At the same time, sources say senior lawyers, accountants and investigators at the ASC chafed at what they described as inappropriate sexual behaviour in the fourth-floor executive suites, including the frequent circulation of lascivious e-mails on the regulator's computer system and an inflatable sex doll prominently displayed in the offices.
"Skill and intrinsic ability didn't have much to do with how you were evaluated in performance appraisals and remunerated," said a source who filed a complaint with Mr. Mack. "The route to the top was to flatter the chair, wear low-cut blouses and shake what you've got."
Mr. Mack, a well-regarded corporate lawyer, declined to comment for this article, saying, "everything I do or don't do is confidential."
Messrs. Sibold and Linder are said to have responded to the allegations in Mr. Mack's report. The board of commissioners has been meeting this week to decide its next course of action. The group is also required to report back to the Finance Minister.
In the meantime, many of the ASC's 119 employees fear recriminations in the wake of the unprecedented investigation and ensuing scandal. Members of the staff are particularly worried that Messrs. Sibold and Linder are currently conducting performance reviews of all employees, which will determine their salaries and bonuses for fiscal 2005, beginning on April 1.
"Generally, people are feeling harassed," said an insider who asked not to be named. "I think a number of people expect life to become unpleasant."
Beleaguered commission employees blame the board of commissioners for failing to address their concerns, especially because the human resources committee of the board receives all exit interviews of senior managers who quit. Sources say those interviews were littered with serious complaints against the ASC's executive management. "If there had been any kind of oversight, these things wouldn't be happening," said a disgruntled official.
Meanwhile, Finance Ministry officials are currently assessing candidates to replace Mr. Sibold. Last October, the provincial government announced it would not reappoint Mr. Sibold to a second five-year term. He was expected to leave the ASC at the end of March, however, Mr. Sibold's employment contract entitled him to stay on until May 7 and an order-in-council was signed yesterday to accommodate an extension. (His two-year term as chair of the Canadian Securities Administrators ends next week.)
Mr. Linder continues to function as the commission's chief administrative officer, a post he has held since 1997. Unlike Mr. Sibold, he does not sit on the board of commissioners.