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



1. By Notice of hearing dated May 4, 1993, the Ontario Securities Commission (the "Commission") announced that it proposed to hold a hearing to consider:

a) whether pursuant to section 27 [now s. 127] of the Securities Act, R.S.O. 1990, c. S.5 as amended (the "Act"), in the opinion of the Commission, it is in thepublic interest to suspend, cancel, restrict or impose terms and conditions upon the registrations of, or to reprimand, Emmanuael Borromeo ("Borromeo");

b) whether pursuant to section 128 [now s. 127] of the Act, in the opinion of the Commission, it is in the public interest to order, subject to such terms andconditions as it may impose, that any or all of the exemptions contained in sections 35, 72, 73 and 93 of the Act do not apply to Borromeo.

2. Staff of the Enforcement Branch of the Commission ("Staff") and Borromeo agree to recommend the settlement of the proceedings against Borromeocommenced by Notice of Hearing dated May 4, 1993 in accordance with the facts, terms and conditions set out hereinafter.

3. Staff and Borromeo agree that only if, as and when the settlement is approved by the Commission, may this settlement agreement be released to the public.


4. From November 20, 1985 until May 14, 1991 Borromeo was registered with the Commission as a sales representative employed by McConnell & CompanyLimited ("MCL"). MCL was registered with the Commission as an investment dealer and broker until May 14, 1991, when its registration was suspended and itwas placed into receivership as a consequence of a capital deficiency.

5. Borromeo is currently employed as a registered representative with a registered dealer.

6. Borromeo began working at MCL in 1985 in the corporate finance area, preparing offering documents. Around 1989, Borromeo became a sales manager for aMCL branch. In January 1990, he became President of McConnell Services Limited. In this position, Borromeo prepared tax statements based on auditedfinancial statements of the investments. In consultation with the auditors he responded to client calls regarding the expected tax losses for the various investmentsoffered by MCL. He had a list of such investments, and would check with the various general partners regarding the estimated tax losses. He remained in thisposition until MCL was put into receivership on May 14, 1991. Borromeo subsequently remained at MCL for a period of time in order to assist the receiver.

Ravencrest Condominium Hotel Limited Partnership

7. A public offering of units in the Ravencrest Condominium Hotel Limited Partnership ("RCHLP") was made pursuant to a prospectus (the "prospectus") datedNovember 28, 1990. A final receipt for the prospectus was issued on November 29, 1990. The prospectus permitted the sale of up to a maximum of 13,875limited partnership units, each priced at $1,000.00, for a total of $13,875,000.00. Each investor in the public offering had to subscribe for at least 25 units for aminimum investment of $25,000.00. In order for the first closing of the public offering to occur, the prospectus required that a minimum of 5,151 units, for atotal of $5,151,000.00, had to be sold on or by December 27, 1990. If the first closing failed to occur as stipulated, then all subscription documents and moneycollected were to be returned immediately to the subscribers.

8. As described in the prospectus, RCHLP, was deemed to be a "connected issuer" to MCL because MCL indirectly owned all of the outstanding shares of thegeneral partner, Ravencrest Development G.P. Limited (the "General Partner"). MCL acted as the principal agent for the sale of units in the public offering.

9. In addition, as noted in the prospectus, the Project Manager, Ravencrest Development Co. Ltd. (the "Project Manager"), was a non-arms length party toRCHLP by reason of sharing common directors and shareholders with the General Partner. The prospectus also noted that the Rental Manager, RavencrestManagement Co. Ltd. (the "Rental Manager"), was a non-arms length party to RCHLP by reason of sharing common directors and shareholders with theGeneral Partner.

Participation of Borromeo in the Public Offering

10. Considerable difficulty was encountered by MCL in meeting the minimum requirements for the first closing. The first closing took place on December 28,1990. Of the 5449 units represented as sold on the first closing, 22.15% were purchased by four employees of MCL on an effectively risk free basis. Borromeowas one of these employees. On December 28, 1990 Borromeo, at the invitation of senior management of MCL, subscribed for 216 units in the limitedpartnership, priced at $216,000.00. The financing for this subscription involved a vendor take-back mortgage for $88,500.00 with the balance satisfied by apromissory note to McConnell Development Corporation (MDC), which was an affiliate of MCL. At the time of the first closing Borromeo had not signed thepromissory note. On December 31, 1990, two transfers were documented, which had the effect of reducing Borromeo's investment in the RCHLP from$216,000 to $102,000 with a corresponding reduction in the number of units.

11. Borromeo's investment for 102 units was financed by the vendor take-back mortgage which was already in place for $88,500.00 with the remaining$13,500.00 of the purchase price being provided by a loan from MDC. To this effect, Mr. Borromeo signed a promissory note to MDC for $13,500.00, which isdated December 31, 1990.

12. In conjunction with his participation in the public offering, on December 31, 1990, Borromeo entered into an agreement with MDC and the Project Manager.The agreement provided that MDC and the Project Manager would pay the interest and principal on the $88,500.00 loan advanced by Blueberry Estates. Inaddition, MDC and the Project Manager agreed to pay the interest and principal on the promissory note of $13,500.00 to MDC. In return, MDC and the ProjectManager became entitled to all the cash flow from the project that was attributable to the units purchased. The prospectus did not disclose or offer thesefinancing arrangements to other potential purchasers of units in the RCHLP and such arrangements were not made available to them.

13. It was Borromeo's understanding that his units were to be re-sold shortly into the new year. He was assured that the funding had been taken care of and thatit would not cost him anything. For agreeing to participate he could take advantage of the tax loss.

14. Borromeo did not make any payments on the loan from Blueberry Estates or the promissory note given to MDC.

15. Borromeo claimed a business income loss of $5035.26 on his 1990 tax return as a result of his participation in the RCHLP.

16. Borromeo did not sell any units of the RCHLP to clients. As standard procedure, in his position as client services manager, he wrote to the other investors inthe RCHLP confirming their subscription and attaching the appropriate tax forms.

Receivership of MCL

17. On May 14, 1991, a receiver and manager of MCL and MDC was appointed by Court Order on the application of the Toronto Stock Exchange. Thereceivership was the result of a regulatory capital deficiency on the part of MCL.

18. Pursuant to an agreement dated May 28, 1991, Borromeo assigned all of his rights, title, and interest in the 102 units of RCHLP to the Project Manager. Theassignment was accepted on May 31, 1991.

19. In conjunction with this assignment, the Project Manager indemnified Borromeo for any debts or obligations attached to the units (i.e., liability under theBlueberry Estates loan and the related promissory note to MDC).


20. Borromeo's conduct was contrary to the public interest in that as a salesperson of MCL he knew, or ought to have known, that:

a) he was purchasing units of the RCHLP on terms which were not disclosed in the prospectus and which were not offered to all subscribers of the RCHLP; and

b) he was purchasing units of the RCHLP on terms which provided him with an advantage that was not afforded to all persons who purchased units in theRCHLP.


21. Borromeo agrees to the following terms of settlement:

a) that an order be made under section 127(1) 1. of the Act that his registration be suspended for a period of three months commencing November 8, 1997; and

b) that he make a voluntary contribution to the Canadian Investor Protection Fund in the amount of $5,000, to be paid on or before the last day of hissuspension, which failure to pay will constitute a breach of this settlement agreement.


22. Borromeo hereby consents to an order of the Commission incorporating the provisions of Part IV above in the form of the order annexed hereto as Schedule"A".


23. If this Settlement Agreement is approved by the Commission, the Staff will not initiate any complaint to the Commission or request the Commission to hold ahearing or issue an order in respect of any conduct or alleged conduct of Borromeo in relation to the facts set out in Part II of the Settlement Agreement inrespect of which the Notice of Hearing was issued against Borromeo.


24. The approval of this Settlement Agreement shall be sought at a public hearing of the Commission scheduled for October 30, 1997.

25. The Staff and Borromeo agree that if the Settlement Agreement is approved by the commission, it will constitute the entirety of the evidence to be submittedrespecting Borromeo in this matter and Borromeo agrees to waive his rights to a full hearing and appeal of this matter under the Act.

26. The Staff and Borromeo agree that if the Settlement Agreement is approved by the Commission, Borromeo will not make any further statements that areinconsistent with the Settlement Agreement.

27. If, for any reason whatsoever, the Settlement Agreement is not approved by the Commission or the order set forth in Schedule "A" is not made by theCommission:

(a) the Staff and Borromeo will each be entitled to proceed with a hearing of the allegations in the Notice of Hearing, unaffected by the Settlement Agreement orthe settlement negotiations;

(b) the terms of the Settlement Agreement will not be raised in any other proceeding or disclosed to any person except with the written consent of Borromeo andthe Staff or as may be otherwise required by law; and

(c) Borromeo further agrees that he will not raise in any proceeding this Settlement Agreement or the negotiation or process of approval thereof as the basis forany attack on the Commission's jurisdiction, alleged bias, alleged unfairness or any other challenge that may otherwise be available, so long as the members of theCommission who participate in the making of any decision with respect to the Settlement Agreement do not participate as members of the Commission in thesubsequent proceeding.

28. If, prior to the approval of this settlement by the Commission, there are new facts or issues of substantial concern to the Staff regarding the facts set out inPart II of the Settlement Agreement, the Staff will be at liberty to withdraw from the Settlement Agreement. Notice of such intention will be provided toBorromeo in writing. In the event that such notice is given, the provisions of paragraph 27 of this Part will apply as if the Settlement Agreement had not beenapproved in accordance with the procedures set out herein.


29. The terms of the Settlement Agreement will be treated as confidential by both parties hereto until approved by the Commission, and forever, if for any reasonwhatsoever the Settlement Agreement is not approved by the Commission.

30. Any obligation as to confidentiality shall terminate upon the approval of the Settlement Agreement by the Commission.


31. This Settlement Agreement may be signed in one or more counterparts which shall constitute a binding agreement and a facsimile copy of any signature shallbe as effective as an original signature.

October 29th, 1997.


"Emmanuel Borromeo"

"Larry Waite"