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  • Securities Commission Issues Orders in Connection with Vancouver Boiler Room Securities Commission Issues Orders in Connection with Vancouver Boiler Room
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News Release

Securities Commission Issues Orders in Connection with Vancouver Boiler Room Securities Commission Issues Orders in Connection with Vancouver Boiler Room

  • Date:

    1997-10-24

  • Number:

    97/33

Released: October 22, 1997  Contact: Barbara Barry  660-4800 or (BC only) 1-800-373-6393

Vancouver -- The B.C. Securities Commission has imposed a $50,000 fine on Barry Sher Gill for operating a boiler room that solicited members of the public to purchase shares of Ambra Royalty, Inc., a company quoted on the NASDAQ OTC Bulletin Board. The Commission also prohibited Gill from trading securities, from being a director or officer of any company and from engaging in investor relations activities for 25 years.

Three other people involved in the Ambra boiler room - Adrienne Tuijthof, Gordon Charles Chappell and James Calvin Letendre - were fined amounts ranging from $25,000 to $30,000 and were prohibited from trading securities, from being directors or officers of any company and from engaging in investor relations activities for periods ranging from 12 to 15 years.

The Commission decision was issued on October 22, 1997, following a 21 day hearing that concluded in March of this year. In its decision, the Commission said:

Gill orchestrated and closely supervised a boiler room of great scope and sophistication. In the first six months of 1995, there were 4,900 calls to Ambra’s 1-800 telephone number, of which 2,600 calls completed. During the same period, Ambra employees and, on occasion, Gill himself placed over 15,000 long distance calls to people throughout North America in an effort to promote purchases of Ambra shares; more than 2,600 of these calls were over two minutes in length. It is impossible to determine how many local calls were made. Also during the first six months of 1995, Gill organized a number of promotional efforts respecting Ambra, including the issuance of enthusiastic press releases, mailouts of Stockdeck cards, a radio show appearance, and the insertion of advertisements in a financial publication.

These efforts appear to have been to some effect. Trading in Ambra shares almost doubled from 597,000 shares in January to 1,066,800 shares in February 1995 and continued to increase over the following months, peaking at 6,718,408 shares in May. During this period, ten brokerage accounts over which Gill had trading authority were net sellers of over 2,000,000 Ambra shares. Over 1,000,000 of these shares were sold during May, the month in which Ambra’s trading volume and share price was its highest. Of the $205,029.25 withdrawn from these accounts during this period, $124,689.01 was given to Ambra; the remaining $80,340.24 was retained by Gill.

The Commission found that Gill traded in securities and acted as an adviser without being registered, contrary to the Securities Act.

Tuijthof was Gill’s trusted second in command in the running of the Ambra boiler room. She was a net seller of over 478,000 shares during the first six months of 1995, from which she derived $32,944. The Commission found that Tuijthof traded in securities without being registered, contrary to the Securities Act.

Chappell and Letendre were two of the employees who cold called members of the public to solicit purchases of Ambra shares. The Commission found that both Chappell and Letendre traded in securities without being registered, and that Chappell called people at their residences to trade in Ambra shares, all of which is contrary to the Securities Act.

The Commission found that the Ambra boiler room operated in blatant disregard of the registration requirements of the Act and said:
Both the courts and the Commission have recognized in several decisions that the Act is aimed at regulating the capital markets and protecting the public. A cornerstone of the regulatory structure established by the Act is the requirement that people advising and trading in securities on behalf of others be registered. This is intended to ensure that the investing public receives expert advice from competent and ethical people, whose activities are governed by a comprehensive set of rules and subject to regulatory scrutiny.

The British Columbia Securities Commission is the independent provincial government agency responsible for regulation of securities and exchange contracts in the province.

Copies of the Commission decision (46 pages) may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.