R.S.O. 1990, c. S. 5, AS AMENDED



July 20, 2000

John A. Geller, Q.C. - Vice-Chair
Howard I. Wetston, Q.C. - Vice-Chair
Robert W. Davis, F.C.A. - Commissioner


For the Staff of the Ontario Securities Commission
Hugh Corbett

For R.T. Capital Management Inc.
Paul Steep
Rene Sorell
Jeremy Devereux

For K. Michael Edwards
Paul Steep
Rene Sorell
Jeremy Devereux

For Timothy K. Griffin
Jeffrey Leon

For Donald E. Webster
Nancy J. Spies

For Jennifer I. Lederman
Benjamin Zarnett

For Peter A. Rodrigues
Sandra Forbes

For Peter B. Larkin
Linda Fuerst

For Gary N. Baker
James C. Tory

For Patrick Shea
Nigel Campbell
Robert Brush

For Marion Gillespie
Joel Wiesenfeld


We have carefully considered the Settlement Agreement dated July 18, 2000 in thismatter, and have concluded that it is in the public interest for us to make the orderrequested approving it. In doing so, we accept that this is a comprehensive settlementreflecting various roles of the Respondents in connection with RT's high closing activities.

The Settlement Agreement and sanctions are in keeping with the purposes of the Act andthe principles through which those purposes are to be achieved, as set out in sections 1.1and 2.1 of the Act. The sanctions provide both specific and general deterrence; redressto any RT clients who may have been adversely affected by the high-closing activity; andsome assurance that this type of conduct cannot recur at RT.

It may be that the additional fees collected by RT Capital Management Inc. ("RT") were notlarge when measured against its total revenues, but to focus on this would be to entirelymisunderstand the serious nature of RT's actions, and those of the individualRespondents.

Some financial harm resulted from those actions to investors who overpaid for securitiesas a result of the high closings and to clients of RT who overpaid fees as a result of them.Whether or not the overpayments are now refunded, such harm would itself justify theimposition of sanctions under subsection 127(1) of the Securities Act.

Even greater harm has been caused to the capital markets by the actions of theRespondents. Investors and clients of a registrant have the right to be fairly dealt with bythe registrant to whom they have entrusted their investments. Clients who entrust theirinvestment funds to an advisor have the right to assume that purchases and sales will bemade for their accounts only for their benefit, and not for the benefit of the advisor. Theyhave the right to assume that the fees which they pay the advisor will not be inflated as aresult of improper actions of the advisor. Pension funds and other investors, in decidingwhich advisor to retain, have the right to assume that "rankings" will not be falsified bysuch actions. In short, they all have the right to assume that registrants will act ethically.

Actions of the sort alleged by Staff of the Commission, and admitted by the Respondents,by a significant market participant such as RT raise questions as to whether a corporateculture exists which encourages or permits such actions to occur. At the very least, thereappears to have been inadequate corporate governance and procedures at RT, resultingin little or no attempt by its directors and senior officers to ensure that there was anadequate compliance system in place, and enforced, to protect against such actions. Ineither case, the credibility of the capital markets must be adversely impacted.

It is necessary for us to make it clear that such actions will not be countenanced or takenlightly. We expect compliance plans to be in place at dealers and advisors, includingportfolio managers, which make actions of this sort difficult if not impossible to carry outwithout immediate detection. We expect that the directors and senior officers of dealersand advisors will ensure that such plans are in place, and that they are enforced. Weexpect dealers and advisors to ensure that their corporate cultures do not encourage suchactions, and that their employees who engage in them, no matter how senior or importantto the business, will be appropriately dealt with. Anything less is not acceptable for adealer and advisor.

The sanctions imposed on for the officers and directors of RT will also send a messageto senior management of companies involved in the capital markets that a strong cultureof compliance must be fostered at the highest levels of an organization and diligentlyenforced throughout. The investing public, and clients in particular, are entitled to dependon these officers and directors to establish and enforce practices to protect their interests.Those officers and directors who fail to do so will be held personally accountable. In thiscase, all of the respondents who were officers and directors of RT will be removed fromtheir positions of trust and authority for an appropriate period of time.

RT will pay the sum of $3 million to the Commission and these funds will be used for thebenefit of investors in Ontario. As a registrant, the highest standards of compliance areexpected of RT. RT must accept responsibility for its conduct and it has done so in thiscase. This financial sanction sends a message to RT and to the investment industry thatthe cost of non-compliance exceeds the cost of compliance. In addition, the costs of theinvestigation and hearing, in the sum of approximately $150,000 will be paid by theRespondents, so that they will not have to be borne by other market participants.

We have considered the Settlement Agreement against this background, and haveconcluded that the sanctions imposed are adequate to signal the Commission's view of theseriousness of the breaches by the Respondents, and to protect investors and themarketplace against similar further actions by them. In reaching this conclusion, we havealso taken into account Commission decisions which make it clear that general deterrencemay properly be taken into account in assessing what sanctions are appropriate todiscourage similar conduct by others.

July 20, 2000.

"J. A. Geller"

"Howard I. Wetston"

"Robert W. Davis"