Settlement Agreement: In the Matter of Gregory Hryniw and Walter Hryniw

1. By Amended Notice of Hearing dated October 8, 2003, the Ontario Securities Commission announced that it proposed to hold a hearing to consider whether, pursuant to sections 127 and 127.1 of the Securities Act, R.S.O. 1990, c. S.5, as amended, (the “Act”) it is in the public interest for the Commission to make an order that:

1. the Respondents, or either of them, cease trading in securities permanently or for such period as the Commission may order;
    
2. the exemptions contained in Ontario securities law do not apply to the Respondents, or either of them, permanently or for such period as the Commission may order;
3. the Respondents, or either of them, resign any positions they hold as a director or officer of any issuer;
4. the Respondents, or either of them, be prohibited from becoming or acting as a director or officer of any issuer permanently or for such period as the Commission may order;
5. the Respondents, or either of them, be reprimanded;
6. the Respondents, or either of them, pay the costs of Staff’s investigation and this proceeding; and
7. such other order as the Commission considers appropriate.

2. Staff recommend settlement of the allegations against the Respondent, Gregory Hryniw (the “Respondent”) in accordance with the terms and conditions set out below. The Respondent agrees to the settlement on the basis of the facts agreed to as set out in Part IV herein and consents to the making of an order against him in the form attached as Schedule “A” on the basis of the facts set out in Part IV herein.

3. This settlement agreement, including the attached Schedule “A” (collectively, the “Settlement Agreement”) will be released to the public only if and when the Settlement Agreement is approved by the Commission.

III. ACKNOWLEDGEMENT

4. Staff and the Respondent agree with the facts set out in Part IV herein for the purpose of this settlement proceeding only and further agree that this agreement of facts is without prejudice to the Respondent in any other proceedings of any kind including, but without limiting the generality of the foregoing, any proceedings brought by the Commission under the Act or any civil or other proceedings which may be brought by any other person or agency.

IV. AGREED FACTS

Factual Background

5. Golden Hope Mines Limited is a reporting issuer in the Province of Ontario. The shares of Golden Hope were, at the material time, listed and posted for trading on the Canadian Dealing Network.

6. Gregory Hryniw is a resident in the City of Montreal in the Province of Quebec. At the material time, G. Hryniw was a 27 year old geologist and was a director of Golden Hope.  

7. Walter Hryniw is G. Hryniw’s father and is a resident of the City of Montreal in the Province of Quebec.

8. In or around May 8, 1998, Staff commenced an investigation with respect to trades that were made in shares of Golden Hope immediately prior to a favourable public announcement on June 3, 1997 concerning Golden Hope’s participation in a private placement.

9. In particular, Staff were investigating the purchase of 585,000 Golden Hope shares through an account held at The Bank of N.T. Butterfield & Sons Limited (“Butterfield Bank”) in Hamilton, Bermuda (the “Bermuda Account”).

10 During the course of Staff’s investigation of this matter, G. Hryniw attended at the Commission’s offices for a voluntary interview in April, 2002 and was asked whether he or W. Hryniw had any banking or brokerage accounts in Bermuda. G. Hryniw advised that to his knowledge they did not and that he had not heard of the Butterfield Bank.

11. Pursuant to an application to the Attorney General of Bermuda by Staff, Staff obtained documentation from the Butterfield Bank which revealed that the Bermuda Account was in the names of W. Hryniw and G. Hryniw, and which confirmed the trading in Golden Hope shares in the Bermuda Account in June, 1997. The documentation included copies of the passports of both G. Hryniw and W. Hryniw, account statements, security transaction forms and a Custody Agreement signed by G. Hryniw.

12. The Respondent admits that the representations made to Staff set out in paragraph 10 above were false and misleading.

Conduct Contrary to the Ontario Securities Act and the Public Interest  

13. The Respondent’s conduct as described above constituted a contravention of s. 122 of the Act and was conduct contrary to the public interest.

V. RESPONDENT'S REPRESENTATION

14. The Respondent represents that only W. Hryniw opened, operated and traded in the Bermuda Account.

15. The Respondent represents that he resigned his position as a director of Golden Hope in February, 2005. He further represents that he does not currently hold any other positions as officer or director of any issuer.

16. The Respondent agrees to the following terms of settlement:

1. the Respondent will cease trading in securities for a period of three years effective from the date of the Order of the Commission approving the Settlement Agreement;
2. the exemptions contained in Ontario securities law will not apply to the Respondent for a period of three years, effective from the date of the Order of the Commission approving the Settlement Agreement;
3. the Respondent will not act as an officer or director of any issuer for a period of three years, effective from the date of the Order of the Commission approving the Settlement Agreement;
4. the Respondent will be reprimanded by the Commission;
5. the Respondent agrees to attend the hearing on June 16, 2005 by telephone conference, or such other date as may be agreed to by the parties for the scheduling of the hearing to consider the Settlement Agreement; and
6. the Respondent will make a total payment of $2,500.00 to the Commission in respect of a portion of the Commission’s costs with respect to this matter, such payment to be payable in the amounts of $500.00 upon approval of this Settlement Agreement and $500.00 per month payable on July 31, 2005, August 31, 2005, September 30, 2005 and October 31, 2005.

17. If this Settlement Agreement is approved by the Commission, Staff will not initiate any other proceeding under Ontario securities law in respect of any conduct or alleged conduct of the Respondent in relation to the facts set out in Part IV of this Settlement Agreement, subject to the provisions of paragraphs 21 and 22 below.

25. The Settlement Agreement and its terms will be treated as confidential by Staff and the Respondent until approved by the Commission, and forever if, for any reason whatsoever, the Settlement Agreement is not approved by the Commission, except with the written consent of Staff and the Respondent, or as may be required by law.