News Release

Vancouver – In a settlement, TD Securities Inc. paid the British Columbia Securities Commission $50,000 for acting contrary to the public interest.

In March 1996, Grafton Global Management Ltd. made client investments through TD Securities when about 90 Grafton Global clients invested over $4-million into Valley Mortgage and Investment Company Ltd.

TD Securities failed to ensure that Grafton Global properly completed the documentation for the investments. Then, TD Securities provided account statements to investors that referred to the investments as “TD mortgages” which may have given investors a false sense of security about the safety of their investments. In 1999, mortgages underlying the Valley investments were in default, but despite this, TD Securities continued to list the value of the investments at the purchase price in the client statements.

In March 1997, TD Securities purchased Grafton Global and George Melvin Grafton joined TD Securities. In the following months, seven of Grafton’s clients invested $450,000 in Valley. The investments may not have been suitable for some of the clients.

In the settlement, it is acknowledged that TD Securities voluntarily settled with the investors and revised its compliance procedures.

In a notice of hearing issued March 2002, the BCSC made allegations against George Grafton, Grafton Global and Valley related to this matter. The hearing starts in March of next year.

The BCSC is an independent provincial government agency responsible for regulating trading in securities within the province. You can view the settlement on our website www.bcsc.bc.ca. If you have questions, please telephone Andrew Poon, Media Relations, 604-899-6880.