News Release

Released: 10/16/00 Contact: Dean Pelkey
NR #00-44 (604) 899-6880 or
(BC only) 1-800-373-6393 Vancouver -- A British Columbia Securities Commission panel has levied $50,000 in penalties against the former president of Quinto Mining Corporation and his wife in connection with a 1993 distribution of shares.

The commission panel also banned Paul and Betty Schiller from the capital market for 15 years and ordered them to pay the costs of the commission hearing.

Paul Schiller was president and a director of Quinto Mining Corporation while his wife, Betty, was the office manager in 1993 when they orchestrated a distribution by Quinto of 150,000 units, each consisting of one share and one share purchase warrant.

The distribution was structured to make it appear that the units were distributed to Betty Schiller. In fact, the shares, including the shares issued on the exercise of the warrants, ended up in the hands of a number of investors in Ontario and the United States.

In an earlier decision issued July 17, the panel found the Schillers contravened the registration and prospectus requirements of the Securities Act through their involvement in the distribution. The Schillers acted contrary to the public interest by filing documents with the commission and the Vancouver Stock Exchange that showed Betty Schiller, rather than the investors, to be the purchaser of the units, the commission said.

“Securities legislation is designed to strike a balance between protecting investors and facilitating the raising of capital by companies. It provides various exemptions from the registration and prospectus requirements that permit junior companies like Quinto to raise capital from sophisticated investors or persons connected to the company or its principals, like Betty Schiller, on the basis that these persons do not need certain of the protections afforded by the legislation,” the panel said in assessing sanctions.

“The Schillers tried to characterize Quinto’s issuance of the 150,000 units as a distribution to Betty Schiller so they would not have to comply with the legislative requirements associated with a distribution to the investors. As a result, the investors lost the protection they would have received had they dealt through a registrant and received a prospectus.”

The commission also found that Paul Schiller acted contrary to the public interest in exchanging his own free trading Quinto shares for half of the restricted shares held by the investors, thus enabling them to do an end run around the 12-month hold period attached to the shares.

When the 150,000 warrants were exercised in 1994, Betty Schiller kept a number of shares that were supposed to have been given to one of the investors. When that investor threatened the Schillers with legal action, the Schillers had Quinto issue a cheque to him for an amount slightly less than he had claimed.

The commission panel said that Betty Schiller perpetrated a fraud on the investor and both Schillers perpetrated a fraud on Quinto by their involvement in this transaction.

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 Media Relations Officer Dean Pelkey at 899-6880.