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
HOWARD RASH


SETTLEMENT AGREEMENT
BETWEEN STAFF AND HOWARD RASH




PART I - INTRODUCTION


1. By Notice of Hearing dated March 7, 2014, the Ontario Securities Commission (the “Commission”) announced that it proposed to hold a hearing, commencing on March 28, 2014, pursuant to subsections 127(1) and 127(10) of the Securities Act, R.S.O. 1990, c. S.5, as amended (the “Act”), to consider whether it is in the public interest to make orders, as specified therein, against Howard Rash (“Rash”). The Notice of Hearing was issued in connection with the allegations as set out in the Statement of Allegations of Staff of the Commission (“Staff”) dated March 7, 2014.

2. The Commission will issue a Notice of Hearing to announce that it will hold a hearing to consider whether, pursuant to subsections 127(1) and 127(10) of the Act, it is in the public interest for the Commission to approve this Settlement Agreement and to make certain orders in respect of Rash.

PART II - JOINT SETTLEMENT RECOMMENDATION


3. Staff agree to recommend settlement of the proceeding initiated by the Notice of Hearing dated March 7, 2014 against Rash (the “Proceeding”) in accordance with the terms and conditions set out below. Rash consents to the making of an order in the form attached as Schedule “A”, based on the facts set out below.

PART III - AGREED FACTS


Overview

4. On June 8, 2010, Staff commenced proceedings against Rash in the Ontario Court of Justice by Information alleging, inter alia, one count of fraud contrary to sections 122 and 126.1(b) of the Act and one count of contravening Ontario securities law by trading in securities at a time when he was prohibited from doing so by order of the Commission contrary to section 122 of the Act (the “Offences”).

5. On August 31, 2012, Rash pleaded guilty to the Offences. As part of his plea, Rash admitted the truth of a Statement of Facts for Guilty Plea (the “Statement of Facts”) that was filed as an exhibit in that proceeding. The Statement of Facts is attached as schedule “B” to this Settlement Agreement.

6. Rash’s guilty plea was accepted by the Court and he was convicted in the Ontario Court of Justice of the Offences.

7. A sentencing hearing was subsequently held in connection with Rash’s convictions before Justice Gorewich of the Ontario Court of Justice. Following the sentencing hearing, Justice Gorewich sentenced Rash to a period of imprisonment of nine months and probation for two years.

8. As is reflected in the Statement of Facts, Rash’s convictions for the Offences arose from transactions, business and a course of conduct relating to securities and constituted non-compliance with Ontario securities law.

9. As a result of his non-compliance with Ontario securities law, Rash obtained $313,461.

10. In addition to the above facts, Staff and Rash admit the Statement of Facts attached as schedule “B” to this Settlement Agreement as agreed facts for the purposes of this Settlement Agreement.

PART IV - CONDUCT CONTRARY TO THE PUBLIC INTEREST


11. By engaging in the conduct described above and in the Statement of Facts, Rash admits and acknowledges that he contravened Ontario securities law during the Material Time. Rash further admits and acknowledges that his conviction for the Offences arose from transactions, business and a course of conduct related to securities.

12. Rash admits and acknowledges that he acted contrary to the public interest by contravening Ontario securities law and engaging in the conduct set out above and in the Statement of Facts.

PART V - TERMS OF SETTLEMENT


13. Rash agrees to the terms of settlement listed below.

14. The Commission will make an order, pursuant to subsection 127(1) of the Act, that:

(a) the Settlement Agreement is approved;

(b) pursuant to clause 2 of subsection 127(1) of the Act, trading in any securities by Rash cease permanently;

(c) pursuant to clause 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Rash is prohibited permanently;

(d) pursuant to clause 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Rash permanently;

(e) pursuant to clause 6 of subsection 127(1) of the Act, Rash is reprimanded;

(f) pursuant to clauses 8, 8.2, and 8.4 of subsection 127(1) of the Act, Rash is prohibited permanently from becoming or acting as a director or officer of any issuer, registrant, or investment fund manager;

(g) pursuant to clause 8.5 of subsection 127(1) of the Act, Rash is prohibited permanently from becoming or acting as a registrant, as an investment fund manager or as a promoter; and

(h) pursuant to clause 9 of subsection 127(1) of the Act, in respect of his failure to comply with Ontario securities law, Rash shall pay an administrative penalty in the amount of $313,461, such amount to be designated for allocation or for use by the Commission pursuant to subsection 3.4(2)(b) (i) or (ii) of the Act.

15. Rash undertakes to consent to a regulatory order made by any provincial or territorial securities regulatory authority in Canada containing any or all of the sanctions set out in sub-paragraphs 14 (b) to (g) above.

PART VI - STAFF COMMITMENT


16. If this Settlement Agreement is approved by the Commission, Staff will not initiate any other proceeding under the Act against Rash in relation to the facts set out in Part III herein, subject to the provisions of paragraph 17 below.

17. If this Settlement Agreement is approved by the Commission, and at any subsequent time Rash fails to honour the terms of the Settlement Agreement, Staff reserve the right to bring proceedings under Ontario securities law against Rash based on, but not limited to, the facts set out in Part III herein as well as the breach of the Settlement Agreement.

PART VII - PROCEDURE FOR APPROVAL OF SETTLEMENT


18. Approval of this Settlement Agreement will be sought at a hearing of the Commission scheduled on a date to be determined by the Secretary to the Commission, or such other date as may be agreed to by Staff and Rash for the scheduling of the hearing to consider the Settlement Agreement.

19. Staff and Rash agree that this Settlement Agreement, including schedule “B”, will constitute the entirety of the agreed facts to be submitted at the settlement hearing regarding Rash’s conduct in this matter, unless the parties agree that further facts should be submitted at the settlement hearing.

20. If this Settlement Agreement is approved by the Commission, Rash agrees to waive all rights to a full hearing, judicial review or appeal of this matter under the Act.

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

22. Whether or not this Settlement Agreement is approved by the Commission, Rash agrees that he will not, in any proceeding, refer to or rely upon this Settlement Agreement or the settlement negotiations as the basis of any attack on the Commission's jurisdiction, alleged bias or appearance of bias, alleged unfairness or any other remedies or challenges that may otherwise be available.

PART VIII - DISCLOSURE OF SETTLEMENT AGREEMENT


23. If, for any reason whatsoever, this Settlement Agreement is not approved by the Commission or the order attached as Schedule "A" is not made by the Commission:

(a) this Settlement Agreement and its terms, including all settlement negotiations between Staff and Rash leading up to its presentation at the settlement hearing, shall be without prejudice to Staff and Rash; and

(b) Staff and Rash shall be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing on the merits of the allegations in the Notice of Hearing and Statement of Allegations of Staff, unaffected by the Settlement Agreement or the settlement discussions/negotiations.

24. The terms of this Settlement Agreement will be treated as confidential by all parties hereto until approved by the Commission. Any obligations of confidentiality shall terminate upon approval of this Settlement Agreement by the Commission. The terms of the Settlement Agreement will be treated as confidential forever if the Settlement Agreement is not approved for any reason whatsoever by the Commission, except with the written consent of Rash and Staff or as may be required by law.

PART IX - EXECUTION OF SETTLEMENT AGREEMENT


25. This Settlement Agreement may be signed in one or more counterparts which together will constitute a binding agreement

26. A facsimile copy of any signature will be as effective as an original signature.

Signed in the presence of:

"Matthew Shields" "Howard Rash"
Witness: Howard Rash

Dated this 18th day of June, 2014



" Tom Atkinson "
STAFF OF THE ONTARIO SECURITIES COMMISION
per Tom Atkinson

Director, Enforcement Branch


Dated this 19th day of June, 2014




SCHEDULE "A"



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

- AND -

IN THE MATTER OF
HOWARD RASH

- AND -

IN THE MATTER OF A SETTLEMENT AGREEMENT BETWEEN STAFF OF THE ONTARIO SECURITIES COMMISSION AND HOWARD RASH


ORDER
(Subsection 127(1))



WHEREAS by Notice of Hearing dated March 7, 2014, the Ontario Securities Commission (the “Commission”) announced that it proposed to hold a hearing, commencing on March 28, 2014, pursuant to subsections 127(1) and 127(10) of the Securities Act, R.S.O. 1990, c. S.5, as amended (the “Act”), to consider whether it is in the public interest to make orders, as specified therein, against Howard Rash (“Rash”). The Notice of Hearing was issued in connection with the allegations as set out in the Statement of Allegations of Staff of the Commission (“Staff”) dated March 7, 2014;

AND WHEREASRash entered into a settlement agreement with Staff dated ______ _______, 2014 (the "Settlement Agreement") in which Rash agreed to a proposed settlement of the proceeding commenced by the Notice of Hearing dated March 7, 2014, subject to the approval of the Commission;

AND WHEREAS on ______ ______, 2014, the Commission issued a Notice of Hearing pursuant to subsection 127(1) of the Act to announce that it proposed to hold a hearing to consider whether it is in the public interest to approve a settlement agreement entered into between Staff and Rash;

AND UPON reviewing the Settlement Agreement, the Notices of Hearing, and the Statement of Allegations of Staff, and upon hearing submissions from counsel for Rash and from Staff;

IT IS HEREBY ORDERED THAT:

(a) the Settlement Agreement is approved;

(b) pursuant to clause 2 of subsection 127(1) of the Act, trading in any securities by Rash cease permanently from the date of this Order;

(c) pursuant to clause 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Rash is prohibited permanently from the date of this Order;

(d) pursuant to clause 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Rash permanently from the date of this Order;

(e) pursuant to clause 6 of subsection 127(1) of the Act, Rash is reprimanded;

(f) pursuant to clauses 8, 8.2, and 8.4 of subsection 127(1) of the Act, Rash is prohibited permanently from the date of this Order from becoming or acting as a director or officer of any issuer, registrant, or investment fund manager;

(g) pursuant to clause 8.5 of subsection 127(1) of the Act, Rash is prohibited permanently from the date of this Order from becoming or acting as a registrant, as an investment fund manager or as a promoter; and

(h) pursuant to clause 9 of subsection 127(1) of the Act, in respect of his failure to comply with Ontario securities law, Rash shall pay an administrative penalty in the amount of $313,461, such amount to be designated for allocation or for use by the Commission pursuant to subsection 3.4(2)(b) (i) or (ii) of the Act.


DATED AT TORONTO this day of 2014.



___________________________ ___________________________

___________________________



SCHEDULE "B"

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