News Release

Vancouver – The British Columbia Securities Commission has dismissed an application to increase the penalties imposed on a former registered representative who was disciplined for selling “off-book” investment products.

Investment Dealers Association staff applied for a hearing and review of a penalty decision made by an IDA district council hearing panel on Aug. 19, 2003 against Robert Peter Gawthrop, who admitted to violating IDA rules and his employer’s policy by selling (and accepting a fee for selling) securities without the knowledge or approval of his employer.

Gawthrop, who is no longer employed in the securities industry, was registered to sell securities at Dundee Securities between May and August 2001, when he referred clients to deal directly with Qwest Emerging Biotech (VCC) Fund Ltd. In total, nine clients invested $235,000 with Qwest and Gawthrop received a 10 per cent commission from Qwest for the referrals.

Dundee fired Gawthrop for his actions and an IDA district council hearing panel fined him $5,000, ordered disgorgement of $7,500 and costs of $3,500 after conducting a hearing.

In its application to the commission, IDA staff argued for an increase in the penalties imposed on Gawthrop, saying that the IDA panel proceeded on incorrect principles and failed to protect the public interest.

The commission noted that it does not generally interfere with a decision from a self-regulatory organization like the IDA unless it has made an error in law, it has overlooked material evidence, new evidence is presented, or the commission takes a different view of the public interest. Quoting an earlier decision, the commission emphasized that its power to intervene in an IDA hearing panel decision “should be used sparingly to deal with circumstances where the decision has clearly failed to protect the public interest, and not to simply impose our own view where we might have a difference of opinion.”

The commission dismissed the IDA staff application to increase the penalties imposed on Gawthrop after it concluded, “we cannot say that the hearing panel’s decision … is clearly wrong or that it clearly failed to protect the public interest.”

The B.C. Securities Commission is an independent provincial government agency responsible for regulating trading in securities within the province. The decision can be accessed through the commission’s website www.bcsc.bc.ca or by contacting Andrew Poon, Media Relations, 604-899-6880.