IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, C. S.5, AS AMENDED
- AND -
IN THE MATTER OF OPTIONSXPRESS, INC.
STATEMENT OF ALLEGATIONS
OF STAFF OF THE ONTARIO SECURITIES COMMISSION
Staff (“Staff”) of the Ontario Securities Commission (“OSC”) make the following allegations against optionsXpress, Inc. ("Options"):
1. Options is a corporation organized under the laws of Delaware and is registered as a broker-dealer with the United States (“ U.S. ”) Securities and Exchange Commission in all of the U.S. States.
2. In late 2000, Options began operations as a web-based Internet securities firm from its principal office in Chicago, Illinois.
3. In early 2001, Options started to trade U.S. securities on behalf of Canadian residents in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island (the “Jurisdictions”) without registration as required by the applicable provincial securities legislation in each of the Jurisidictions.
4. Options had no offices or employees in Canada. Through the Options website, Canadian residents could open a self-directed Options account and execute on-line trades of securities listed or traded in the U.S.
5. Between January 1, 2001 until May 6, 2004, Options opened accounts and earned gross commissions in the Jurisdictions as follows:
Number of Accounts
Commissions Received ($ CDN)
Newfoundland & Labrador
Prince Edward Island
6. By trading without registration on behalf of Ontario residents, Options contravened section 25 of the Securities Act and engaged in conduct contrary to the public interest and Ontario securities law.
7. Staff reserve the right to make such further and other allegations as Staff may submit and the OSC may allow.
DATED AT TORONTO this 17th day of August, 2005