News Release

Vancouver – A Vancouver investment adviser will resign his registration and pay the B.C. Securities Commission $53,500 after admitting he ought to have known about a stock manipulation.

Under the settlement, Bradley Nixon Scharfe, an employee of Canaccord Capital Corp., will resign his adviser registration by May 31, 2004. He cannot apply for registration for at least two years and until he has passed a course satisfactory to the BCSC Executive Director. He also cannot be a director or officer or engage in investor relations for any reporting issuer during the two-year ban, unless he provides the issuer with a copy of the settlement agreement.

Of the money Scharfe agreed to pay, $43,500 represents commissions he earned in 1996 and 1997 from trading accounts for Clay-Tech Industries Inc and H & R Enterprises, Inc., which traded on the former Alberta Stock Exchange and the Over the Counter Bulletin Board (OTCBB) respectively.

Scharfe admitted he breached the securities rules by failing to make sufficient enquires about the identity of his clients. Their accounts traded in shares of Clay-Tech and H&R and were nominee accounts for Michael Lee Mitton. Mitton was banned in 1988 from securities markets for 20 years for Securities Act violations including insider trading and has a lengthy record for fraud and other criminal offences.

In the same period, Scharfe was adviser for six accounts that made more than 100 undeclared short sales between Jan. 1, 1996 and Feb. 14, 1996. In a 2001 settlement with the Canadian Venture Exchange for the undeclared short sales, Scharfe paid a $25,000 fine, disgorged $57,500 in commissions and paid investigative costs of $5,000. (Short selling is a speculative practice in which an investor borrows a security and sells it in the belief that the price of the security will fall and he or she will be able to buy it back later at a lower price thereby making a profit. It is a violation of the Securities Act to not declare a short sale when the order is placed.)

The Executive Director said he took into account the exchange settlement and that Scharfe said he had received advice from his brokerage firm about his ability to talk to Mitton and acted within the scope of that advice. The Executive Director also noted the accounts were only active for a short time.

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 settlement 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.