A 71-year-old lawyer from Etobicoke has been charged with money laundering in connection with a two-year international drug investigation by the RCMP that has resulted in arrests and freezing of assets worth more than $7 million.
On Thursday, police officers raided the Steeles Ave. office of lawyer Kenneth James, as well as a home on Willowridge Rd. in Etobicoke.
James has been charged with money laundering, possessing the proceeds of crime and fraud over $5,000.
A 61-year-old employee, Rosemary Cremer, has also been charged with money laundering and possessing the proceeds of crime.
Cremer shares a residence with James, according to Det. Insp. Derek Matchett, of the RCMP’s Integrated Proceeds of Crime unit. The Etobicoke home raided Thursday was purchased by Cremer in 1993, property records show.
Matchett said the RCMP began a two-year investigation into James shortly after an international drug investigation began in May 2010.
That investigation has led to arrests and the freezing of $7 million in assets, he said. Matchett said he cannot talk about the drug investigation because it is currently covered by a publication ban.
“This is a very complicated case and . . . we have a lot of work ahead of us,” he said Friday. “What we’re talking about is drug traffickers who make millions of dollars and then need to place that money into financial institutions — or need to ‘clean’ it, for lack of a better word.”
Charges have also been laid against three companies: James and Associates, Eveline Holdings Inc., and Sterling Capital Inc. The RCMP alleges these companies are under the control of James and were used to launder the proceeds of crime, Matchett said.
In May 2010, James was charged with professional misconduct by the Law Society of Upper Canada. In a notice of application, the Law Society alleged that James knowingly assisted with “fraudulent or dishonest conduct” in connection with some mortgage transactions in which he represented the lenders, vendor and purchaser.
The proceedings do not appear to have concluded, and James is still listed as a licensed lawyer on the Law Society’s website.
James has also been involved with a number of civil cases involving real estate deals. In 1990, he was sued, along with several other defendants, by the Church of Jesus Christ of Latter-Day Saints. The church alleged that James and the other defendants defrauded them in connection with four land purchases.
James has also been sued in connection with legal services he provided between 1996 and 1999 on six condo units in Orillia. Two condo owners sued after the condo mortgages defaulted in 2001, alleging James had a conflict of interest and was in breach of contract and fiduciary duty.
In 2006, James filed for bankruptcy in Ontario. He declared in his bankruptcy filing that he had $4,505,000 in liabilities and $1,418,500 in assets.
James and Cremer were both expected to appear in a Newmarket court on Friday afternoon.
Forex: USD/CHF heading back to 0.9700 - FXStreet.com
INM investors oust chairman and finance chief - The Guardian
Disgruntled investors have ousted Independent News & Media's chairman and finance chief and rejected the directors' pay report at the Irish publisher's annual general meeting, in the latest outbreak of what has been dubbed the "shareholder spring".
Telecoms billionaire Denis O'Brien, who is INM's largest shareholder with a 29.9% stake, led the rebellion at the company's AGM in Dublin on Friday.
In April, O'Brien engineered the ousting of chief executive Gavin O'Reilly, whose family control about 13% of INM, and on Friday scathingly criticised the publisher's management through a proxy at the AGM.
Shareholders voted against the reappointment of chairman James Osborne, who was appointed by O'Reilly in October. A total of 78% of the votes cast did not support the re-election of Osborne, as shareholders either voted against him or withheld their vote.
A total of 58% of the votes cast did not support the re-election of chief financial officer Donal Buggy, as shareholders voted against him or withhold their vote.
Investors also voted to reject the directors' remuneration report. Although director pay cannot be altered by vote, the result is considered to be indicative of a protest by investors angered by the performance of the company and a lack of faith in management.
A total of 56% of votes cast did not support the report on directors' remuneration.
INM, which reported a pre-tax loss of €63.6m last year, has seen its share price crash from a peak of €27 in 2007 to just €0.25 on Friday. The company publishes titles including the Irish Independent, Belfast Telegraph and newspapers in South Africa, Australia and New Zealand.
The board of INM had recommended to shareholders to re-elect all directors except Paul Connolly, an outspoken critic of the company who has launched a legal action.
However, in a move that one source close to INM described as "almost unprecedented", INM's board was given another bloody nose by angry investors, with 78% voting to re-elect Connolly.
Connolly, a representative of O'Brien, has railed against the process that resulted in a €1.9m payment awarded to O'Reilly when he was ousted as chief executive in April.
He has taken legal action against INM in Ireland's commercial court arguing that the payment to O'Reilly should have been put to a shareholder vote.
Fellow billionaire shareholder Dermot Desmond, who raised his stake in INM to 6.36% on Wednesday, voted against the re-election of all INM's directors except Connolly.
O'Brien's proxy at the AGM said earlier on Friday that he has "total confidence" in new chief executive Vincent Crowley.
Crowley told shareholders on Friday that cost-cutting measures will include shutting INM's London office, moving out of its Dublin headquarters, and that the company needed to get to grips with its €148m pension fund deficit.
INM had net debt of €426m at the end of 2011.
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Enterprise Finance beefs up its commercial mortgages division - myintroducer.com
Rajvi Lodhia, formerly of Santander Commercial, takes up the role of Head of Commercial Mortgages, while Julian Abbiss and Sam Rose join as Underwriter and Administrator respectively. Julian was previously at GE for 15 years and Sam has re-joined the company that she left in 2008.
Danny Waters, CEO, Enterprise Finance, commented:
"We believe the commercial property sector has huge potential and, with these impressive new additions to the Enterprise team, are positioning ourselves to benefit from the upcycle. There is a strong demand for commercial mortgages and now that lenders such as Aldermore and Shawbrook have arrived on the scene, this is bringing the sector to life.
"With their considerable experience and skills, Rajvi, Julian and Sam will ensure that Enterprise Finance offers a cutting-edge commercial loans proposition to complement our market-leading Bridging Finance and Secured Loan divisions."
Rajvi Lodhia, Head of Commercial Mortgages, Enterprise Finance, added:
"I'm thrilled to have joined Enterprise Finance at such an exciting time in its development. We have some well-defined goals for the commercial mortgages division and, with Julian and Sam's crucial input, are already on track to realising them. There is considerable demand from brokers and their clients for commercial loans and we are here to ensure it is met."
MONEY MARKETS-Spanish downgrade piles pressure on banks - Reuters
* Downgrade likely to hike repo costs for Spanish banks
* Spanish banks seen increasingly reliant on ECB cash
By Emelia Sithole-Matarise
LONDON, June 8 (Reuters) - Fitch's credit rating downgrade of Spain compounds funding problems for the country's struggling banks which may leave them even more reliant on the European Central Bank's cheap loans.
Fitch slashed Spain's credit rating late on Thursday, leaving it just two notches short of junk status. It signalled more downgrades could follow as expectations grew Madrid would ask the euro zone for help with recapitalising its stricken banks.
Cuts to individual Spanish banks' ratings are due to follow, which could complicate their use of repurchase markets which have been an important source of short-term cash.
Many of the big Spanish banks use clearing houses to reduce the risk and cost of repo trades using government bonds but the ratings downgrade will boost the cost, or the initial margin clearers require to offset risks.
"This means that for a number of banks...(that) clear through LCH.Clearnet the financing will become much more expensive through repo and it's possible that some banks will not be allowed to clear if they fall below BB+," said Don Smith, an economist at ICAP.
"LCH uses the most conservative of the ratings so this will have an impact of raising, if not immediately but after a short period, the cost of repo financing to banks which increases their reliance for short term funds from the ECB," he said.
Already earlier this week, banks' use of the ECB's weekly funding more than doubled as Spain's troubles left its institutions increasingly dependent on central bank support and as four Greek banks returned to mainstream ECB operations following a two week ban.
The ECB's weekly offering of limit-free 7-day funding saw a total of 96 banks take 119.4 billion euros, the highest since the second of its two 3-year injections at the end of February and more than double the 51.2 billion euros taken a week ago.
BANK RESCUE DETAILS EYED
Spanish banks have increasingly seen their access to funding markets shrink as they slid deeper into a crisis caused by a burst real estate bubble and the country's deteriorating fiscal situation.
"Effectively they were already locked out of the market...so it's not of huge concern as they were prevalent in tapping the ECB's liquidity operations," said Suki Mann, a credit strategist at Societe Generale.
"The latest downgrade doesn't help and it will mean they will need accommodative policy from elsewhere either from the ECB or some form of aid from the troika for the recapitalisation.".
The cost of insuring against a default by the country's banks jumped after Fitch's downgrade of the country's rating, with five-year credit default costs for Banco Santander rising by eight basis points to 412.5 bps while those for BBVA were up five bps at 447.5 bps, according to provider Markit.
Both Smith and Mann said they would wait to see the details of any planned Spanish bank rescue to see how far it would go in tackling the sector's problems.
FOREX-Euro falls vs dollar as Spain concerns mount - Reuters India
* Euro retreats after Spanish rating downgrade
* Lacklustre Italian, German economic data adds to gloom
* Lack of policy action from Fed hits riskier currencies
By Nia Williams
LONDON, June 8 (Reuters) - The euro fell against the dollar and yen on Friday after a Spanish credit rating downgrade added to investor reluctance to take on risk and ratcheted up concern the European debt crisis was intensifying.
European Union and German sources told Reuters Spain was expected to make a request over the weekend for an aid package to prop up its troubled banks, highlighting the vulnerability of the country's financial sector.
Perceived riskier currencies were also under pressure after U.S. Federal Reserve Chairman Ben Bernanke offered no hints of imminent monetary stimulus in his testimony to Congress on Thursday, wrongfooting some market players who had positioned for a dovish statement.
The euro fell 0.75 percent to $1.2461, retreating from a two-week high of $1.2625 hit on Thursday after a surprise interest rate cut by the Chinese central bank.
Technical charts showed the euro was vulnerable to a test of the 23-month low of $1.2288 hit on June 1, after failing to break support-turned-resistance at $1.2626, the January low.
"With the negative news on Spain's rating cut it's back to reality for the market. The recovery we saw in the last few days was not a sustainable one," said Lutz Karpowitz, currency strategist at Commerzbank, who forecast the euro would be around $1.20 by the end of June.
Rating agency Fitch slashed Spain's credit rating by three notches on Thursday, signalling further downgrades could come as the country tries to restructure its troubled banking system.
The euro also took a knock after Italian industrial production fell far more than expected in April and German imports tumbled at their fastest rate in two years in April, adding to concerns of the euro zone slipping into recession.
FED HOLDS FIRE
Riskier currencies pared gains against the dollar made earlier in the week when investors sold safe-haven currencies on speculation central banks could signal further monetary easing to support growth.
Bernanke told Congress the Fed was closely monitoring "significant risks" to the U.S. recovery from Europe's debt crisis, disappointing those looking for him to lay out the groundwork for a third round of large-scale Fed bond buying.
The dollar index rose 0.9 percent to 82.771, recovering from a 10-day low of 81.911 hit on Thursday. The Australian dollar slipped 0.7 percent against the U.S. currency to US$0.9828.
Traders also cited talk that Chinese economic data due at the weekend could be weak and that Beijing's easing might have been aimed at pre-empting the grim news.
"Some people had high expectations of Bernanke, which he didn't match. The shock would have been much larger if it had not been for the Chinese rate cut," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
The euro fell 1.2 percent against the yen to 98.80 yen. The safe-haven Japanese currency gained broadly as market sentiment soured, with the dollar falling 0.5 percent to 79.22 yen.
Many analysts said the euro could come under further pressure next week as attention refocuses on political turmoil in Greece before an election on June 17. A victory for anti-bailout parties would raise the possibility of Greece leaving the currency union.
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