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

THOMAS HINKE

STATEMENT OF ALLEGATIONS
OF STAFF OF THE ONTARIO SECURITIES COMMISSION

Staff of the Ontario Securities Commission make the following allegations:

1. Thomas Hinke (“Hinke”) is an individual residing in Ontario. During the time period April 11, 2005 to January 3, 2006 (the “Material Period”), Hinke held in excess of 10% of the shares of Thermal Energy International Inc. (“TEI”). In addition to holding in excess of 10% of the shares of TEI, during the material period, Hinke held the position of Chief Technical Officer until his termination on June 23, 2005.

2. TEI was incorporated pursuant to the laws of Ontario and is a reporting issuer, as defined in the Securities Act, R.S.O. 1990 c. S.5.

3. Prior to the Material Period Hinke held a number of senior officer and director positions at TEI. During the period March 11, 2005 to March 17, 2005 Hinke resigned as Chief Compliance Officer, Chief Financial Officer, Director and Co-Chair of the Board.

Failure to File Insider Trades

4. During the Material Period Hinke executed trades over 32 time periods in TEI, which resulted in the reduction of Hinke’s holdings in TEI from 16.1% to 11.5%. The trades resulted in the sale of 870,050 shares valued at a total of $188,518.40 in TEI during the Material Period. The sales were executed through the following accounts:

  • account no. BC 12346C held by Hinke at Bolder Investment Partners (“Bolder”)
  • account no. 04306160 held by Hinke at Global Securities Corporation (“Global”)
  • account no. 5650471013 held by Hinke at CIBC World Markets Inc. (“CIBC”)

5. For each of the above-noted trades in TEI, Hinke failed to file an insider report as required by the Act.

6. On December 12, 2005, Hinke was notified by Staff of the Commission of the failure to file reports as noted above. Notwithstanding this notice, Hinke continued to trade in shares of TEI and continued to file insider reports on a delinquent basis, as more particularly detailed in Schedule “A” attached hereto. Subsequently, Hinke brought current all insider reports for the Material Period.

7. Section 107(2) of the Ontario Securities Act, R.S.O. 1990, c.S.5, as amended requires Hinke to file a report of each change in his direct or indirect beneficial ownership of the reporting issuer, TEI. Section 107(2) required Hinke to file the reports within 10 days from the day the change in ownership took place.

Breach of Prior Settlement Agreement

8. Pursuant to a an Executive Director’s Settlement Agreement dated April 9, 2002 between Hinke and the Executive Director of the Commission (the “Agreement”), Hinke acknowledged that he had contravened Ontario Securities law by failing to file insider reports pursuant to s. 107(2) for trades of shares in TEI. Pursuant to the terms of the Agreement, Hinke undertook to comply with all regulatory filing requirements in relation to TEI and was ordered to pay $8,000 to the Ontario Securities Commission’s Investor Education Fund.

Conduct Contrary to the Public Interest

9. The failure to file insider trading reports was a failure to comply with his Agreement and undertaking.

10. By failing to file insider trading reports as required by section 107(2) and by breaching the express terms of the Agreement, Hinke has repeatedly breached Ontario securities law and engaged in conduct contrary to the public interest.

DATED AT TORONTO this 6th day of March, 2006.

 

 

Schedule A

 

Hinke Bolder Acct. BC12346C 
Date 
Buy/Sell
Quanity Price  Cdn/USD Report Filed Date of Filing Late Filing
Value
4/11/2005
Sell
8,500 0.330 C
Yes
12/29/2005
Yes
2,805.00
4/11/2005
Sell
32,000 0.325 C
Yes
12/29/2005
Yes
10,400.00
4/11/2005
Sell
1,500 0.330 C
Yes
12/29/2005
Yes
495.00
4/15/2005
Sell
9,000 0.320 C
Yes
12/29/2005
Yes
2,880.00
4/19/2005
Sell
6,500 0.350 C
Yes
12/29/2005
Yes
2,275.00
4/21/2005
Sell
500 0.325 C
Yes
12/29/2005
Yes
162.50
4/25/2005
Sell
24,000 0.325 C
Yes
12/29/2005
Yes
7,800.00
4/25/2005
Sell
4,000 0.330 C
Yes
12/29/2005
Yes
1,320.00
5/18/2005
Sell
500 0.300 C
Yes
12/29/2005
Yes
150.00
5/19/2005
Sell
10,000 0.300 C
Yes
12/29/2005
Yes
3,000.00
5/24/2005
Sell
10,000 0.300 C
Yes
12/29/2005
Yes
3,000.00
5/24/2005
Sell
10,000 0.315 C
Yes
12/29/2005
Yes
3,150.00
5/24/2005
Sell
10,000 0.310 C
Yes
12/29/2005
Yes
3,100.00
5/25/2005
Sell
15,000 0.320 C
Yes
12/29/2005
Yes
4,800.00
5/27/2005
Sell
20,500 0.305 C
Yes
12/29/2005
Yes
6,252.50
5/27/2005
Sell
10,000 0.295 C
Yes
12/29/2005
Yes
2,950.00
5/30/2005
Sell
19,000 0.290 C
Yes
12/29/2005
Yes
5,510.00
6/10/2005
Sell
20,000 0.280 C
Yes
12/29/2005
Yes
5,600.00
6/13/2005
Sell
5,000 0.335 C
Yes
12/29/2005
Yes
1,675.00
6/16/2005
Sell
3,000 0.280 C
Yes
12/29/2005
Yes
840.00
6/16/2005
Sell
3,500 0.270 C
Yes
12/29/2005
Yes
945.00
6/16/2005
Sell
10,000 0.275 C
Yes
12/29/2005
Yes
2,750.00
6/24/2005
Sell
11,000 0.270 C
Yes
12/29/2005
Yes
2,970.00
Total Volume 243,500 Total Value 74,830.00
Bolder Acct BC12346C
7/4/2005
Sell
8,500 0.280 C
Yes
1/4/2006
Yes
2,380.00
7/4/2005
Sell
10,000 0.275 C
Yes
1/4/2006
Yes
2,750.00
7/4/2005
Sell
10,000 0.280 C
Yes
1/4/2006
Yes
2,800.00
7/13/2005
Sell
17,000 0.250 C
Yes
1/4/2006
Yes
4,250.00
Total Volume 45,500 Total Value 12,180.00
Global Acct. 04306160
9/6/2005
Sell
32,000 0.270 C
Yes
1/4/2006
Yes
8,640.00
10/13/2005
Sell
20,000 0.250 C
Yes
1/4/2006
Yes
5,000.00
Total Volume 52,000 Total Value 13,640.00
CIBC Wood Acct. 5002066123
11/10/2005
Sell
550 0.19 C
Yes
2/28/2006
Yes
103.40
Total Volume 550 Total Value 103.40
Global Acct. 04306160
11/10/2005
Sell
11,500 0.200 C
Yes
1/4/2006
Yes
2,300.00
11/11/2005
Sell
13,000 0.180 C
Yes
1/4/2006
Yes
2,340.00
11/28/2005
Sell
10,000 0.260 C
Yes
1/4/2006
Yes
2,600.00
11/28/2005
Sell
10,000 0.250 C
Yes
1/4/2006
Yes
2,500.00
Total Volume 44,500 Total Value 9,740.00
CIBC Wood Acct. 5650471013
12/9/2005
Sell
3,000 0.185 C
Yes
1/16/2006
Yes
555.00
12/14/2005
Sell
54,000 0.160 C
Yes
1/16/2006
Yes
8,640.00
12/14/2005
Sell
36,500 0.165 C
Yes
1/16/2006
Yes
6,022.50
12/14/2005
Sell
1,500 0.170 C
Yes
1/16/2006
Yes
255.00
12/15/2005
Sell
46,500 0.160 C
Yes
1/16/2006
Yes
7,440.00
12/15/2006
Sell
23,500 0.165 C
Yes
1/16/2006
Yes
3,877.50
12/15/2005
Sell
1,000 0.185 C
Yes
1/16/2006
Yes
185.00
Total Volume 166,000 Total Value 26,975.00
CIBC Wood Acct. 5650471013
12/15/2005
Sell
4,000 0.185 C
Yes
2/28/2006
Yes
740.00
Total Volume 4,000 Total Value 740.00
CIBC Wood Acct. 5650471013
12/16/2005
Sell
4,500 0.185 C
Yes
1/16/2006
Yes
832.50
12/19/2005
Sell
38,000 0.150 C
Yes
1/16/2006
Yes
5,700.00
12/19/2005
Sell
12,000 0.160 C
Yes
1/16/2006
Yes
1,920.00
12/22/2005
Sell
32,500 0.155 C
Yes
1/16/2006
Yes
5,037.50
12/22/2005
Sell
22,500 0.160 C
Yes
1/16/2006
Yes
3,600.00
12/22/2005
Sell
5,000 0.170 C
Yes
1/16/2006
Yes
850.00
12/23/2005
Sell
42,500 0.150 C
Yes
1/16/2006
Yes
6,375.00
12/23/2005
Sell
7,500 0.155 C
Yes
1/16/2006
Yes
1,162.50
Total Volume 164,500 Total Value 25,477.50
Global Acct. 04306160
12/29/2005
Sell
10,000 0.180 C
Yes
1/16/2006
Yes
1,800.00
12/29/2005
Sell
25,000 0.170 C
Yes
1/16/2006
Yes
4,250.00
12/30/2005
Sell
14,500 0.185 C
Yes
1/16/2006
Yes
2,682.50
Total Volume 49,500 Total Value 8,732.50
CIBC Wood Acct. 5650471013
1/3/2006
Sell
95,000 0.160 C
Yes
1/16/2006
Yes
15,200.00
1/3/2006
Sell
5,000 0.180 C
Yes
1/16/2006
Yes
900.00
Total Volume 100,000 Total Value 16,100.00