“To create minor public relations disasters for companies and organizations I dislike.”
– Virgil Griffith, on why he created WikiScanner
The article below appeared in the Financial Post yesterday – thank you JJ for the hook up.
Admiteldy, this group is hardly that big, but you can imagine that 10, 20 or 50 of these popping up and it could start to become a pesky burden for a large oligarichal company, like, say, a Canadian bank.
I suppose this could be the longtail of protest and dissent. Made possible because the internet allows these frustrated consumers to band together.
Hey, this just came to me. You know who else benefits from this technology? Lawyers in class action suits.
Tuesday, March 04, 2008
Facebook helps rally dissent over ABCP losses
Jim Middlemiss, Financial Post Published: Tuesday, March 04, 2008
A Facebook site created to advocate on behalf of retail investors in asset-backed commercial paper is gathering steam and members plan to take their message to the floor of the Bank of Nova Scotia annual general meeting today in Edmonton.
ABCP investor Reid Moseley plans to attend the meeting on behalf of Bank of Nova Scotia shareholder and independent Ontario financial analyst Diane Urquhart. Along with fellow ABCP investors Brian Hunter and Layne Arthur, the trio plan to attend today’s meeting to raise questions about the bank’s participation in the ill-fated, $35-billion non-bank ABCP market, which seized last summer.
The men collectively have more than $1.2-million of ABCP in their investment accounts with Canaccord Capital. Canaccord was sued last fall by two British Columbia holders of ABCP and in its legal response, the financial investment firm denied liability and blamed the bank’s related company, Scotia Capital Inc., which sold Canaccord the paper it then distributed to its clients. Canaccord has disclosed it has $269-million in exposure to ABCP, which is believed to be spread among 1,400 investors.
“We’re trying to get the proper proxies sorted out,” said Ms. Urquhart, adding she has identified as much as $770-miillion in ABCP held by retail investors at Canaccord and the credit unions.
“The reason we’re going to Scotia is that Canaccord received its non-bank ABCP from Scotia Capital Markets and … Scotia is a party joined to a lawsuit relating to Canaccord’s allegation that Scotia is an expert and it relied on Scotia and it has joint responsibility.”
As well, she said, most of the Canaccord investors who have come forward on Facebook are holders of paper in the Structured Investment Trust III, and Bank of Nova Scotia is the issuing and paying agent. “They were an instrumental party to the operation of the trust.”
Bank AGMs have a question-and-answer segment and the men plan to use Ms. Urquhart’s proxy to make a statement and “request that Scotia pay up money,” she said.
Mr. Arthur said he has 25% of his net worth, mostly proceeds from the sale of a family farm, tied up in ABCP. “All the brokers tell me how safe it was,” he said of the $434,000 he has invested in ABCP. “They didn’t realize what the heck it was,” said Mr. Arthur, who plans to attend the AGM and hand out a letter the group was crafting late last night.
Brian Hunter, who started the Facebook site, said “we’re just trying to get our voice heard.” It’s believed to be one of the first times investors have galvanized around a social networking site to organize and push for compensation.
The site now has 56 participants, including some non-ABCP holders, such as journalists, lawyers and analysts. “It’s been very good and a little bit cathartic to find out there are others with the same problem,” Mr. Hunter said. He said Facebook is “a very, very simple tool that allows you to communicate with a large number of people with very little effort. It’s a good way of sharing information and blowing off a little bit of steam.”
Copyright © 2007 CanWest Interactive, a division of CanWest MediaWorks Publications, Inc.. All rights reserved.