Proceedings

 

IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED
AND
IN THE MATTER OF
ROBERT THOMISLAV ADZIJA, LARRY ALLEN AYRES, DAVID ARTHUR BENDING,MARLENE BERRY, DOUGLAS CROSS, ALLAN JOSEPH DORSEY, ALLANEIZENGA, GUY FANGEAT, RICHARD JULES FANGEAT, MICHAEL HERSEY,GEORGE EDWARD HOLMES, TODD MICHAEL JOHNSTON, MICHAEL THOMASPETER KENNELLY, JOHN DOUGLAS KIRBY, ERNEST KISS, ARTHUR KRICK,FRANK ALAN LATAM, BRIAN LAWRENCE, LUKE JOHN MCGEE, RONMASSCHAELE, JOHN NEWMAN, RANDALL NOVAK, NORMAND RIOPELLE,ROBERT LOUIS RIZZUTO, AND MICHAEL VAUGHAN
REASONS FOR DECISION
(9 October 1998)

At the conclusion of the hearing this morning, we made an Order extending thetemporary cease trade order in this matter dated 24 September 1998 until 5 February 1999and adjourning the hearing to that date. We indicated at that time we would deliver briefreasons for the action taken so that there will be no misunderstanding as to the effect ofthe Order we have made.

Seven of the respondents are registered with the Commission to sell mutual fundsecurities and limited market products. Four of the respondents are registered with theCommission to sell mutual fund securities only. The remaining fourteen respondents arenot registered with the Commission to trade in securities. The basis for the original Orderof 24 September 1998 was and for the Order we made is that, all of the respondents soldto Ontario investors securities of certain corporations there identified as the OfferingCorporations and thereby traded in securities, which trades were distributions, with noprospectus filed with the Commission and no exemption from the prospectus requirementsof Ontario securities law available.

Because the investigation of this matter is not complete and there is no evidenceat this time that there is potential harm to the public in permitting those respondents whoare registered with the Commission to continue trading on their mutual fund registrationsand in their personal accounts, the order we made prohibits trading in securities by theserespondents except for trades in mutual fund securities and trades for their personalaccounts. Thus the effect of the Order is that the registrations for trading in limited marketproducts for those so registered are suspended until 5 February 1999 or until further order.

For those respondents who are not registered with the Commission to trade insecurities, the Order provides that the exemptions contained in subsections 35(1)(21) and35(2)(10) of the Act (colloquially known as the seed capital exemption and the sale ofshares in a private company which are not offered for sale to the public) do not apply tothose individuals until 5 February 1999 or until further order.

October 9th, 1998.

"J. F. Howard"       "R. Stephen Paddon"