Settlements

MICHAEL JAMES SHAW [Sec. 161 & Agreed Stmt]

BCSECCOM #:
Document Type:
Sec. 161 & Agreed Stmt
Published Date:
1999-02-26
Effective Date:
1999-02-16
Details:


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF MICHAEL JAMES SHAW


Order Under Section 161

WHEREAS an Agreed Statement of Facts and Undertaking was executed by Michael James Shaw (“Shaw”) and the Executive Director, a copy of which is attached hereto as Schedule “A” (the “Agreement”):

NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders, by consent, that under section 161(1)(c) of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”), all of the exemptions described in sections 44-47, 74, 75, 98 and 99 of the Act do not apply to Shaw for a period one year from the date of this order.

    DATED at Vancouver, British Columbia, on February 16, 1999.




    Michael J. Watson
    Executive Director






    Schedule “A”
    IN THE MATTER OF THE SECURITIES ACT
    R.S.B.C. 1996, c. 418

    AND

    IN THE MATTER OF MICHAEL JAMES SHAW


    Agreed Statement of Facts and Undertaking

    The following agreement has been reached between Michael James Shaw (“Shaw”) and the Executive Director:

    1. As the basis for the orders and undertakings referred to below, Shaw acknowledges the following facts as correct:
        TAC Investment Program
        1.1 TAC International Limited (“TACL”) is a company incorporated pursuant to the laws of the Commonwealth of the Bahamas;

        1.2 TACL does not have an office in British Columbia and is not a reporting issuer in British Columbia;

        1.3 TACL is not registered to carry on business in British Columbia;

        1.4 TACL is not registered pursuant to section 34 of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”);

        1.5 between August 1996 and August 1997, TACL developed a network of investment consultants who acted as sales persons in British Columbia;

        1.6 TACL, through investment consultants, including Shaw (as described below), promoted an investment program in British Columbia which involved trading in bank debentures or instruments which required an investor to incorporate an international business corporation (“IBC”);

        1.7 TACL would facilitate an investor incorporating an IBC at a cost of $1,500 (US). TACL would then loan $1,500 (US) to the investor’s IBC which money was then purportedly pooled by TACL with the money of other investors in order to invest in a bank debenture trading program;

        1.8 investors were told:
            1.8.1 the $1,500 (US) loan from TACL was to be repaid in 12 months;

            1.8.2 the loan was interest free and, further, the loan was to be repaid through profits generated through the investment in bank debentures; and

            1.8.3 TACL advised investors that the loan would not be repayable if the investment in the bank debenture trading program failed;

        1.9 participation in the bank debenture trading program offered by TACL to investors in British Columbia is trading in a security as that term is defined in section 1 of the Act;

        1.10 TACL represented to investors that returns on the investment of $1,500 (US) would be 40% in the forty-five (45) days after investment and 60% in every forty-five (45) day period thereafter;

        1.11 investment consultants were to earn a commission for recruiting other investors, which was 30% of the initial IBC fee of $1,500 (US) and commission on any profit generated by the investor’s IBC through trading in the bank debenture trading program;

        1.12 TACL developed a network of regional, provincial, national and international vice presidents who were individuals to whom investment consultants reported;

        1.13 during the time of the operation of its investment program in British Columbia, TACL recruited approximately 171 investors in British Columbia and raised at least $256,000 (US) from investors in British Columbia;

        Role of Michael Shaw

        1.14 Shaw became involved with TACL in or about August 1996;

        1.15 Shaw became TACL’s vice president for British Columbia in or about August 1996. Shaw remained the vice president for B.C. until in or about November 1996;

        1.16 as vice president for British Columbia for TACL, Shaw’s job was to recruit individuals as investment consultants, rather than to sell IBCs to investors;

        1.17 Shaw’s title as vice president did not give him any decision-making powers in TACL, rather he was to oversee other investment consultants, and gave him a different commission structure as vice president;

        1.18 Shaw did not personally purchase an IBC through TACL;

        1.19 during his employment with TACL, Shaw was never paid any commissions or salary;

        1.20 Shaw is not now, nor has he ever been, registered to trade in securities under the Act;

        1.21 Shaw’s actions as a vice president of TACL in recruiting investment consultants were actions in furtherance of the trading in securities effected when those investment consultants sold securities to members of the public. As Shaw was not registered and as the securities had not been qualified by a prospectus and no exemptions were available for the trades, Shaw contravened sections 34 and 61 of the Act;

        Current Financial Situation

        1.22 Shaw filed an Assignment in Bankruptcy on September 16, 1998, and is currently bankrupt. At the time he filed for bankruptcy, Shaw claimed total assets of $1,350 and total liabilities of $50,525; and

        1.23 Shaw is presently unemployed and his sole source of income is social assistance and family allowance for a total income of $1,096 per month. With this amount Shaw is supporting his wife and child;
    2. Shaw consents to an order by the Executive Director (the “Order”) that under section 161(1)(c) of the Act, any or all of the exemptions described in sections 44-47, 74, 75, 98 or 99 of the Act do not apply to Shaw for a period of one year from the date of the Order.

    3. Shaw undertakes to comply with the Act and the Securities Rules, B.C. Reg. 194/97 and all applicable regulations, policies and guidelines.

    4. Shaw waives any right he may have, under the Act or otherwise, to a hearing, hearing and review, judicial review or appeal related to, in connection with or incidental to this agreement and any related orders.


    DATED at Vancouver, British Columbia, on February 11, 1999.



    Patrick Robitaille__________)
    Witness Name (please print))
    )
    “Patrick Robitaille”_________)“Michael James Shaw”
    Witness Signature)
    200 - 865 Hornby Street____)
    Vancouver, BC V6Z 2H4___)
    Address)
    Barrister & Solicitor________)
    Occupation)
    DATED at Vancouver, British Columbia, on February 12, 1999.





    Michael J. Watson
    Executive Director