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



Re: David Singh



1. By Notice of Hearing dated February , 1999, (the "Notice of Hearing"), theOntario Securities Commission (the "Commission") announced that it proposedto hold a hearing to consider whether, pursuant to section 127 of the SecuritiesAct, R.S.O. 1990, c. S.5, as amended, (the "Act"), in the opinion of theCommission it is in the public interest for the Commission:

(a) to make an order that the registration of one or more of the Respondentsbe terminated or suspended or restricted for such period as theCommission may order or that terms and conditions be imposed on theirregistration;

(b) to make an order that one or both of the Respondents, David Singhand/or Jeffrey Lipton cease trading in securities, permanently or for suchtime as the Commission may direct;

(c) to make an order that one or more of the Respondents be reprimanded;and/or

(d) to make such other order as the Commission may deem appropriate.


2. The Staff of the Commission ("Staff") agree to recommend the settlement of theproceedings initiated in respect of David Singh ("Singh") by the Notice ofHearing in accordance with the terms and conditions set out below. Singhagrees to the settlement on the basis of the facts agreed to as set out below andconsents to the making of an order against him in the form attached as Schedule"A" on the basis of those facts.

3. This settlement agreement, including the attached Schedule "A", will be releasedto the public only if and when the settlement is approved by the Commission.


(i) Acknowledgement

4. Staff, and Singh agree with the facts set out in this Part III.

(ii) Factual Background

5. Infinity Investment Counsel is a corporation organized pursuant to the laws ofCanada. At all material times, Infinity Investment Counsel was the portfoliomanager of Infinity Canadian Fund and Infinity Income and Growth Fund (the"Infinity Funds") and was registered with the Commission pursuant to the Act, asinvestment counsel and portfolio manager.

6. Singh is an individual who resides in the Province of Ontario. At all materialtimes, Singh was an indirect controlling shareholder and a director of InfinityInvestment Counsel. During the relevant period, Singh was also registered withthe Commission pursuant to the Act to sell securities.

7. A Notice of Hearing and Statement of Allegations were issued by theCommission on January 12, 1999 against Singh and others. The Statement ofAllegations alleged that Singh caused or permitted an investment by the InfinityFunds which was contrary to the public interest and which contravened the Act,Regulation and National Policy 39.

8. On January 12, 1999, Singh signed a settlement agreement (the "settlementagreement") with Staff in respect of the allegations referred to in paragraph 7above. Upon issuance of the Notice of Hearing, a date of January 19, 1999 wasset for the Commission to consider the settlement agreement.

9. The investment which formed the basis of Staff's allegations was the purchaseby two of the Infinity Funds of units of an issuer called Infinity Income Trust.

10. In negotiating the terms of the settlement agreement, Singh wished to refer tothe yield generated by the Infinity Income Trust. Staff took the position thatreference to the yield alone was misleading as it did not take into account thefact that the capital value of the investment had significantly decreased.Specifically, the Infinity Funds purchased the units of Infinity Income Trust for$10.00 per unit in April 1998, and as of January 15, 1999, the units had lasttraded on the Toronto Stock Exchange at $5.75 per unit. As a result of thesediscussions, no reference to the yield or capital value of the Infinity Income Trustunits was included in the settlement agreement.

11. Staff also had specific discussions with counsel for Singh as to the inclusion inthe settlement agreement of a statement that Singh derived no financial benefitfrom the transaction. Staff considered that, as a majority shareholder of InfinityInvestment Counsel, Singh may have derived an indirect benefit from thetransaction. As a result of these discussions, the settlement agreement inparagraph 42 provided as follows: "Singh derived no direct personal financialbenefit from the investment by the Infinity Funds" [emphasis added].

12. Following the execution of the settlement agreement, the management team atInfinity Investment Counsel decided to create an advertisement to run in thebusiness press following the Commission's consideration of the settlementagreement to send a positive message to investors.

13. During the week of January 12, 1999, draft advertisements were createdinternally by Singh and his staff and revised by a public relations firm retained byInfinity Investment Counsel. On Friday, January 15, 1999, space was reservedin the business press for an advertisement to be published on January 20, 1999,the day following the Commission's consideration of the settlement agreement.

14. On January 18, 1999, Singh submitted an advertisement to the managementteam at Infinity Investment Counsel for review. The advertisement contained thefollowing two statements in reference to the investment by the Infinity Funds inthe Infinity Income Trust:

The investment decision has not harmed our clients in any way.

No one at Infinity derived any financial benefit from this transaction.


15. The advertisement was further revised on January 18, 1999. Singh reviewedand approved the revised advertisement prior to its submission to the businesspress on January 18, 1999. Singh did not ask counsel for Infinity InvestmentCounsel or his own personal counsel who represented him in negotiating thesettlement agreement to review the advertisement for compliance with thesettlement agreement.

16. On January 19, 1999, the Commission approved the settlement agreement. Atthe hearing, Vice-Chair Geller expressed to Singh's counsel that, as a result ofstatements in the press attributed to Singh, Vice-Chair Geller had concerns thatSingh did not take the Commission's process seriously. Vice-Chair Gellerindicated that he expected Singh to issue a press release indicating that he didview the process seriously.

17. On January 19, 1999, Infinity Fund Management Inc. issued a press release.The press release stated that "Mr. Singh views this matter very seriously". Thepress release also referred to the yield of the Infinity Income Trust withoutmaking reference to the capital diminution of the investment.

18. As Staff considered the statement regarding the yield to be misleading, Staffadvised counsel for Infinity Fund Management Inc. that the press release oughtto be corrected. Later in the day on January 19, 1999, Infinity FundManagement Inc. issued a second press release which referred to the yield andadded the following statement:

The yield is calculated based on an initial investment of $10. Inassessing the value of this investment it should be noted that the closingprice of Infinity Income Trust Units on the Toronto Stock Exchange onJanuary 15, 1999 was $5.75.


19. On January 20, 1999, the advertisement was published in the business press.

20. Despite the position of Staff that reference to the yield of the Infinity IncomeTrust was misleading in the absence of a reference to the capital diminution, theadvertisement contained the following statement:

One of the investments we included in two of our funds was the InfinityIncome Trust. It is similar to the now obsolete, highly desirable mutualfund limited partnerships. In 1998, the Infinity Income Trust yielded anannualized return of 9%. We believe that this investment is an excellentfit to our long term objectives and continue to hold it for the long term.

21. Despite the position of Staff that Singh may have derived an indirect benefit fromthe Infinity Funds' purchasing units of Infinity Income Trust, the advertisementalso contained the following statement:

No one at Infinity derived any financial benefit from this transaction.


22. Paragraph 51 of the settlement agreement provides as follows:

If this Settlement Agreement is approved by the Commission, none of theparties to this Settlement Agreement will make any public statement thatis inconsistent with this Settlement Agreement.

23. The statement in the advertisement that no one at Infinity derived any financialbenefit from the investment in the Infinity Income Trust contravened paragraph51 of the settlement agreement.

24. The advertisement contained the following statement regarding the settlement ofthe Commission proceedings:

The Ontario Securities Commission has alleged that this investmentviolated the spirit of Securities Act [sic] - We disagree, and so does ourlegal counsel - but we have reached an agreement with the Commissionto avoid prolonging this matter.


25. The statement referred to in paragraph 24 was misleading for three reasons:

a. Staff alleged not only that the investment violated the spirit of theSecurities Act but also that it violated provisions of the Act, Regulationand Policy;

b. the statement was contrary to the admissions made by Singh in thesettlement agreement respecting his conduct in connection with theinvestment; and

c. the statement suggested that Singh did not take responsibility for theconduct for which he was sanctioned by the Commission, but simplyentered the settlement agreement to bring closure to Staff's allegations.

26. Upon reviewing the advertisement in the business press, Staff expressedconcerns to counsel for Infinity Investment Counsel and Singh that theadvertisement was misleading and contrary to the terms of the settlementagreement. In response to Staff's concerns, Infinity Investment Counsel decidedto publish a retraction in the business press. At Singh's request, the wording ofthe retraction was reviewed by Staff prior to publication.

27. On January 26, 1999, the retraction was published in the business press. Theretraction was significantly less prominent than the original advertisement.


28. Singh has acknowledged to Staff and acknowledges in this agreement that heassumes full responsibility for the publication of the advertisement.


29. Singh agrees that his conduct was contrary to the public interest as he permittedthe publication of an advertisement which was misleading, contained statementsinconsistent with the settlement agreement and contravened the prohibitionagainst misleading sales communications as set out in section 16 of NationalPolicy 39.


30. Singh agrees to the following terms of settlement:

a. Singh's current application for registration as a salesperson with FortuneFinancial Corporation is withdrawn and he will not reapply for registrationwith the Commission in any capacity for a period of 3 months from thedate of the Order of the Commission in this matter; and


b. pursuant to clause 1 of subsection 127(1) of the Act, the registrationgranted to Singh under Ontario securities law in respect of FortuneInvestment Corporation will be suspended for a period of 3 months fromthe date of the Order of the Commission in this matter.


31. If this Settlement Agreement is approved by the Commission, Staff will notinitiate any complaint to the Commission or request the Commission to hold ahearing or issue any order in respect of any conduct or alleged conduct of Singhin relation to the facts set out in Part III of this Settlement Agreement.


32. The approval of the settlement as set out in the Settlement Agreement shall besought at a public hearing before the Commission scheduled for such date as isagreed to by Staff and Singh in accordance with the procedures describedherein and such further procedures as may be agreed upon between Singh andStaff.

33. If this Settlement Agreement is approved by the Commission, it will constitute theentirety of the evidence to be submitted respecting Singh in this matter andSingh agrees to waive his right to a full hearing and appeal of this matter underthe Act.

34. If this Settlement Agreement is approved by the Commission, neither of theparties to this Settlement Agreement will make any statement that is inconsistentwith this Settlement Agreement.

35. If, for any reason whatsoever, this settlement is not approved by theCommission, or the order set forth in Schedule "A" is not made by theCommission:

a. each of Staff and Singh will be entitled to proceed to a hearing of theallegations in the Notice of Hearing and related Statement of Allegationsunaffected by the Settlement Agreement or the settlement negotiations;

b. the terms of the Settlement Agreement will not be raised in any otherproceeding or disclosed to any person except with the written consent ofSingh and Staff or as may be otherwise required by law; and

c. Singh further agrees that he will not raise in any proceeding theSettlement Agreement or the negotiation or process of approval thereofas a basis for any attack on the Commission's jurisdiction, alleged bias,appearance of bias, alleged unfairness or any other challenge that mayotherwise be available, provided that a member of the Commission whoparticipates in the aforementioned hearing shall not participate in anyfurther proceeding based on or arising out of the facts contained in PartIII.


36. If, prior to the approval of this Settlement Agreement by the Commission, thereare new facts or issues of substantial concern, in the view of Staff, regarding thefacts set out in Part III of this Settlement Agreement, Staff will be at liberty towithdraw from this Settlement Agreement. Notice of such intention will beprovided to Singh in writing. In the event of such notice being given, theprovisions of paragraph 35 in this part will apply as if this Settlement Agreementhad not been approved in accordance with the procedures set out herein.


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

38. Any obligation as to confidentiality shall terminate upon the approval of thisSettlement Agreement by the Commission.


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

DATED this 10th day of February, 1999.


"David Singh"

"Charlie Macfarlane"