Proceedings

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IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, c. S.5, as amended

- and -

IN THE MATTER OF THE FARINI COMPANIES INC.,
and DARRYL HARRIS


STATEMENT OF ALLEGATIONS
OF STAFF OF THE ONTARIO SECURITIES COMMISSION


Staff of the Ontario Securities Commission make the following allegations:

The Respondents

1.      The Farini Companies Inc. ("Farini") is an Ontario corporation which manufactured and distributed pasta makers and food products.

2.      Farini is a reporting issuer in Ontario whose shares traded on the Canadian Dealers Network until October, 2000.

3.      Darryl Harris has been a Director of Farini since October 8, 1999. Harris has never been registered with the Commission in any capacity pursuant to Ontario securities law.

Failure to Meet Financial Statement Filing Requirements

4.      During the period between May, 1996 and May, 2002, Farini repeatedly failed to file both interim and audited annual financial statements with the Commission within the time periods prescribed by sections 77 and 78 of the Securities Act.

5.      In particular, Farini failed on 11 occasions to file its interim financial statements within the time period prescribed by section 77 of the Securities Act.

6.      Specifically, Farini failed to file:

 

  • its first quarter interim financial statements for the 1998, 1999, 2000, 2001 and 2002 fiscal years;
  • its second quarter interim financial statements for the 1998, 2000, 2001 and 2002 fiscal years; and
  • its third quarter interim financial statements for the 1998, 1999 and 2000 and 2002 fiscal years

      within the required time period.

      7.      In addition, Farini failed on 8 occasions to file its annual comparative financial statements within the time period prescribed by section 78 of the Securities Act.

      8.      Specifically, Farini failed to file its annual comparative financial statements for the 1995, 1996, 1997, 1998, 1999, 2000, 2001, and 2002 fiscal years within the required time period.

      9.      As a result of Farini's failure to file its financial statements in a timely manner, the Commission has imposed four cease trade orders on its shares. The Commission's orders to this effect are dated May 28, 1999, July 26, 2000, May 25, 2001 and May 24, 2002.

      10.      To date, Farini's latest failure to file has not been rectified, and the Commission's cease trade order dated May 24, 2002 remains in effect.

      11.      Harris was a Director of Farini at the time of the following breaches, namely:

       

      • 8 failures to file interim financial statements within the time periods prescribed by section 77 of the Securities Act; and
      • 4 failures to file annual comparative financial statements within the time periods prescribed by section 78 of the Securities Act.

          12.      Specifically, Harris was a Director at the time of Farini's failure to file:

           

          • its first quarter interim financial statements for the 2000, 2001, and 2002 fiscal years;
          • its second quarter interim financial statements for the 2000, 2001 and 2002 fiscal years;
          • its third quarter interim financial statements for the 1999, 2000 and 2002 fiscal years; and
          • its annual comparative financial statements for the 1999, 2000, 2001 and 2002 fiscal years

              within the required time period.

               

              Conduct Contrary to the Public Interest

              13.      The conduct of Farini in failing to meet the financial statement filing requirements as described above contravened Ontario securities law and is contrary to the public interest.

              14.      Harris authorized, permitted or acquiesced in Farini's failure to meet the financial statement filing requirements and thereby contravened Ontario securities law and acted in a manner contrary to the public interest.

              15.      Staff reserves the right to make such further and other allegations as Staff may submit and the Commission may permit.



               

              Dated at Toronto, this 22nd day of April, 2003