5
Sep

Manulife class action suit in Canada

Bay street suing bay street - So there's been a class action suit launched against Manulife by a bunch of crazed and angry investors.  Well, they're angry anyway, the crazed part is my personal opinion :).

The gist of the suit is that Manulife didn't disclose their exposure and losses during the market crashes of 2008.  I expect that by extension, investors put their (or more likely, other peoples' ) hard earned money into Manuilife stock after a careful evaluation of the numbers.  Since 'the numbers' were apparently off, the investors ended up with a bad investment.

It's worth noting that the financial post article I linked to above doesn't conclude that Manulife actually failed to disclose the loss.  I trust that's either been proven, or will have to be proven by the suit.

The second thing they don't show in the article is whether these investors actually lost anything.  Quoting the article which seems to be quoting the suit, they said "The claim also seeks common law damages for negligence, negligent misrepresentation and unjust enrichment".  Wait, what?  They're suing because Manulife was bad, not because they lost money?  How does that make any kind of sense?

What's worse is, the news of this lawsuit will almost certainly depress Manulife's share prices, if it hasn't already.  Investors suing over bad performance, causing further bad performance.  Aaaalrighty then. One might wonder if these investors didn't sell just prior to launching the suit, knowing the price would drop based on their actions - and if so, is that actionable against them?  Manipulating stock prices like that?

Of course, for the average investor, basing your decisions on false information should be actionable.  But is that who's doing the suing here?  You know better than that - this is Bay street suing Bay street.  The lawsuit is being handled by Siskinds LLC, lawyers with a client list of large firms as long as your arm.  'nuff said about lawyers on this one I'm sure.  And the lawsuit was launched by The Ontario Ironworkers Pension Fund.  Sure enough, they proudly proclaim they own a 12,500 square foot building for 'investment purposes', yet the 15 people employed by the pension fund occupy the entire building.  Hey, I'm just saying, that sounds like maybe the SECOND bad investment decision you've made recently. Buy a building in Toronto, then rent it to yourself for investment purposes :facepalm:.  More like 15 people taking up a 12,500 square foot building in Toronto seems pretty posh to me.  Check out the google street maps view. (spin around the streetview, it's the red brick building on the corner - that's taken up by 15 people only?)  In any event, pension fund bashing aside, this is hardly a mom and pop scenario.   The second entiy named is Leonard Schwartz.  Turns out, he's a dentist.  Now I love dentists as much as the next person :) but clearly, they're using entities that are hardly the average person.  This is big money suing big money and it's probably about big money.

The lawsuit would also make it seem like Manulife deliberately lied - does anyone believe that?  I don't. You might also conclude that Manulife was way overexposed somehow, and again, I don't buy that.  Unlike most publicly traded entitites, Manulife is a life insurance company and that means their investments are regulated and monitored by the government - they're not allowed to be too heavily exposed.  And how's the government doing on that job?  Look around, our financial system is the most solid in the world - and that includes Manulife.

The reality is, you can't trust publicly available information in many cases, particularly if it's provided by the entity itself.  Such information is going to be biased, even if inadvertently.  And most active investors who are individuals are going to be basing their investment decisions on factors nowhere near as complex as underlying investments of the company.  That's only done by big pension fund managers seeking to justify their decisions and offload repsonsibility.  And that's why this class action lawsuit ain't a class action, it's just bay street suing bay street.

22
Aug

Redwood Options - spammers and scammers

So I received another spam email recently. The body of the email is nothing other than this:
Our Technology Alert
www.redwoodoptions.com

Right from the get go, I have not signed up to receive emails from these people (or from random trading companies). Which means they are spammers at a minimum. And being a spammer has a high correlation with other unsavoury activities - like maybe scamming. Further, I believe that these minimalized emails that we're seeing these days are actually the result of hacked email accounts frequently. I don't know if they're using hacked email addresses, but it's possible - again, it's correlated.

So I did some digging, here's what I did for research:
1) I Googled their phone number. Nothing of interest there. Well, perhaps of interest simply through omission. When I google my phone number, there's lots of listings about the web that clearly tie the number to my business and me personally. In fact when I google my phone number, I get a picture of me from Google circles. With redwood options, there's nothing like this with their phone number. At a minimum, a toll free number doesn't mean anything, as they're readily available. Having two international toll free numbers though does make me nervous - where ARE these people located? Let's try and find out.
2) I checked out their website. That's fine, I'm not going to suggest someone's business practices are dependent on how their site looks. However there's a very telling symptom here - there's no physical contact information on their website. Any financial company should clearly have a physical location. Heck, I work from home and my address is on my website (not that anyone ever drops in). The very fact that they have no physical contact information is a huge red flag and an immediate STOP in my opinion. They could be located anywhere in the world (which is fine I guess), except that they've taken steps to ensure you can't reach them other than by phone or email. Very suspicious.
3) Who owns their website? I did a "whois" which is the internet's way of saying 'who owns this site?'. Again, we see an entity that's taken specifics to hide. Their whois information is 'hidden' behind a privacy wall. They've registered their domain and specifically hidden their contact information from public view. Can you smell that stink yet?
4) Domain name servers. Every website has to have domain name servers, typically run by an external hosting company. I checked their DNS, no information I could glean here.
5) Hosting. I pinged their website and came up with an IP address of 199.83.130.9. This information frequently leads us to some interesting tidbits, because the hosting provider they choose can speak volumes. In this case it appears they're using Incapsula out of California in the U.S. to host. Nothing specific there.

In the end, these folks are distributing their message using spam email techniques and are specifically attempting to remain unreachable in any way other than a phone or email address. They're spammers,and possibly scammers - be warned.

Back to Top