IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5 AS AMENDED
- AND -
IN THE MATTER OF
BUCKINGHAM SECURITIES CORPORATION
TEMPORARY ORDERS (SUBSECTION 127 (1))
IT APPEARS to the Ontario Securities Commission (the "Commission") that:
- Buckingham Securities Corporation ("Buckingham") is registered under Ontario securities law as a securities dealer.
- Lloyd Bruce ("Bruce") is registered under Ontario Securities law and is the President and compliance officer of Buckingham. David Bromberg ("Bromberg") is registered under Ontario securities law as a salesperson and is a director of Buckingham. Harold Seidel is not registered in any capacity under Ontario securities law, but appears to be as one of the principals of Buckingham.
- Buckingham has approximately 14 registered salespersons and approximately 2,400 client accounts.
- Buckingham has a capital deficiency of at least $1 million as at May 31, 2001 contrary to the requirements set out in section 107 of the Regulation to Act that Buckingham maintain adequate capital at all times.
- Buckingham has failed to deliver to the Commission within ninety days after the end of its financial year a report prepared in accordance with Form 9 contrary to the requirement contained in section 142 of the Regulation to the Act.
- Buckingham has failed to segregate securities held for its clients as required under section 117 of the Regulation to the Act. Further, securities owned by clients of Buckingham are held in an account or accounts in the name of Buckingham with the following brokers: Rampart Securities Inc., W.D. Latimer Co. Limited, Canaccord Capital Corporation, BMO Nesbitt Burns Inc., Bear, Stearns & Co. Inc., Dundee Securities Corporation and B2B Trust (collectively, referred to as the "Brokers"). Buckingham has liabilities in relation to some of the accounts and it appears that securities owned by clients are being used as security for such liabilities, contrary to the requirements set out in Ontario Securities law, and in particular, subsection 2.1(1) and (2) of Rule 31.505 that Buckingham deal fairly, honestly and in good faith with its clients.
- Buckingham has breached the terms and conditions of its registration contrary to section 25 of the Act. In particular, as a term and condition of Buckingham's registration, Buckingham was required to increase its capital by depositing and subordinating 100,000 shares of Media Communications Group ("Media") on June 27, 2001. In relation to this term of registration, Staff required that the shares being subordinated were not over the counter or bulletin board stock. Seidel, on behalf of Buckingham, represented to Staff that the Media shares were traded on Nasdaq. Buckingham provided to Staff a subordination agreement subordinating the 100,000 shares of Media. However, contrary to Seidel"s representation, the Media shares are in fact bulletin board stock.
- Having regard to the foregoing, Buckingham has acted contrary to the public interest and in breach of Ontario securities law as described above. Bruce, Bromberg and Seidel have authorized, permitted or acquiesced in the conduct of Buckingham described above and/or acted contrary to the public interest.
Pursuant to subsection 127(5) of the Act, the Commission is of the opinion that the length of time required for a hearing could be prejudicial to the public interest;
AND WHEREAS by Commission Order made March 9, 2001, pursuant to section 3.5(3) of the Act, any one of David A. Brown, Howard Wetston or Paul Moore, acting alone, is authorized to make orders under section 127 of the Act;
IT IS THEREFORE ORDERED that pursuant to clause 2 of subsection 127 of the Act that trading in any securities by Buckingham, Bruce, Bromberg and Seidel cease;
IT IS FURTHER ORDERED that pursuant to clause 1 of subsection 127(1) of the Act that the registration of Buckingham be suspended;
IT IS FURTHER ORDERED that pursuant to clause 2 of subsection 127(1) of the Act that trading in securities by Rampart Securities Inc., W.D. Latimer Co. Limited, Canaccord Capital Corporation, BMO Nesbitt Burns Inc., Bear, Stearns & Co. Inc., Dundee Securities Corporation, Caldwell Securities Limited and B2B Trust (collectively, referred to as the "Brokers") cease, on the term that trading cease by the Brokers only in respect of securities held in an account or accounts in the name of Buckingham with each of the Brokers;
IT IS FURTHER ORDERED that pursuant to clause 6 of subsection 127(1) of the Act that the aforesaid order shall take effect immediately and shall expire on the fifteenth day after its making unless extended by the Commission.
DATED at Toronto this 6th day of July, 2001.