Proceedings

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IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, c. S.5 AS AMENDED

-AND-

IN THE MATTER OF ROBERT JOSEPH VANIER
(a.k.a. CARL JOSEPH GAGNON)

SETTLEMENT AGREEMENT BETWEEN STAFF
OF THE ONTARIO SECURITIES COMMISSION
AND ROBERT JOSEPH VANIER



PART I – INTRODUCTION

1. The Ontario Securities Commission (the “Commission”) will issue a Notice of Hearing to announce that it will 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 approve this Settlement Agreement and to make certain orders in respect of Robert Joseph Vanier (the “Respondent” or “Vanier”).

PART II – JOINT SETTLEMENT RECOMMENDATION

2. Staff of the Commission (“Staff”) agree to recommend settlement of the proceeding commenced by Notice of Hearing dated March 29, 2010 (the “Proceeding”) against Vanier according to the terms and conditions set out in Part V of this Settlement Agreement. Vanier agrees to the making of an order in the form attached as Schedule “A”, based on the facts set out below.

PART III – AGREED FACTS

3. Staff and the Respondent agree, solely for the purposes of this Settlement Agreement, any order of the Commission contemplated hereby, and any other regulatory proceeding commenced by a securities regulatory authority, with the facts and conclusions set out in Part III of this Settlement Agreement. Nothing in this Settlement Agreement is intended to be an admission of civil liability by the Respondent to any person or company; such liability is expressly denied.

A. The Respondent

4. Vanier is a resident of Ontario and has never been registered with the Commission in any capacity.

5. Carl Joseph Gagnon (“Gagnon”) was a resident of Quebec and has never been registered with the Commission in any capacity.

6. Vanier and Gagnon are the same person. The Respondent was in the Quebec witness protection program. The Respondent changed his name from Gagnon to Vanier before 2002.

7. Gagnon has a record of at least 70 convictions for offences under the Criminal Code of Canada, R.S.C. 1985, c. C-46, as amended (the “Criminal Record”), including numerous convictions for fraud.

B. Onco Petroleum Inc.

8. Onco Petroleum Inc. (“Onco”) was incorporated under the laws of Ontario on October 31, 2002 and continued as a federal corporation under the laws of Canada on September 29, 2006.

9. Vanier was Chairman of the Board of Onco from October 31, 2002 until April 6, 2006; Vice President and Secretary of Onco from October 31, 2002 until March 31, 2003; and President and Chief Executive Officer of Onco from March 13, 2007 to September 25, 2008.

10. On October 12, 2007, Onco filed a prospectus with the Commission to gain reporting issuer status (the “Prospectus”). No securities were being offered pursuant to the Prospectus.

11. Vanier, as President and Chief Executive Officer of Onco, signed a Certificate of the Corporation dated October 12, 2007, certifying that “the foregoing constitutes full, true and plain disclosure of all material facts relating to the securities previously issued by the issuer as required by Part XV of the Securities Act (Ontario) and the regulations thereunder” (the “Certificate of the Corporation”).

12. Vanier, as a Promoter of Onco, signed a Certificate of Promoters dated October 12, 2007, certifying that “the foregoing constitutes full, true and plain disclosure of all material facts relating to the securities previously issued by the issuer as required by Part XV of the Securities Act (Ontario) and the regulations thereunder” (the “Certificate of Promoters”).

13. The Certificate of the Corporation and the Certificate of Promoters were filed with the Prospectus with the Commission on October 12, 2007.

C. Misrepresentations to Staff of the Commission

14. During the course of filing the Prospectus with the Commission, Vanier did not disclose that he was previously known as Gagnon, nor did he disclose the Criminal Record.

15. Under the heading “Use of Available Funds”, the Prospectus stated: “At June 30, 2007, the Company held approximately $20,499,208 in U.S. funds (equivalent to $21,839,856 at that date).”

16. At June 30, 2007, Onco did not have $21,839,856 in available assets. Approximately $20,000,000 was owed to Onco and was evidenced by an unsecured promissory note from William Del Biaggio III (the “Promissory Note”). There was no notation in the Prospectus regarding the Promissory Note.

D. Misrepresentations to Canadian Trading and Quotation System Inc.

17. On August 20, 2007, Vanier filed an application on behalf of Onco with Canadian Trading and Quotation System Inc. (“CNQ”), to have its securities qualified for listing and trading on the CNQ (the “Application”).

18. The Application contained Form 2A - Listing Statement - Certificate of the Issuer, signed by Vanier as Chief Executive Officer of Onco which stated: “Pursuant to a resolution duly passed by its Board of Directors, Onco Petroleum Inc. hereby applies for the listing of the above mentioned securities on CNQ. The foregoing contains full, true and plain disclosure of all material information relating to Onco Petroleum Inc. It contains no untrue statement of material fact and does not omit to state a material fact that is required to be stated or that is necessary to prevent a statement that is being made from being false or misleading in light of the circumstances in which it was made.”

19. The Application also contained Form 2B - Listing Summary containing, among other things, financial information as at December 31, 2006 that listed Current Assets as $23,831,817. The Application contained no reference to the Promissory Note.

20. The Application contained Form 3 - Personal Information Form, requiring the applicant to answer a number of questions and to swear/declare that all the answers are true and correct to the best of their knowledge (the “PIF Affidavit”) The PIF Affidavit was sworn by Vanier on April 18, 2007.

21. In the PIF Affidavit, in response to question 2: “Have you ever had, used or operated under, or carried on business under any name other than the name mentioned in Question 1(a) [above] of this form, or have you ever been known under any other name?”, Vanier answered no.

22. In the PIF Affidavit, in response to question 4(b): “Have you ever been convicted under any law of any province, territory, state or country for contraventions or criminal offences not noted in 4(a) above [securities-related offences]?”, Vanier answered no.

PART IV – CONDUCT CONTRARY TO ONTARIO SECURITIES LAW
AND THE PUBLIC INTEREST

23. By engaging in the conduct described above in Part III of this Settlement Agreement, the Respondent has breached Ontario securities law by:

  1. failing to provide full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed contrary to section 56(1) of the Act;
  2. making statements in an application, preliminary prospectus, prospectus, financial statement or other document required to be filed or furnished under Ontario securities law that, in a material respect and at the time and in light of the circumstances in which it was made, were misleading or untrue or did not state a fact that was required to be stated or that was necessary to make the statement not misleading contrary to section 122(1)(b) of the Act; and
  3. as the President and Chief Executive Officer of Onco did authorize, permit or acquiesce in the commission of the violations of sections 56(1) and 122(1)(b) of the Act, as set out above, by Onco pursuant to section 129.2 of the Act.

24. The Respondent’s conduct was contrary to the public interest.

PART V – TERMS OF SETTLEMENT

25. Vanier agrees to the terms of settlement listed below.

26. The Commission will make an order pursuant to section 127(1) and section 127.1 of the Act that:

  1. The Settlement Agreement is approved;
  2. Trading in and acquisition of any securities by Vanier shall cease for a period of thirteen (13) years commencing thirty (30) days after the date of the Commission’s order, with the exception that Vanier be permitted to trade in and acquire securities within a single account for a registered retirement savings plan (as defined in the Income Tax Act (Canada)) in which he has sole legal and beneficial ownership and interest, provided that:
    1. the securities are listed and posted for trading on the Toronto Stock Exchange, the New York Stock Exchange or NASDAQ (or their successor exchanges) or are issued by a mutual fund which is a reporting issuer;
    2. Vanier does not own legally or beneficially more than one percent of the outstanding securities of the class or series of the class in question; and
    3. Vanier must carry out any permitted trading through a registered dealer and through one account opened in his name only and must close any other accounts;
  3. Any exemptions contained in Ontario securities law do not apply to Vanier for a period of thirteen (13) years commencing thirty (30) days after the date of the Commission’s order;
  4. Vanier is reprimanded;
  5. Vanier resign any positions that he holds as a director or officer of an issuer, registrant, or investment fund manager within thirty (30) days of the date of the Commission’s order;
  6. Vanier is permanently prohibited from becoming or acting as a director or officer of any issuer, registrant, or investment fund manager commencing thirty (30) days after the date of the Commission’s order;
  7. Vanier is permanently prohibited from becoming or acting as a registrant, as an investment fund manager or as a promoter; and
  8. Vanier pay the sum of $10,000 towards the Commission’s costs relating to the investigation of this matter.

27. Vanier agrees to personally make any payments ordered above by certified cheque or bank draft when the Commission approves this Settlement Agreement. Vanier will not be reimbursed for, or receive a contribution toward, this payment from any other person or company.

PART VI – STAFF COMMITMENT

28. If the Commission approves this Settlement Agreement, Staff will not commence any proceeding under Ontario securities law in relation to the facts set out in Part III of this Settlement Agreement, subject to the provisions of paragraph 29 below.

29. If the Commission approves this Settlement Agreement and Vanier fails to comply with any of the terms of the Settlement Agreement, Staff may bring proceedings under Ontario securities law against Vanier. These proceedings may be based on, but are not limited to, the facts set out in Part III of this Settlement Agreement as well as the breach of the Settlement Agreement.

PART VII – PROCEDURE FOR APPROVAL OF SETTLEMENT

30. The parties will seek approval of this Settlement Agreement at an in camera hearing before the Commission scheduled for August 9, 2010, or on another date agreed to by Staff and Vanier, according to the procedures set out in this Settlement Agreement and the Commission’s Rules of Procedure.

31. Staff and Vanier agree that this Settlement Agreement will form all of the agreed facts that will be submitted at the settlement hearing on Vanier’s conduct, unless the parties agree that additional facts should be submitted at the settlement hearing.

32. If the Commission approves this Settlement Agreement, Vanier agrees to waive all rights to a full hearing, judicial review or appeal of this matter under the Act.

33. If the Commission approves this Settlement Agreement, neither party will make any public statement that is inconsistent with this Settlement Agreement or with any additional agreed facts submitted at the settlement hearing.

34. Whether or not the Commission approves this Settlement Agreement, Vanier will not use, in any proceeding, this Settlement Agreement or the negotiation or process of approval of this agreement as the basis for any attack on the Commission’s jurisdiction, alleged bias, alleged unfairness, or any other remedies or challenges that may otherwise be available.

PART VIII – DISCLOSURE OF SETTLEMENT AGREEMENT

35. If the Commission does not approve this Settlement Agreement or does not make the order attached as Schedule “A” to this Settlement Agreement:

  1. this Settlement Agreement and all discussions and negotiations between Staff and the Respondent before the settlement hearing takes place will be without prejudice to Staff and the Respondent; and
  2. Staff and the Respondent will each be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of the allegations contained in the Statement of Allegations. Any proceedings, remedies and challenges will not be affected by this Settlement Agreement, or by any discussions or negotiations relating to this agreement.

36. Both parties will keep the terms of the Settlement Agreement confidential until the Commission approves the Settlement Agreement and a period of four (4) months has elapsed from the date of the Commission’s order approving the Settlement Agreement. At that time, the parties will no longer have to maintain confidentiality. If the Commission does not approve the Settlement Agreement, both parties must continue to keep the terms of the Settlement Agreement confidential, unless they agree in writing not to do so or if required by law.

PART IX – EXECUTION OF SETTLEMENT AGREEMENT

37. The parties may sign separate copies of this agreement. Together, these signed copies will form a binding agreement.

38. A fax copy of any signature will be treated as an original signature.

Dated this 5th day of August, 2010.

 

            “Robert Vanier”                                             “Silvia DeBastos”_____
Robert Joseph Vanier                                                              Witness

 

 

____Kathryn Daniels”__________   
Deputy Director, Enforcement Branch

 

Schedule “A”

IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, C. S.5, AS AMENDED

-AND-

IN THE MATTER OF ROBERT JOSEPH VANIER
(a.k.a. CARL JOSEPH GAGNON)

ORDER
(sections 127 and 127.1)



    WHEREAS on August 6, 2010, the Commission issued a Notice of Hearing pursuant to section 127 and 127.1 of the Securities Act, R.S.O. 1990 c. S.5 as amended (the "Act"), to consider whether it was in the public interest to approve a settlement agreement entered into between the Robert Joseph Vanier (the “Respondent” or “Vanier”) and Staff of the Commission (“Staff”);

    AND WHEREAS the Vanier entered into a Settlement Agreement with Staff dated August 4, 2010 (the "Settlement Agreement") in which he agreed to a settlement of the proceedings commenced by the Notice of Hearing dated March 29, 2010, subject to the approval of the Commission;

    AND UPON reviewing the Settlement Agreement and Staff's Statement of Allegations dated March 29, 2010, and upon reading the submissions from counsel for Staff, and upon hearing submissions from counsel for Staff and counsel for Vanier;

    AND WHEREAS Vanier acknowledges that the facts set out in Part III of the Settlement Agreement constituted a breach of sections 56(1), 122(1)(b) and 129.2 of the Act and conduct contrary to the public interest under the Act;

    AND WHEREAS the Commission is of the opinion that it is in the public interest to make this order;

    IT IS HEREBY ORDERED THAT:

  1. the Settlement Agreement between Vanier and Staff is approved;
  2. Vanier shall cease trading in and acquisitions of any securities for a period of thirteen (13) years commencing thirty (30) days after the date of this order, with the exception that Vanier be permitted to trade in and acquire securities within a single account for a registered retirement savings plan (as defined in the Income Tax Act (Canada)) in which he has sole legal and beneficial ownership and interest, provided that:
    1. the securities are listed and posted for trading on the Toronto Stock Exchange, the New York Stock Exchange or NASDAQ (or their successor exchanges) or are issued by a mutual fund which is a reporting issuer;
    2. Vanier does not own legally or beneficially more than one percent of the outstanding securities of the class or series of the class in question; and
    3. Vanier must carry out any permitted trading through a registered dealer and through one account opened in his name only and must close any other accounts;
  3. any exemptions in Ontario securities law do not apply to Vanier for a period of thirteen (13) years commencing thirty (30) days after the date of this order;
  4. Vanier is hereby reprimanded;
  5. Vanier resign any positions that he holds as a director or officer of an issuer, registrant, or investment fund manager within thirty (30) days of the date of this order;
  6. Vanier is prohibited from becoming or acting as an officer or director of an issuer, registrant or investment fund manager permanently commencing thirty (30) days after the date of this order;
  7. Vanier is prohibited from becoming or acting as an registrant, investment fund manager or promoter permanently; and
  8. Vanier agrees to pay costs of the investigation in the amount of $10,000 to the Commission.


Dated this                   day of August, 2010.

 

                                                            ______________________________