Kenneth Rijock

Kenneth Rijock

Saturday, October 22, 2016


Franco: gone but not forgotten

If you read this week's article on why Country Risk should be increased upon Spain, due to its Gulag-style treatment of Vladimir Kokorev, and his family, the recent Spanish pronouncement on the British Overseas Territory of Gibraltar reinforces this position. Is Spain, a democratic country, never going to cease to seek to acquire Gibraltar, notwithstanding that it, in a mutual exchange of territorial claims, gave it up, in perpetuity, over 300 years ago ? The UK gave up its claims, in exchange for the Rock, but apparently someone in Madrid was not paying attention in history class.

Furthermore, Spain has failed to free its African enclaves in Morocco, claiming that Spaniards living there should be under Spanish rule; Gib residents have always voted to remain British. What's the difference between the two ? Nothing.

Here's the latest news: the acting Spanish Foreign Minister has threatened to close the common frontier with Gibraltar, and an external "hard border," after Brexit is completed. That means that the approximately 20,000 Spanish citizens who work on the Rock will lose their jobs. I gather nationalistic, even, dare we say, Francoist, politics now trump (no pun intended) sound economic policies. Has the Government of Spain forgotten its runaway unemployment ?

Apparently, Spain is now offering to share sovereignty with the UK, as a solution, but curiously, is not saying whether that is the intermediate step to complete Spanish sovereignty in an uncertain future. When a nation, even those within the EU, engages in threatening conduct, we wonder what else its government will dream up, and adjust its level of Country Risk, accordingly, upwards.  

Friday, October 21, 2016


Lawyers are required, under most codes of professional ethics, to zealously represent their clients, but sometimes they forget that they are, themselves, officers of the court, and engage in dilatory tactics, seeking to delay legal proceedings, especially when they know the evidence is against them, and their clients will ultimately face a harsh justice. Many members of the judiciary consider these tactics to be bad faith conduct, which can result in serious penalties, both for the client, and more often, for the lawyers as well.

Regular readers of this blog know that we are following the events of the Cayman Gang of Four scandal, which involves the theft of hundreds of millions of dollars, owned by Canadian pensioners and retirees. A civil suit is presently pending, in Grand Court of the Cayman Islands, against Dundee Merchant Bank, the custodian of the funds, and one of its former officers, Sharon Lexa Lamb. Counsel for the plaintiff is seeking evidence, to be used in that case, to prove up liability, and damages.

A suit, brought several months ago, by the plaintiff, Lawrence Heath, against Leon Frazer & Associates, Inc., is solely seeking account documents of the plaintiff, a former investment client of the defendant wealth management firm, in its possession. The plaintiff was forced to file the suit, after the defendant, by and through its attorneys, failed to produce its client files, after months of delay; Here's why.

First, defendant's compliance officer stated, in writing, that there were several boxes of client files and documents, and that she would produce them, in the ordinary course of business. Then, suddenly, the compliance officer is replaced by another, who immediately claims that there are no such extensive records, and who only produces a small, obviously inadequate, set of documents, and takes an adversarial posture with the request.

Bad faith, in the course of litigation, occurs when multiple events, when taken together, demonstrate a deliberate intent to ignore the reasonable requests of opposing counsel, to move the cause forward, and a blatant disregard for the rules of civil procedure. These specific acts leave no doubt in my mind that the defendant, acting through his counsel, has engaged in a course of conduct designed to delay the proceedings indefinitely, with the ultimate aim that they take so long that the plaintiff, or major witnesses, pass away, or become too ill and infirm to testify at trial. Sources close to the plaintiff report that the stress of the delays in this case have had an effect upon his health, and they believe that they have shortened his life; he is 90 years old.

Any one of these acts, all of which have occurred in the case, is sufficient, in my book, to constitute dilatory practice; all of them together constitute bad faith:

(1) the defendant corporation has failed to timely file an answer or response, on the merits, to the Notice of Application. The plaintiff can now, at any time, seek an Order of Default against the defendant. What lawyer or law firm does that, if not to delay the proceedings ?

(2) Back in August, two attorneys representing the defendant advised that they were going on vacation for two weeks, and would address the issues upon their return, notwithstanding that a third attorney has been solely handling the defense. Does this sound like dilatory practice to you ?

(3) Also, back in August, defense counsel indicated that they were opposing the Application, and were going to file a motion. Counsel asked for, and received a half-day appointment, in November, to have the Master hear the motion. No motion, or any other pleading, other than a notice of hearing, has ever been filed with the Court, notwithstanding counsel's promise to file it. Two months later, with no motion, we must deduce that securing the hearing was a bad faith effort to delay the proceedings for months, as was the claim that it would take a half-day to settle a controversy that could be resolved by the Court in fifteen minutes. The Master request was merely a ploy.

(4) Last week, it was reported that the defendant, who has twice refused to allow its director, William Tynkaluk, to appear and give sworn testimony, was again objecting to Tynkaluk appearing, but would forward a proposal to opposing counsel, to schedule the testimony of a number of witnesses for both sides, and move the case forward. Defense counsel has not, despite repeated requests, ever delivered a proposal to settle discovery issues. They do not want their director to testify, though he was the personal investment adviser of the plaintiff at LF; they allege his advanced age precludes his appearance, but Tynkaluk was recently staying at a major Canadian resort, which frankly calls into question his infirmities.

Tynkaluk has repeatedly been summoned before the Ontario Securities Commission, to explain allegations made against him, involving insider trading of Leon Frazer stock, in advance of the sale of the company's stock, with nonpublic information. he actually repeatedly solicited the plaintiff, to trade on inside information, given to him by Tynkaluk, but the plaintiff, a retired attorney, declined. Is this what Leon Frazer counsel is afraid may come out during Tynkaluk's testimony ?

I would like the lawyers reading this story to decide whether concerning the conduct of the defense of this case, which is solely seeking documents, and not demanding damages, what you would do, if opposing counsel carried on what can only be interpreted as a deliberate campaign of bad faith practice, as you see here, and since attorneys are bound to follows the orders of their clients, one must ask whether Leon Frazer & Associates, Inc., or its parent, IA, have instructed these attorneys to pursue what must be regarded as an improper defense of a valid Application. I wonder what the opinion of the the Law Society of Upper Canada would be, given this set of facts ?



We are beginning to lose faith in the independence of the court system of Spain, which directly impacts Country Risk. For more than one year, the Russian businessman, Vladimir Kokorev, his wife and son, have been incarcerated in prisons, located in the Canary Islands. Though their imprisonment is allegedly as material witnesses to some as yet unfiled corruption case, involving officials of  Equatorial Guinea (EG).

In truth and in fact, their imprisonment is punitive, and the Kokorevs are being detained, due to money laundering charges, for transactions that took place between ten and fifteen years ago. Spain never charged them, and the Statute of Limitations has long ago expired. They are frankly, being held without trial, in a situation that is more reminiscent of the gulags of the Soviet Union, than that of a member of the European Union. His guilt or innocence is immaterial, because he can no longer be tried there.

Wealthy Spanish industrial interests, unhappy with American participation in EG's oil industry, as the petroleum deposits were not discovered until after Spain granted EG its independence, reportedly want that lucrative business for themselves, and want EG President Obiang out of office, so that they can install a more malleable successor, who will cooperate with them.

The Spanish Government, which lacedt the investigation far from prying eyes in Madrid, is defying the rule of law, to appease its greedy business sector. When you cannot trust the courts, Country Risk must be elevated, for foreign investors who have no access to the courts, to redress civil defaults, or other grievances, should stay out of Spain. If Vladimir Kokorev dies in prison, it will be to late to save him. The EU should act, while it is still possible to remedy this case. Meanwhile, Country Risk for Spain is to be elevated.  

Thursday, October 20, 2016


Auditors working on behalf of Venezuela's National Assembly have found that more than eleven billion dollars ($11,000,000,000) is missing, and unaccounted for, at PDVSA, the country's petroleum agency, and have pointed fingers squarely at the agency's former head, Rafael Ramirez*, the current Venezuelan ambassador to the United Nations. Ramirez has not responded to the charges.

PDVSA has been reportedly the object of massive corruption, including overpricing of purchases, and diverting the difference to corrupt Venezuelan PEPs, PDVSA managers, and oil industry officials. the agency has also been accused of laundering drug profits, being an illegal source of US dollars, and massive cases of corruption, The agency's profits, which are the property of the people of Venezuela, have disappeared, leaving it unable to service its bond issues, as they come due, and it may actually be insolvent, all due to systemic corruption. As oil revenues are the major source funding of the Venezuelan Government, Country Risk will most certainly increase in 2016.
* Ramirez is allegedly the first cousin of the imprisoned Venezuelan terrorist, known as Carlos, "the Jackal," presently serving a life sentence in a French prison; Carlos' real name is Illich Ramírez Sánchez. Rafael has denied that he is related to Carlos.


Roman Seleznev, the Russian computer hacker who hacked into servers, and stole credit card information, causing millions of dollars in losses, to banks and credit cards companies, will be sentenced on Feburary 17, 2017 in US District Court, in Seattle. Seleznev was convicted, in August, 2016, on 38 counts.

Losses from his criminal activity have been estimated at $168m; testimony at trial confirmed that he hacked over two million credit cards. The case has generated a large amount of public interest in Russia, as his father is a member of Russia's Duma, its Parliament, and the circumstances of his arrest and removal, from the Maldives, in the Indian Ocean, have been questioned by defense counsel, who have stated that the requirements of international law, and his client's rights, were violated. They have stated that his conviction will be appealed to the 9th Circuit Court of Appeals.

Seleznev also faces Federal criminal charges in two other District Courts. 

Wednesday, October 19, 2016


If you have been following our coverage of Lawrence Heath vs. Leon Frazer & Associates, Inc.,  a civil suit, filed against a securities firm, to obtain client records, for the Cayman Gang of Four litigation, you know that no less than twice, counsel for the corporation has declined to produce its most senior director, William "Bill" Tynkaluk, from appearing to give testimony.

Tynkaluk was the personal wealth adviser to the plaintiff, and he alone has first-hand knowledge of what happened to the plaintiff's investment account, which was in eight figures. He will also know about an estimated sixty other Leon Frazer clients, who accounts were drained, and transferred; the total amount that is missing is in the hundreds of millions, according to a government agency that has seen some of the filed complaints and claims.

The law firm representing Leon Frazer has stubbornly refused to produce Mr. Tynkaluk, and it is now claimed that he has abruptly retired, and relinquished his directorship, effective last Spring. How convenient for Leon Frazer, however, his sworn testimony is still being demanded. Sooner or later, the Court will order his appearance, but thus far, Tynkaluk is being hidden under the umbrella of one of Toronto's largest law firms, but is it to prevent him from incriminating both himself, and Leon Frazer ?

It is not an accident that one of the lawyers handling the case is an experienced criminal defense attorney, experienced in white-collar cases ; someone is going to need his services.


In what must be the worst attempt at restoring public confidence in a broken legal system that we have seen in many years, an unknown Panamanian government agency has proposed to hereafter make all anti-money laundering sanctions, imposed upon banks and insurance companies, public. Is this the first salvo from the country's newly-hired public relations experts ? If so, it will not convince Panama watchers one bit, regarding reform of the country's nonfunctional anti-money laundering structure.

The entity, the National Committee against Money Laundering and Financing of Terrorism, and the Proliferation of Weapons of Mass Destruction, which was formed last year, which announced the proposal, has an empty track record, and is regarded by Panamanians in the financial services business as a bad joke, has no record of enforcing Panama's universally ignored AML/CFT laws. In truth and in fact, no bank gets charged with money laundering in Panama City, so there's not much information to make public.

This little exercise in "transparency" is little more than a press release, and one which will not be taken seriously by the financial world; the Superintendent of Banking, and the Superintendent of Insurance and Reinsurance will kindly take note. After the Panama Papers, superficial steps simply will be laughed at, as future potential clients look elsewhere.