Paul K. Bates

The Ontario Securities Commission approved a settlement agreement with the respondent.

The respondent acknowledged engaging in insider trading contrary to s. 76(1) of the Securities Act, failing to file required insider reports under s. 107, and failing to correct a Management Information Circular that incorrectly stated his share ownership.

The Commission found the sanctions, which included a reprimand, fairly reflected the gravity of the conduct and approved the settlement as being in the public interest.

The Ontario Securities Commission approved a settlement agreement with Mark Edward Valentine, former chair of Thompson Kernaghan & Co. Valentine pleaded guilty to securities fraud in the US and admitted to creating a culture of conflict of interest and noncompliance in Ontario.

The Commission found the settlement, which included a permanent director/officer ban, a 15-year cease-trade order, termination of registration, and a $100,000 costs payment, to be in the public interest.

The Ontario Securities Commission held a hearing regarding a former branch manager at a registered dealer.

The respondent was alleged to have provided inaccurate 'Proof of Funds' letters to a client to facilitate a high-yield investment program.

The letters misrepresented the funds in the accounts, falsely stated funds would be held, and attested to the legitimacy of funds without due diligence.

The respondent did not attend the hearing.

The Commission found the respondent's conduct contrary to the public interest, noting his failure in his gatekeeper role as a registrant and branch manager.

The respondent's registration was terminated for 10 years, he was permanently banned from supervisory roles, reprimanded, and ordered to pay $126,938.50 in costs.

Following his criminal conviction for insider trading, the Ontario Securities Commission held a hearing to determine whether to impose public interest sanctions against the respondent under s. 127 of the Securities Act.

The respondent, while an officer and director of a reporting issuer, had sold shares with knowledge of undisclosed material negative assay results, avoiding significant losses.

The Commission found his conduct egregious and a breach of fiduciary duty.

To protect the capital markets, the Commission ordered a 15-year cease trade order and a 15-year ban on acting as a director or officer of any reporting issuer, with limited carve-outs for personal trading.

The applicant, a group retirement plan administrator registered as a mutual fund dealer and portfolio manager, sought an exemption from the requirement to become a member of the Mutual Funds Dealers Association (MFDA).

The applicant argued its business model, which included discretionary trading, was incompatible with MFDA rules and that restructuring would be costly and confusing to clients.

The Commission denied the exemption, emphasizing that investor protection and the benefits of MFDA oversight outweighed the administrative and financial burdens of restructuring.

A temporary exemption was granted to allow the applicant time to apply for MFDA membership.

Staff of the Ontario Securities Commission sought to extend a temporary order suspending the respondent's registration and cease trading his securities pending a hearing on the merits.

The respondent did not oppose the registration suspension but sought to vary the cease trade order to allow trading in NASDAQ and over-the-counter markets.

The Commission found that the existing permissible trading areas covered a substantial proportion of North American securities and declined to expand them.

The temporary order was extended on its existing terms until July 31, 2004, or the commencement of the hearing.

The Staff of the Investment Dealers Association of Canada applied for a hearing and review of a District Council decision regarding a registered representative who traded for a client attempting to manipulate the market price of a security.

The District Council had dismissed the allegation that the respondent facilitated the business of an unregistered entity and imposed a penalty without a fine or disgorgement.

The Ontario Securities Commission found that the District Council misapprehended the evidence of facilitation and the public interest in strong sanctions for willful market manipulation.

The Commission set aside the dismissal, imposed a fine of $128,504.55 (including disgorgement of commissions), and suspended the respondent's approval for seven years.