News Release

Vancouver -- The B.C. Securities Commission has found that an Abbotsford-based company made misrepresentations in soliciting more than $1.3-million from B.C. investors for a proposed private, surgical hospital in suburban Coquitlam.

In a decision released today, the BCSC ruled that Specialized Surgical Services Inc. made misrepresentations in two offering memorandums used to raise $1,332,000 from investors. The misrepresentations included failure to:
· Include facts that could affect the price of the securities being sold
· Include updated financial statements that called into question the company’s ability to operate as a going concern
· Disclose conflicts of interest
· Mention changes in the company’s directors and officers, and
· Provide information about pending litigation against the property by mortgage holder.

The commission panel found that two of Specialized Surgical’s directors -- James Swanney and David Steinart -- breached their duties as directors by permitting the company to make the misrepresentations.

“It is the responsibility of the directors, all the directors, to ensure that a company complies with applicable regulatory requirements,” said the panel. “There is no evidence before us that Swanney or Steinart made any attempt to put in place adequate systems to ensure compliance with the regulatory requirements relating to Specialized Surgical’s offering memorandums.”

The commission also found that Swanney perpetrated a fraud on Rosalind Collins, one of the investors in the company: He assisted in a transaction in which Steinart thought he was selling his shares at $0.15 while Collins bought them for $1.00.

The panel concluded that Swanney acted dishonestly.

“He kept critical information about the transaction from both Steinart and Collins, as well as lying about his understanding of what had transpired in his subsequent letter to Steinart,” said the panel. “We are also of the view that Collins suffered deprivation as a result of the transaction. She paid $50,000 for shares that were worth only $7,500 at the time.”

The commission settled with several respondents prior to the hearing.

The commission will hear further submissions before issuing orders.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the province. Copies of the decision can be viewed in the documents database of the commission’s website www.bcsc.bc.ca or by contacting Andrew Poon, Media Relations, 604-899-6880.