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, ALLAN EIZENGA, GUY FANGEAT,
RICHARD JULES FANGEAT, MICHAEL HERSEY,
GEORGE EDWARD HOLMES, TODD MICHAEL JOHNSTON,
MICHAEL THOMAS PETER KENNELLY, JOHN DOUGLAS KIRBY,
ERNEST KISS, ARTHUR KRICK, FRANK ALAN LATAM, BRIAN LAWRENCE,
LUKE JOHN MCGEE, RON MASSCHAELE, JOHN NEWMAN,
RANDALL NOVAK, NORMAND RIOPELLE, ROBERT LOUIS RIZZUTO,
AND MICHAEL VAUGHAN

STATEMENT OF ALLEGATIONS OF STAFF
OF THE ENFORCEMENT BRANCH OF THE
ONTARIO SECURITIES COMMISSION

 

Staff of the Ontario Securities Commission ("Staff") make the followingallegations:

PARTIES

1. Robert Thomislav Adzija ("Adzija") is an individual who resides in St. Thomas,Ontario. Adzija is registered with the Ontario Securities Commission (the"Commission") to sell mutual fund securities and limited market products.

2. Larry Allen Ayres ("Ayres") is an individual who resides in Walsingham, Ontario.Ayres is not registered with the Commission to trade in securities.

3. David Arthur Bending ("Bending") is an individual who resides in Sarnia, Ontario.Bending is registered with the Commission to sell mutual fund securities.

4. Marlene Berry ("Berry") is an individual who resides in Belmont, Ontario. Berryis not registered with the Commission to trade in securities.

 

5. Douglas Cross ("Cross") is an individual who resides in St. Thomas, Ontario.Cross is not registered with the Commission to trade in securities.

6. Allan Joseph Dorsey ("Dorsey") is an individual who resides in Brantford,Ontario. Dorsey is registered with the Commission to sell mutual fund securities.

7. Allan Eizenga ("Eizenga") is an individual who resides in Milton, Ontario.Eizenga is not registered with the Commission to trade in securities.

8. Guy Fangeat ("G. Fangeat") is an individual who resides in British Columbia. G.Fangeat is not registered with the Commission to trade in securities.

9. Richard Jules Fangeat ("Fangeat") is an individual who resides in Sparta,Ontario. Fangeat is registered with the Commission to sell mutual fundsecurities and limited market products.

10. Michael Hersey ("Hersey") is an individual who resides in London, Ontario.Hersey is not registered with the Commission to trade in securities.

11. George Edward Holmes ("Holmes") is an individual who resides in Waterloo,Ontario. Holmes is registered with the Commission to sell mutual fund securitiesand limited market products.

12. Todd Michael Johnston ("Johnston") is an individual who resides in London,Ontario. Johnston is registered with the Commission to sell mutual fundsecurities and limited market products.

13. Michael Thomas Peter Kennelly ("Kennelly") is an individual who resides inHamilton, Ontario. Kennelly is registered with the Commission to sell mutualfund securities.

14. John Douglas Kirby ("Kirby") is an individual who resides in London, Ontario.Kirby is registered with the Commission to sell mutual fund securities and limitedmarket products.

15. Ernest Kiss ("Kiss") is an individual who resides in Burlington, Ontario. Kiss isnot registered with the Commission to trade in securities.

16. Arthur Krick ("Krick") is an individual who resides in Petrolia, Ontario. Krick isnot registered with the Commission to trade in securities.

17. Frank Alan Latam ("Latam") is an individual who resides in Eden, Ontario.Latam is registered with the Commission to sell mutual fund securities andlimited market products.

18. Brian Lawrence ("Lawrence") is an individual who resides in St. Thomas,Ontario. Lawrence is not registered with the Commission to trade in securities.

19. Luke John McGee ("McGee") is an individual who resides in London, Ontario.McGee is not registered with the Commission to trade in securities.

20. Ron Masschaele ("Masschaele") is an individual who resides in Tillsonburg,Ontario. Masschaele is not registered with the Commission to trade insecurities.

21. John Newman ("Newman") is an individual who resides in Lachine, Quebec.Newman is not registered with the Commission to trade in securities.

22. Randall Novak ("Novak") is an individual who resides in Brantford, Ontario.Novak is registered with the Commission to sell mutual fund securities.

 

23. Normand Riopelle ("Riopelle") is an individual who resides in Mount Brydges,Ontario. Riopelle is not registered with the Commission to trade in securities.

 

24. Robert Louis Rizzuto ("Rizzuto") is an individual who resides in Oakville,Ontario. Rizzuto is registered with the Commission to sell mutual fund securitiesand limited market products.

25. Michael Vaughan ("Vaughan") is an individual who resides in St. Thomas,Ontario. Vaughan is not registered with the Commission to trade in securities.

SALE OF SECURITIES

26. Between January 16, 1995 and September 23, 1998, all of the respondents soldto Ontario investors securities of one or more of the following Corporations (the"Offering Corporations"):

The Saxton Trading Corp.
The Saxton Export Corp.
The Saxton Export (II)Corp.
The Saxton Export (III)Corp.
The Saxton Export (IV)Corp.
The Saxton Export (V)Corp.
The Saxton Export (VI)Corp.
The Saxton Export (VII)Corp.
The Saxton Export (VIII)Corp.
The Saxton Export (IX)Corp.
The Saxton Export (X)Corp.
The Saxton Export (XI)Corp.
The Saxton Export (XII)Corp.
The Saxton Export (XIII)Corp.
The Saxton Export (XIV)Corp.
The Saxton Export (XV)Corp.
The Saxton Export (XVI)Corp.
The Saxton Export (XVII)Corp.
The Saxton Export (XVIII)Corp.
The Saxton Export (XIX)Corp.
The Saxton Export (XX)Corp.
The Saxton Export (XXI)Corp.
The Saxton Export (XXII)Corp.
The Saxton Export (XXIII)Corp.
The Saxton Export (XXIV)Corp.
The Saxton Export (XXV)Corp.
The Saxton Export (XXVI)Corp.
The Saxton Export (XXVII)Corp.
The Saxton Export (XXVIII)Corp.
The Saxton Export (XXIX)Corp.
The Saxton Export (XXX)Corp.
The Saxton Export (XXXI)Corp.
The Saxton Export (XXXII)Corp.
The Saxton Export (XXXIII)Corp.
The Saxton Export (XXXIV)Corp.
The Saxton Export (XXXV)Corp.
The Saxton Export (XXXVI)Corp.
The Saxton Export (XXXVII)Corp.
The Saxton Export (XXXVIII)Corp.

27. All of the Offering Corporations were incorporated pursuant to the laws ofOntario. The sales of shares of the Offering Corporations constituted trades insecurities of an issuer that had not been previously issued.

28. None of the Offering Corporations has filed a prospectus with the Commission.No Offering Corporation has been issued a receipt for a prospectus by theCommission.

29. None of the exemptions from the prospectus requirements in Ontario securitieslaw was available for the distributions of shares of the Offering Corporations.

30. None of the exemptions from the registration requirements in Ontario securitieslaw was available for the sale of shares of the Offering Corporations.

CONDUCT CONTRARY TO THE PUBLIC INTEREST

31. In respect of the respondents Ayres, Berry, Cross, Eizenga, G. Fangeat, Hersey,Kiss, Krick, Lawrence, McGee, Masschaele, Newman, Riopelle, and Vaughan,these individuals acted contrary to the public interest by trading in securitieswithout being registered with the Commission and with no available exemptionfrom the registration requirements of Ontario securities law.

32. The respondents listed in paragraph 31 above also acted contrary to the publicinterest by trading in securities which constituted a distribution without aprospectus being filed or receipted by the Commission and with no availableexemption from the prospectus requirements of Ontario securities law.

33. In respect of the respondents Bending, Dorsey, Kennelly, and Novak, theseindividuals acted contrary to the public interest by trading in securities outside oftheir category of registration and with no available exemption from theregistration requirements of Ontario securities law.

34. The respondents listed in paragraph 33 above also acted contrary to the publicinterest by trading in securities, which trades were distributions, without aprospectus being filed or receipted by the Commission and with no availableexemption from the prospectus requirements of Ontario securities law.

35. In respect of the respondents Adzija, Fangeat, Holmes, Johnston, Kirby, Latam,and Rizzuto, these respondents traded in securities, which trades weredistributions, without a prospectus being filed or receipted by the Commissionand with no available exemption from the prospectus requirements of Ontariosecurities law.

36. In addition, the respondents listed in paragraph 35 above failed to adequatelyassess the suitability of an investment in the Offering Corporations for theirclients.

37. Such other allegations as Staff may make and the Commission may permit.

DATED at Toronto this 24th day of September, 1998.