Securities Law & Instruments

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF

DUAL CAPITAL MANAGEMENT LIMITED,

WARREN LAWRENCE WALL, SHIRLEYJOAN WALL

 

ORDER

(Sections 127 and 127.1)

WHEREAS on April 30, 2003 the OntarioSecurities Commission (the "Commission") issued anamended Notice of Hearing (the "Notice of Hearing")pursuant to sections 127 and 127.1 of the Securities Act(the "Act") in respect of Dual Capital ManagementLimited ("Dual Capital"), Warren Lawrence Wall ("WarrenWall"), and Shirley Joan Wall ("Joan Wall");

AND WHEREAS the respondents entered intoa settlement agreement dated June 19, 2003 (the "SettlementAgreement") wherein they agreed to a proposed settlementof the proceedings commenced by the Notice of Hearing, subjectto the approval of the Commission, and wherein Warren Wall providedto the Commission a written undertaking never to apply for registrationin any capacity under Ontario securities law and Joan Wall providedto the Commission a written undertaking never to apply for registrationin any capacity under Ontario securities law;

AND UPON reviewing the Settlement Agreementand the Statement of Allegations of Staff of the Commission,and upon hearing submissions from the respondent and from Staffof the Commission;

AND WHEREAS the Commission is of theopinion that it is in the public interest to make this Order;

IT IS ORDERED THAT:

(1) the Settlement Agreement dated June 19,2003, attached to this Order, is hereby approved;

(2) pursuant to clause 2 of subsection 127(1)of the Act, Dual Capital will cease trading securities permanentlyeffective the date of the Order of the Commission approvingthe proposed settlement agreement herein;

(3) pursuant to clause 2 of subsection 127(1)of the Act, Warren Wall will cease trading securities permanentlyeffective the date of the Order of the Commission approvingthe proposed settlement agreement herein, with the sole exceptionthat after one year from the date of the Order approving thissettlement, Warren Wall is permitted to trade securities througha registered dealer for the account of his registered retirementsavings plan (as defined in the Income Tax Act (Canada));

(4) pursuant to clause 2 of subsection 127(1)of the Act, Joan Wall will cease trading securities permanentlyeffective the date of the Order of the Commission approvingthe proposed settlement agreement herein, with the sole exceptionthat after one year from the date of the Order approving thissettlement, Joan Wall is permitted to trade securities througha registered dealer for the account of her registered retirementsavings plan (as defined in the Income Tax Act (Canada));

(5) pursuant to clause 7 of subsection 127(1)of the Act, Warren Wall shall resign his position as an officeror director of any reporting issuer. Further, Warren Wallshall resign his position as an officer or director of anyissuer, save and except any position Warren Wall may holdas an officer or director with an issuer incorporated by himand/or Joan Wall to provide services in the construction industry,which services are solely related to the construction of abusiness or residential premise and construction contractadministration, provided that such issuer remains a privatecompany within the meaning of section 1(1) of the Act anddoes not accept funds from the public. Further, Warren Wallshall resign his position as an officer or director of anyissuer which has an interest directly or indirectly in anyregistrant effective the date of the Order of the Commissionapproving this settlement;

(6) pursuant to clause 7 of subsection 127(1)of the Act, Joan Wall shall resign her position as an officeror director of any reporting issuer. Further, Joan Wall shallresign her position as an officer or director of any issuer,save and except any position Joan Wall may hold as an officeror director with an issuer incorporated by her and/or WarrenWall to provide services in the construction industry, whichservices are solely related to the construction of a businessor residential premise and construction contract administration,provided that such issuer remains a private company withinthe meaning of section 1(1) of the Act and does not acceptfunds from the public. Further, Joan Wall shall resign herposition as an officer or director of any issuer which hasan interest directly or indirectly in any registrant effectivethe date of the Order of the Commission approving this settlement;

(7) pursuant to clause 8 of subsection 127(1)of the Act, Warren Wall is prohibited permanently from becomingor acting as an officer or director of any reporting issuer.Further, Warren Wall is prohibited permanently from becomingor acting as an officer or director of any issuer, save andexcept any position Warren Wall may hold as an officer ordirector with an issuer incorporated by him and/or Joan Wallto provide services in the construction industry, which servicesare solely related to the construction of a business or residentialpremise and construction contract administration, providedthat such issuer remains a private company within the meaningof section 1(1) of the Act and does not accept funds fromthe public. Further, Warren Wall is prohibited from becomingor acting as an officer or director of any issuer which hasan interest directly or indirectly in any registrant effectivethe date of the Order of the Commission approving this settlement;

(8) pursuant to clause 8 of subsection 127(1)of the Act, Joan Wall is prohibited permanently from becomingor acting as an officer or director of any reporting issuer.Further, Joan Wall is prohibited permanently from becomingor acting as an officer or director of any issuer, save andexcept any position Joan Wall may hold as an officer or directorwith an issuer incorporated by her and/or Warren Wall to provideservices in the construction industry, which services aresolely related to the construction of a business or residentialpremise and construction contract administration, providedthat such issuer remains a private company within the meaningof section 1(1) of the Act and does not accept funds fromthe public. Further, Joan Wall is prohibited from becomingor acting as an officer or director of any issuer which hasan interest directly or indirectly in any registrant effectivethe date of the Order of the Commission approving this settlement;

(9) Warren Wall is reprimanded by the Commissionunder clause 6 of subsection 127(1) of the Act;

(10) Joan Wall is reprimanded by the Commissionunder clause 6 of subsection 127(1) of the Act;

June 24, 2003.

"Paul Moore"
"Wendell S. Wigle"

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, C. S.5, AS AMENDED

AND

IN THE MATTER OF

DUAL CAPITAL MANAGEMENT LIMITED,

WARREN LAWRENCE WALL, SHIRLEYJOAN WALL

SETTLEMENT AGREEMENT

I INTRODUCTION

1. By Amended Notice of Hearing dated April30, 2003 (the "Notice of Hearing"), the OntarioSecurities Commission (the "Commission") announcedthat it proposed to hold a hearing to consider whether, pursuantto section 127 of the Securities Act, R.S.O. 1990,c. S.5, as amended (the "Act"), in the opinion ofthe Commission, it is in the public interest for the Commission:

(a) to make an order that the respondentsDual Capital Management Limited ("Dual Capital"),Warren Lawrence Wall ("Warren Wall") and ShirleyJoan Wall ("Joan Wall") cease trading in securities,permanently or for such time as the Commission may direct;

(b) to make an order that any exemptionscontained in Ontario securities law do not apply to therespondents Dual Capital, Warren Wall and Joan Wall or anyof them permanently, or for such period as specified bythe Commission;

(c) to make an order that the respondentsWarren Wall and Joan Wall resign one or more positions thatthe respondents or any of them hold as a director or officerof an issuer;

(d) to make an order that the respondentsWarren Wall and Joan Wall be prohibited from becoming oracting as director or officer of any issuer;

(e) to make an order that the respondentsWarren Wall and Joan Wall be reprimanded;

(f) to make an order that the respondentsDual Capital, Warren Wall and Joan Wall, or any of them,pay the costs of Staff's investigation in relation to thematters subject to this proceeding;

(g) to make an order that the respondentsDual Capital, Warren Wall and Joan Wall, or any of them,pay the costs of this proceeding incurred by or on behalfof the Commission; and/or

(h) to make such other order as the Commissionmay deem appropriate.

II JOINT SETTLEMENT RECOMMENDATION

2. Staff of the Commission ("Staff")agree to recommend settlement of the proceedings initiatedin respect of the respondents by the Notice of Hearing inaccordance with the terms and conditions set out below. Therespondents agree to the settlement on the basis of the factsagreed to as hereinafter provided and the respondents consentto the making of an Order in the form attached as Schedule"A" on the basis of the facts set out below.

3. This settlement agreement, including theattached Schedule "A" (collectively, the "SettlementAgreement"), will be released to the public only if andwhen the settlement is approved by the Commission.

III SETTLEMENT OF FACTS AND CONCLUSIONS

Acknowledgement

4. Staff and the respondents agree with thefacts and conclusions set out in Part III of the SettlementAgreement.

Introduction

5. Dual Capital is incorporated under thelaws of Ontario and since October, 1994, carried on businessas the general partner of Dual Capital Limited Partnership(the "Limited Partnership"). Dual Capital has notbeen registered in any capacity pursuant to section 25(1)of Ontario Securities Act R.S.O. 1990, c.S.5, as amended(the "Act").

6. Warren Wall is an individual residing inOntario and at all material times was the President and adirector of Dual Capital. Warren Wall has not been registeredin any capacity pursuant to section 25(1) of the Act.

7. Joan Wall is an individual residing inOntario, and at all material times was a director and thesecretary/treasurer of Dual Capital. Prior to June 28, 1995,Joan Wall was not registered in any capacity pursuant to section25(1) of the Act. Joan Wall was registered as a salespersonwith Triple A Financial Services Inc. ("Triple A"),a mutual fund dealer and limited market dealer, pursuant tosection 26(1) of the Act from June 28, 1995 to October 13,1998. As at October 20, 1998, Joan Wall was registered asa salesperson with Investment and Tax Counsel Corporation,a mutual fund dealer, and also a limited market dealer (asof May 5, 1999) pursuant to section 26(1) of the Act. JoanWall has not been registered in any capacity since June 30,2000.

Trading Without a Prospectus Contrary tothe Requirements of Ontario Securities Law

8. During the period from October, 1994 toDecember, 1996, the general partner, Dual Capital, acceptedsubscriptions to the Units from investors residing in Ontario.

9. During the material times, the respondents,Dual Capital, Warren Wall, and Joan Wall, traded in securities,namely the Units, where such trading was a distribution ofsuch securities, without having filed a preliminary prospectusand a prospectus and obtaining receipts therefor from theDirector as required by section 53(1) of the Act.

10. The Units were purportedly offered forsale pursuant to the "seed capital" prospectus exemptionset out in section 72(1)(p) of the Act. The requirements ofthe "seed capital" exemption from the prospectusrequirements in Ontario securities law were not satisfied.

11. Further, the Offering Memorandum datedOctober 18, 1994 as amended on December 19, 1994 for the LimitedPartnership (the "Offering Memorandum") was notdelivered to the Commission as required under Ontario securitieslaw. The Offering Memorandum was also not provided to eachinvestor who purchased the Units.

12. In addition, on or about May 27, 1997,Warren Wall, on behalf of the general partner, Dual Capital,filed with the Commission a Form 20 purporting to report atrade under clause 72(1)(p) of the Act. The Form 20 filedwith the Commission did not contain complete and/or accurateinformation as required under Ontario securities law, including,but not limited to, accurate and complete information concerningthe date(s) of the trade(s), the names of the purchaser(s),and the amount or number of securities purchased under theoffering of the Units. In addition, the Form 20 filed statedthat the promoter, DJL Capital Corporation, received $47,233.85as compensation, when in fact DJL Capital Corporation receivedpayments in the amount of approximately U.S. $161,525.00.

Trading in the Units Contrary to Requirementsof Ontario Securities Law

13. Dual Capital and Warren Wall between October13, 1994 and December 4, 1996 traded in securities, namely,limited partnership units of Dual Capital Limited Partnershipwithout being registered to trade in such securities as requiredby section 25(1) of the Act.

14. Joan Wall between October 13, 1994 andJune 27, 1995 traded in securities, namely, limited partnershipunits of Dual Capital Limited Partnership without being registeredto trade in such securities as required by section 25(1) ofthe Act.

Misrepresentations to Investors Contraryto the Public Interest

(i) Use of Proceeds

15. The summary of the Offering Memorandumstates, in part, the following with respect to "Use ofProceeds":

"The net proceeds of this Offering,after deducting the expenses of the issue, are estimatedto be a maximum of $5,000,000.00 and a minimum of $860,000.00.The Limited Partnership will use the net proceeds of thisOffering to facilitate trades in financial instruments,such as bank debentures, thereby providing income to theLimited Partnership."

16. The Offering Memorandum represented thatthe "Trading Partner" (which party is not identifiedin the Offering Memorandum) would seek to provide an annualrate of return to the Limited Partnership and related partiesequal to 30% of the funds placed on deposit. The OfferingMemorandum further represented that the "....foregoingwill be paid on a monthly basis and is subject to the TradingPartner effecting trades."

17. During the material times, Dual Capital,Warren Wall and Joan Wall failed to disclose to investorsthat certain funds accepted from investors for the purchaseof Units were not used to "facilitate trades in financialinstruments", and further failed to disclose that investors'funds instead were used for payments to various companiesand persons, including payments to Dual Capital and/or DualFinancial Group Inc., a company owned by Warren Wall and JoanWall.

(ii) Representations in Promotional Material

18. Further, a brochure (the "Brochure")entitled "International Lending Programme - InvestorInformation" prepared by Warren Wall under the name ofDual Capital, was distributed to investors in furtheranceof the sale of the Units, and made various representationsto investors which were contrary to the public interest. Suchrepresentations to investors included the promise of highannual returns under the heading in the Brochure "HighAnnual Returns .... with Absolutely No Risk" whichrepresentations were misleading to investors and contraryto the public interest.

Conviction of Dual Capital Management Limited,Warren Wall and Joan Wall of Violations of Ontario SecuritiesLaw

19. On October 26, 2000, in a related prosecutionunder section 122 of the Act before the Honourable Mr. JusticeDouglas, Dual Capital, Warren Wall and Joan Wall, enteredpleas of guilty in relation to the following five chargeslaid under section 122 of the Act:

(1) Dual Capital and Warren Wall betweenOctober 13, 1994 and December 4, 1996 traded in securities,namely limited partnership units of Dual Capital LimitedPartnership without being registered to trade in such securitiesas required by section 25(1) of the Act and did therebycommit an offence contrary to section 122(1)(c) of the Act.

(2) Joan Wall between October 13, 1994 andJune 27, 1995 traded in securities, namely, limited partnershipunits of Dual Capital Limited Partnership without beingregistered to trade in such securities as required by section25(1) of the Act and did thereby commit an offence contraryto section 122(c) of the Act.

(3) Warren Wall and Joan Wall between October13, 1994 and December 4, 1996, being a director or officerof Dual Capital Management Limited, did authorize, permitor acquiesce in the offence committed by Dual Capital describedin subparagraph 1 above, and did thereby commit an offencecontrary to section 122(3) of the Act.

(4) Dual Capital, Warren Wall and Joan Wallbetween October 13, 1994 and December 4, 1996 did tradein securities, namely limited partnership units of DualCapital where such trading was a distribution of such securities,without having filed a preliminary prospectus and a prospectusand obtaining receipts therefor from the Director as requiredby section 53(1) of the Act and did thereby commit an offencecontrary to section 122(1)(c) of the Act.

(5) Warren Wall and Joan Wall between October13, 1994 and December 4, 1996, being a director or officerof Dual Capital, did authorize, permit or acquiesce in theoffence committed by Dual Capital described in suparagraph4 above and did commit an offence contrary to section 122(3)of Act.

20. The guilty pleas were entered followingtwelve days of trial, after the prosecutor for the OntarioSecurities Commission had called its witnesses to testifyand closed its case, after the defence had called four witnesses,and during the re-examination of Warren Wall (who had testifiedon his own behalf and been subject to cross examination bythe prosecutor for the Ontario Securities Commission.) Mr.Justice Douglas accepted the pleas, entered convictions andsentenced Warren Wall and Joan Wall to a total of 30 monthsand 22 months, respectively, and Dual Capital to a total fineof $1,000,000.

21. In the course of delivering his Reasonsfor Sentence, Mr. Justice Douglas made findings of fact, basedon the evidence at trial, including the following findings:

(1) The direct loss to the 56 members orso of the public who relied upon the accused persons canbe considered, which (ignoring, for the moment, so-calledrepayments of interest and principal) is something in therange of 1.5 million dollars U.S., or, at a generous currentexchange rate of 66 cents Canadian to the U.S. dollar, approximately$2,265,000.00 Canadian .... It appeared to be the positionof the accused that they did not particularly profit fromthis mis-adventure, but that other more culpable personsdid.

(2) Dealing with the conduct of the accuseduntil January 26th, 1995, during this periodof time, the accused, with others, conceived and formulatedthis investment scheme. They in part documented it, and,importantly, sold it to their clients. In this period oftime they raised $860,000.00 U.S. or 1.3 million dollarsCanadian.

(3) Respecting the conceptualization, formulationand documentation of the investment scheme, Mr. Wall testifiedthat the idea of the investment scheme (referenced undervarious headings, including the "Roll Programme"and the "International Lending Programme") cameto him by way of Dennis Little and D.J.L. Limited, Bob Adams,Mr. Altman of A.A.A. Financial Services, all of which ledto Mr. Poirier and Mr. Adams of Dundas and, ultimately,Mr. Huppe of Oakville.

(4) To varying degrees, Mr. Wall pointedto these gentlemen as being to blame for this fiasco, asthrough counsel, so did Mrs. Wall. I utterly reject thetestimony of Mr. Wall in this regard. The evidence supportsonly the inference of guilty knowledge respecting theseevents on behalf of both Mr. Wall and Mrs. Wall.

(5) I find that the Roll Programme as conceived,was and remained utter nonsense. The programme, consideredin and of itself, is a fraudulent means....

...I find that the Roll Programme wasper se dishonest.

...Indeed, the evidence is conclusiveand nearly complete that all of the investors were neithersophisticated (but naïve), nor rich (but poor) or,at least, dependent upon the little money they had.

(6) Any complete reading of the InvestorLending Programme One or Investor Lending Programme Twowill show the nonsensical nature of the proposal. Undercross-examination, Mr. Wall was forced to admit that manyof the eight representations numbered and contained in eachof these were essentially false throughout the time-frameof the Programme.

(7) Referencing the investment concept provisionsof the two Offering Memoranda leads one to a similar conclusion.I reject utterly that Mr. Wall, a seasoned business man,trained in the arcane of insurance contracts and insuredinvestments, and Mrs. Wall, similarly exposed and trainedand also licensed, at least from June 1995 to sell mutualfunds, did not recognize the significant risks associatedwith the concept, even as it was described in the OfferingMemoranda.

(8) For example, at page five of the FirstOffering Memorandum, under the heading Investment Concept,the following is stated:

"The business of the limited partnershipis to realize profits on trades of financial instrumentssuch as bank debentures and thus provide income for thelimited partners. To this end, the net proceeds of theoffering will be placed through an intermediatory companyon deposit with Canadian or international bank. The tradingcompany; the trading partners will be selected by thegeneral partner will arrange for the purchase and saleby an international bank financial institution or brokeragefirm, the financial institution, a financial instrumentsuch as bank debentures without placing the limited partners'funds at risk. The funds placed on deposit by the limitedpartnership together with funds from other sources willserve as a guarantee to the other contracting party thatthe transactions will be effected. The trading partnerwill seek to provide an annual rate of return to the limitedpartner and related parties equal to 30 percent of theamount of funds placed on deposit by the partnership.The annual rate of return to the limited partners is expectedto be 14 percent. The rate of return ultimately realizedwill be based on the performance of the trading partnerwhich will be on a best efforts basis. The limited partnershipwill not buy or sell financial instruments and it is notexpected that the funds placed on deposit will be useddirectly in such transactions, rather the trading partnerwill seek a potential purchaser of the financial instrument,and at such time as the purchase is confirmed will thenidentify the seller. The limited partnership's funds ondeposit will be combined with funds from other sourcesand serve as a guarantee to the seller that the financialinstitution will be able to effect the purchase. The tradingparty will not arrange for the purchase of a financialinstrument unless the ultimate purchaser has been identifiedand payment effected by that party. The financial institutionwill realize a profit on the transaction based on thespread between the price at which the financial institutionbuys the financial instrument and the price at which itimmediately thereafter sells the financial instrument.A similar process will be followed when the trading partnerfirst identifies a potential seller of the financial instrumentas oposed to a purchase."

(9) I simply reject that Mr. and Mrs. Wallhad any belief in the viability of this scheme based onthis fundamental contradiction between the assertion ofno risk and the assertion of placing these funds on guarantee.

(10) I find that Mr. and Mrs. Wall madea series of misrepresentations designed to mislead investorswith respect to this risk, and indeed to take the risk.

(11) Turning to the sale of the investmentscheme, to sell this scheme, the Investment Lending Programmeand Summaries were prepared either in the Wall's officeor forwarded from there. They were forwarded to clientsand various brokers. No effort was made to screen the investmentso that only sophisticated investors were solicited. Noeffort was made to ensure that only those who could affordsuch significant losses were solicited.

(12) Indeed, the evidence is conclusiveand nearly complete that all of the investors were neithersophisticated (but naive), nor rich (but poor) or, at least,dependent upon the little money they had.

(13) The Walls told some people that theywere themselves investing in this. They were not. Otherswere told to borrow money to invest in this scheme.

(14) As noted above, the Investment LendingProgramme One and Two and Summaries were finally admitted,for the most part, to be misrepresentations.

(15) The short point, here, was that thedocumentation was prepared, either by the Walls or someoneelse, but it was accepted by the Walls, reviewed by theWalls and went out on their letterhead. It went to theirclients. It was prepared, in my view, quite deliberatelyto highlight the selling points. Those selling points werefalse. The Walls knew they were false.

(16) The Programme was not only sold bywritten falsehoods, but also orally, evidence dramaticallypoints to the equal participation of both Warren and JoanWall. Mrs. Wall, on that evidence, perhaps played somewhatof an unique role in convincing people, particularly women,to invest in this programme.

(17) What was the conduct after December17th, 1996, the start of the Ontario Securitiesinvestigation?

(18) Well, there is no doubt that thereis some bad blood between the secretary, Ms. Alderman andthe Walls. I accept her evidence in all essential aspects,notwithstanding the attempts by the Walls, in my view, toseduce, co-op and buy her silence over the years of heremployment.

(19) She told us the truth when she saidthe following. First, that the computer records were deletedto remove them from the grasp of the Ontario SecuritiesCommission. Second, the hard copy records were put intogarbage bags so they could be destroyed. Third, she wastold to lie to the Ontario Securities Commission as to whathappened to those records. And fourth, Exhibit Two(d) wascreated to falsely provide the Ontario Securities Commissionwith the impression there were only 24 investors, and thatthe Walls through D.F. Group had personally invested $440,000.00.

22. The conduct alleged above, and the convictionof the respondents, Dual Capital, Warren Wall and Joan Wallof the offences outlined above, constitutes conduct contraryto sections 25 and 53 of the Act and conduct contrary to thepublic interest.

IV TERMS OF SETTLEMENT

23. The respondents, Dual Capital, WarrenWall and Joan Wall, agree to the following terms of settlement:

(a) pursuant to clause 2 of subsection 127(1)of the Act, Dual Capital will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein;

(b) pursuant to clause 2 of subsection 127(1)of the Act, Warren Wall will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein, with the sole exception that after one year fromthe date of the Order approving this settlement, WarrenWall is permitted to trade securities through a registereddealer for the account of his registered retirement savingsplan (as defined in the Income Tax Act (Canada));

(c) pursuant to clause 2 of subsection 127(1)of the Act, Joan Wall will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein, with the sole exception that after one year fromthe date of the Order approving this settlement, Joan Wallis permitted to trade securities through a registered dealerfor the account of her registered retirement savings plan(as defined in the Income Tax Act (Canada));

(d) Warren Wall undertakes never to applyfor registration in any capacity under Ontario securitieslaw, and agrees to execute the undertaking to the Commissionin the form attached as Schedule "B" to this settlementagreement;

(e) Joan Wall undertakes never to applyfor registration in any capacity under Ontario securitieslaw, and agrees to execute the undertaking to the Commissionin the form attached as Schedule "C" to this settlementagreement;

(f) pursuant to clause 7 of subsection 127(1)of the Act, Warren Wall shall resign his position as anofficer or director of any reporting issuer. Further, WarrenWall shall resign his position as an officer or directorof any issuer, save and except any position Warren Wallmay hold as an officer or director with an issuer incorporatedby him and/or Joan Wall to provide services in the constructionindustry, which services are solely related to the constructionof a business or residential premise and construction contractadministration, provided that such issuer remains a privatecompany within the meaning of section 1(1) of the Act anddoes not accept funds from the public. Further, Warren Wallshall resign his position as an officer or director of anyissuer which has an interest directly or indirectly in anyregistrant effective the date of the Order of the Commissionapproving this settlement;

(g) pursuant to clause 7 of subsection 127(1)of the Act, Joan Wall shall resign her position as an officeror director of any reporting issuer. Further, Joan Wallshall resign her position as an officer or director of anyissuer, save and except any position Joan Wall may holdas an officer or director with an issuer incorporated byher and/or Warren Wall to provide services in the constructionindustry, which services are solely related to the constructionof a business or residential premise and construction contractadministration, provided that such issuer remains a privatecompany within the meaning of section 1(1) of the Act anddoes not accept funds from the public. Further, Joan Wallshall resign her position as an officer or director of anyissuer which has an interest directly or indirectly in anyregistrant effective the date of the Order of the Commissionapproving this settlement;

(h) pursuant to clause 8 of subsection 127(1)of the Act, Warren Wall is prohibited permanently from becomingor acting as an officer or director of any reporting issuer.Further, Warren Wall is prohibited permanently from becomingor acting as an officer or director of any issuer, saveand except any position Warren Wall may hold as an officeror director with an issuer incorporated by him and/or JoanWall to provide services in the construction industry, whichservices are solely related to the construction of a businessor residential premise and construction contract administration,provided that such issuer remains a private company withinthe meaning of section 1(1) of the Act and does not acceptfunds from the public. Further, Warren Wall is prohibitedfrom becoming or acting as an officer or director of anyissuer which has an interest directly or indirectly in anyregistrant effective the date of the Order of the Commissionapproving this settlement;

(i) pursuant to clause 8 of subsection 127(1)of the Act, Joan Wall is prohibited permanently from becomingor acting as an officer or director of any reporting issuer.Further, Joan Wall is prohibited permanently from becomingor acting as an officer or director of any issuer, saveand except any position Joan Wall may hold as an officeror director with an issuer incorporated by her and/or WarrenWall to provide services in the construction industry, whichservices are solely related to the construction of a businessor residential premise and construction contract administration,provided that such issuer remains a private company withinthe meaning of section 1(1) of the Act and does not acceptfunds from the public. Further, Joan Wall is prohibitedfrom becoming or acting as an officer or director of anyissuer has an interest directly or indirectly in any registranteffective the date of the Order of the Commission approvingthis settlement;

(j) Warren Wall agrees to be reprimandedby the Commission under clause 6 of subsection 127(1) ofthe Act;

(k) Joan Wall agrees to be reprimanded bythe Commission under clause 6 of subsection 127(1) of theAct;

(l) Warren Wall will attend, in person,at the hearing before the Commission to consider the proposedsettlement; and

(m) Joan Wall will attend, in person, atthe hearing before the Commission to consider the proposedsettlement.

V STAFF COMMITMENT

24. If this Settlement Agreement is approvedby the Commission, Staff will not initiate any complaint tothe Commission or request the Commission to hold a hearingor issue any other order in respect of any conduct or allegedconduct of the respondents in relation to the facts set outin Part III of this Settlement Agreement.

VI PROCEDURE FOR APPROVAL OF SETTLEMENT

25. The approval of the settlement as setout in the Settlement Agreement shall be sought at a jointpublic hearing held before the Commission in accordance withthe procedures described in this agreement and the Commission'Rules of Practice.

26. If this Settlement Agreement is approvedby the Commission, it will constitute the entirety of theevidence to be submitted respecting the respondents in thismatter and the respondents agree to waive any right to a fullhearing, judicial review or appeal of this matter under theAct.

27. If this Settlement Agreement is approvedby the Commission, the parties to this Settlement Agreementwill not make any public statement that is inconsistent withthis Settlement Agreement.

28. If, for any reason whatsoever, this settlementis not approved by the Commission, or the Order set forthin Schedule "A" is not made by the Commission:

(a) This agreement and all negotiationsleading up to it shall be without prejudice to Staff andthe respondents, and each of Staff and the respondents willbe entitled to proceed to a hearing of the allegations inthe Notices of Hearing and related Statement of Allegationsunaffected by the Settlement Agreement or the settlementnegotiations;

(b) the terms of the Settlement Agreementwill not be raised in any other proceeding or disclosedto any person except with the written consent of Staff andthe respondent or as may be otherwise required by law; and

(c) the respondents agree that they willnot raise in any proceeding the Settlement Agreement orthe negotiation or process of approval thereof as a basisfor any attack on the Commission's jurisdiction, allegedbias, appearance of bias, alleged unfairness or any otherchallenge that may otherwise be available.

29. If, prior to the approval of this SettlementAgreement by the Commission, there are new facts or issuesof substantial concern, in the view of Staff, regarding thefacts set out in Part III of this Settlement Agreement, Staffwill be at liberty to withdraw from this Settlement Agreement.Notice of such intention will be provided to the respondentsin writing. In the event of such notice being given, the provisionsof paragraph 28 in this part will apply as if this SettlementAgreement had not been approved in accordance with the proceduresset out herein.

VII DISCLOSURE OF SETTLEMENT AGREEMENT

30. Staff or the respondents may refer toany part or all of this Settlement Agreement in the courseof the hearing convened to consider this agreement. Otherwise,this Settlement Agreement and its terms will be treated asconfidential by all parties to the Settlement Agreement untilapproved by the Commission, and forever if, for any reasonwhatsoever, this settlement is not approved by the Commission.

31. Any obligation as to confidentiality shallterminate upon the approval of this Settlement Agreement bythe Commission.

VIII EXECUTION OF SETTLEMENT AGREEMENT

32. This Settlement Agreement may be signedin one or more counterparts which together shall constitutea binding agreement and a facsimile copy of any signatureshall be as effective as an original signature.

June 19, 2003.

"Dual Capital Management Limited"
Per: Authorized Signing Officer
 
"Warren Lawrence Wall"
Warren Lawrence Wall
 
Shirley Joan Wall
"Shirley Joan Wall"
 
"Michael Watson"
Staff of the Ontario Securities Commission
Per: Michael Watson

 

SCHEDULE "A"

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF

DUAL CAPITAL MANAGEMENT LIMITED,

WARREN LAWRENCE WALL, SHIRLEYJOAN WALL

 

ORDER

(Sections 127 and 127.1)

WHEREAS on April 30, 2003 the OntarioSecurities Commission (the "Commission") issued anamended Notice of Hearing (the "Notice of Hearing")pursuant to sections 127 and 127.1 of the Securities Act(the "Act") in respect of Dual Capital ManagementLimited ("Dual Capital"), Warren Lawrence Wall ("WarrenWall"), and Shirley Joan Wall ("Joan Wall");

AND WHEREAS the respondents entered intoa settlement agreement dated June , 2003 (the "SettlementAgreement") wherein they agreed to a proposed settlementof the proceedings commenced by the Notice of Hearing, subjectto the approval of the Commission, and wherein Warren Wall providedto the Commission a written undertaking never to apply for registrationin any capacity under Ontario securities law and Joan Wall providedto the Commission a written undertaking never to apply for registrationin any capacity under Ontario securities law;

AND UPON reviewing the Settlement Agreementand the Statement of Allegations of Staff of the Commission,and upon hearing submissions from the respondent and from Staffof the Commission;

AND WHEREAS the Commission is of theopinion that it is in the public interest to make this Order;

IT IS ORDERED THAT:

(1) the Settlement Agreement dated June, 2003,attached to this Order, is herebyapproved;

(2) pursuant to clause 2 of subsection 127(1)of the Act, Dual Capital will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein;

(3) pursuant to clause 2 of subsection 127(1)of the Act, Warren Wall will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein, with the sole exception that after one year from thedate of the Order approving this settlement, Warren Wall ispermitted to trade securities through a registered dealerfor the account of his registered retirement savings plan(as defined in the Income Tax Act (Canada));

(4) pursuant to clause 2 of subsection 127(1)of the Act, Joan Wall will cease trading securities (whichterm includes, for the purpose of this settlement, a purchaseof a security) permanently effective the date of the Orderof the Commission approving the proposed settlement agreementherein, with the sole exception that after one year from thedate of the Order approving this settlement, Joan Wall ispermitted to trade securities through a registered dealerfor the account of her registered retirement savings plan(as defined in the Income Tax Act (Canada));

(5) pursuant to clause 7 of subsection 127(1)of the Act, Warren Wall shall resign his position as an officeror director of any reporting issuer. Further, Warren Wallshall resign his position as an officer or director of anyissuer, save and except any position Warren Wall may holdas an officer or director with an issuer incorporated by himand/or Joan Wall to provide services in the construction industry,which services are solely related to the construction of abusiness or residential premise and construction contractadministration, provided that such issuer remains a privatecompany within the meaning of section 1(1) of the Act anddoes not accept funds from the public. Further, Warren Wallshall resign his position as an officer or director of anyissuer which has an interest directly or indirectly in anyregistrant effective the date of the Order of the Commissionapproving this settlement;

(6) pursuant to clause 7 of subsection 127(1)of the Act, Joan Wall shall resign her position as an officeror director of any reporting issuer. Further, Joan Wall shallresign her position as an officer or director of any issuer,save and except any position Joan Wall may hold as an officeror director with an issuer incorporated by her and/or WarrenWall to provide services in the construction industry, whichservices are solely related to the construction of a businessor residential premise and construction contract administration,provided that such issuer remains a private company withinthe meaning of section 1(1) of the Act and does not acceptfunds from the public. Further, Joan Wall shall resign herposition as an officer or director of any issuer which hasan interest directly or indirectly in any registrant effectivethe date of the Order of the Commission approving this settlement;

(7) pursuant to clause 8 of subsection 127(1)of the Act, Warren Wall is prohibited permanently from becomingor acting as an officer or director of any reporting issuer.Further, Warren Wall is prohibited permanently from becomingor acting as an officer or director of any issuer, save andexcept any position Warren Wall may hold as an officer ordirector with an issuer incorporated by him and/or Joan Wallto provide services in the construction industry, which servicesare solely related to the construction of a business or residentialpremise and construction contract administration, providedthat such issuer remains a private company within the meaningof section 1(1) of the Act and does not accept funds fromthe public. Further, Warren Wall is prohibited from becomingor acting as an officer or director of any issuer has an interestdirectly or indirectly in any registrant effective the dateof the Order of the Commission approving this settlement;

(8) pursuant to clause 8 of subsection 127(1)of the Act, Joan Wall is prohibited permanently from becomingor acting as an officer or director of any reporting issuer.Further, Joan Wall is prohibited permanently from becomingor acting as an officer or director of any issuer, save andexcept any position Joan Wall may hold as an officer or directorwith an issuer incorporated by her and/or Warren Wall to provideservices in the construction industry, which services aresolely related to the construction of a business or residentialpremise and construction contract administration, providedthat such issuer remains a private company within the meaningof section 1(1) of the Act and does not accept funds fromthe public. Further, Joan Wall is prohibited from becomingor acting as an officer or director of any issuer has an interestdirectly or indirectly in any registrant effective the dateof the Order of the Commission approving this settlement;

(9) Warren Wall is reprimanded by the Commissionunder clause 6 of subsection 127(1) of the Act;

(10) Joan Wall is reprimanded by the Commissionunder clause 6 of subsection 127(1) of the Act;

June 24, 2003.

________________________

________________________

 

SCHEDULE "B"

IN THE MATTER OF

DUAL CAPITAL MANAGEMENT LIMITED,

WARREN LAWRENCE WALL, SHIRLEYJOAN WALL

UNDERTAKING TO THE

ONTARIO SECURITIES COMMISSION

I, Warren Lawrence Wall, am a Respondent toan Amended Notice of Hearing dated April 30, 2003 issued bythe Ontario Securities Commission. I undertake to the OntarioSecurities Commission that I will never apply for registrationin any capacity under Ontario securities law. I have agreedto this term of the settlement between Staff of the Commissionand me dated June, 2003.

________________________

Witness:

Date:
June
, 2003

________________________

Warren Lawrence Wall

Date:
June
, 2003

Acknowledgement as Received by,

_________________________
John Stevenson
the Secretary to the
Ontario Securities Commission
Date:
, 2003

 

SCHEDULE "C"

IN THE MATTER OF

DUAL CAPITAL MANAGEMENT LIMITED,

WARREN LAWRENCE WALL, SHIRLEYJOAN WALL

UNDERTAKING TO THE

ONTARIO SECURITIES COMMISSION

I, Shirley Joan Wall, am a Respondent to anAmended Notice of Hearing dated April 30, 2003 issued by theOntario Securities Commission. I undertake to the Ontario SecuritiesCommission that I will never apply for registration in any capacityunder Ontario securities law. I have agreed to this term ofthe settlement between Staff of the Commission and me datedJune , 2003.

________________________

Witness:

Date:
June
, 2003

_________________________

Shirley Joan Wall

Date:
June
, 2003

Acknowledgement as Received by,

________________________
John Stevenson
the Secretary to the
Ontario Securities Commission
Date:
, 2003