Settlements

EDWARD JOHN PLUMACHER [Sec. 161 & Agreed Stmt]

BCSECCOM #:
Document Type:
Sec. 161 & Agreed Stmt
Published Date:
1998-01-30
Effective Date:
1998-01-26
Details:


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

AND

IN THE MATTER OF EDWARD JOHN PLUMACHER


Order Under Section 161


WHEREAS an Agreed Statement of Facts and Undertaking (the “Agreement”) was executed by Edward John Plumacher (“Plumacher”) and the Executive Director, a copy of which is attached hereto as Schedule "A";

NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders (the “Order”), BY CONSENT, that

1. under section 161(1)(c) of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”), the exemptions in sections 45 to 47, 74, 75, 98 or 99 of the Act do not apply to Plumacher for a period of eight years from the date of this Order;

2. under section 161(1)(d) of the Act, Plumacher be prohibited from becoming or acting as a director or officer of any reporting issuer, or of any issuer that provides management, consulting or administrative services to a reporting issuer, until such time as:
      (a) Plumacher has successfully completed a course of study satisfactory to the Executive Director concerning the duties of directors and officers of reporting issuers;

      (b) Plumacher has made full payment of the amount set out in paragraph three of the Agreement; and

      (c) eight years have elapsed since the date of this Order; and
3. under section 161(1)(d)(iii) of the Act, Plumacher be prohibited from engaging in investor relations activities for a period of eight years from the date of this Order.

DATED at Vancouver, British Columbia, on January 26, 1998.






Michael J. Watson
A/Executive Director



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

AND

IN THE MATTER OF EDWARD JOHN PLUMACHER


Agreed Statement of Facts and Undertaking


The following agreement has been reached between Edward John Plumacher (“Plumacher”) and the Executive Director:

1. As the basis for the order and undertakings referred to below, Plumacher acknowledges the following facts as correct:
      (a) Plumacher, a resident of the United States, was registered as a broker in the United States from May 1987 to January 1992;

      Insider Reporting

      (b) on or about July 24, 1992, Plumacher became a director, officer and insider of Questec Imaging Inc. (then SZL Sportsight Inc., “Questec”) and remained an insider of Questec until May 30, 1997. At all material times, Questec was a reporting issuer whose common shares were listed and posted for trading on the Vancouver Stock Exchange;

      (c) Plumacher was required to file, on or before August 3, 1992, an initial insider report disclosing any direct or indirect beneficial ownership of, or control or direction over, securities of Questec. Plumacher failed to file the initial insider report until February 29, 1996, in breach of section 87(2) of the Securities Act, R.S.B.C. 1996, c. 418 (then section 70(2) of the Securities Act, S.B.C. 1985, c. 83, the “Prior Act”);

      (d) Plumacher’s holdings of securities of Questec changed during the period from August 1, 1992 to January 1996 (the “Subsequent Insider Period”). Plumacher failed to file, within 10 days of the month end, insider reports disclosing changes, during the Subsequent Insider Period, in his direct or indirect beneficial ownership of, or control or direction over, securities of Questec, in breach of section 87(4) of the Act (section 70(4) of the Prior Act);

      (e) on or about February 29, 1996, Plumacher bulk filed with the British Columbia Securities Commission (the “Commission”) 32 insider reports relating to changes in his holdings of securities of Questec during the three and one-half year Subsequent Insider Period. The reports disclosed a total of 158 sales by Plumacher of 1,044,409 shares of Questec for gross proceeds of $647,402.34, an average of $0.62 per share. The reports disclosed a total of 54 purchases by Plumacher of 2,369,543 shares of Questec for gross proceeds of $930,866.25, an average of $0.39 per share);

      (f) by letter to Plumacher dated March 5, 1996, staff of the Commission reminded Plumacher of his insider report filing obligations and assessed a late filing fee of $1,600 for the reports filed by Plumacher relating to changes in his holdings of securities of Questec for the Subsequent Insider Period;

      (g) Plumacher’s holdings of securities of Questec changed during September 1996 but he failed to file the required insider report relating to those changes until November 11, 1996, in breach of section 87 of the Act. A late filing fee was assessed against Plumacher relating to this report which remained outstanding until the date of this agreement;

      (h) Plumacher’s holdings of securities of Questec changed during December 1996 but he failed to file the required insider report relating to those changes until January 14, 1997, in breach of section 87 of the Act. A late filing fee was assessed against Plumacher relating to this report which remained outstanding until the date of this agreement;

      (i) on November 3, 1997, charges were laid against Plumacher pursuant to section 155 of the Act (section 138 of the Prior Act) containing 34 counts of failure to file insider reports contrary to section 87 of the Act (section 70 of the Prior Act);

      AMEX Disciplinary Proceeding

      (j) on or about August 4, 1994, a disciplinary proceeding was commenced by the American Stock Exchange (“AMEX”), a self-regulatory organization, against Plumacher relating to numerous breaches of the AMEX Constitution and Rules and of the Securities Exchange Act of 1934 (the “AMEX Breaches”), which occurred while Plumacher was a broker at Shearson Lehman Brothers, Inc., a member organization of AMEX;

      (k) the AMEX Breaches alleged against Plumacher included:
          (i) changing client addresses to Plumacher’s own address to conceal trades done by Plumacher in the client’s account without the client’s knowledge or consent;

          (ii) falsifying financial information on client Options New Account Forms in order to have accounts approved for options trading;

          (iii) effecting options trades in client accounts not approved for such trading and, in other cases, effecting options trades which were inappropriate for the client;

          (iv) effecting unauthorized stock and options trading in client accounts;

          (v) effecting options transactions on margin contrary to the client’s explicit instructions not to do so; and

          (vi) churning in client accounts;
      (l) on or about August 4, 1992 AMEX mailed to Plumacher by regular and certified mail to 1400 Boston Avenue, Bay Shore, New York (the “Service Address”), a copy of the Statement of Charges relating to the AMEX Breaches. The envelope containing the Statement of Charges was signed for by an “E. Plumacher” on August 15, 1994;

      (m) a hearing relating to the Statement of Charges was convened by a disciplinary panel of AMEX. Plumacher was informed of the hearing date by regular and certified mail delivered to the Service Address but Plumacher did not attend the hearing;

      (n) on or about December 2, 1994, the AMEX panel issued written reasons relating to the hearing. The AMEX panel found that Plumacher had committed all of the breaches set out in the Statement of Charges. The AMEX panel issued a censure against Plumacher and imposed a permanent bar upon him from employment or association, in any capacity, with an AMEX member or member organization. A copy of the written reasons was mailed to Plumacher at the Service Address;

      (o) on or about March 4, 1996, Plumacher filed with the Commission a Form 4B as a director of Questec, sworn by him on December 29, 1995 in Vancouver, British Columbia. The Form 4B contained the following responses by Plumacher:
          (i) under question 6 relating to residential history, Plumacher indicated that he resided at the Service Address from December 1985 to December 1995, a period of time which covered the AMEX proceedings described above; and

          (ii) in answer to question 9B of the Form 4B “Have you been reprimanded, suspended, fined or otherwise disciplined, in any jurisdiction, by a self-regulatory organization?”, Plumacher answered “no”.
      (p) when Plumacher swore and filed the Form 4B, he ought to have known that the AMEX disciplinary proceeding should have been disclosed in the Form 4B and Plumacher’s failure to do so amounted to a misrepresentation in a record required to be filed with the Commission, contrary to section 155(1)(c) of the Act.
2. Plumacher consents to an order (the “Order”) by the Executive Director that:
      (a) under section 161(1)(c) of the Act, the exemptions in sections 45 to 47, 74, 75, 98 or 99 of the Act do not apply to Plumacher for a period of eight years from the date of the Order;

      (b) under section 161(1)(d) of the Act, Plumacher be prohibited from becoming or acting as a director or officer of any reporting issuer, or of any issuer that provides management, consulting or administrative services to a reporting issuer, until such time as:
          (i) Plumacher has successfully completed a course of study satisfactory to the Executive Director concerning the duties of directors and officers of reporting issuers;

          (ii) Plumacher has made full payment of the amount set out in paragraph three of this agreement; and

          (iii) eight years have elapsed since the date of the Order; and
      (c) under section 161(1)(d)(iii) of the Act, Plumacher be prohibited from engaging in investor relations activities for a period of eight years from the date of the Order.
3. Plumacher undertakes and agrees to pay to the Commission the sum of $5,000 upon execution of this agreement.

4. Plumacher 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.

DATED at Deer Park, N.Y. , on January 23, 1998. 4:30 PM EST




Michael W. Russo_____________)
Witness Signature)
Michael W. Russo_____________)
Witness Name (Please print))
4 Cutter Ct.W Islip NY__________)________________________
Address)Edward John Plumacher
President_____________________)
Occupation)

DATED at Vancouver, British Columbia, on January 26, 1998.





Michael J. Watson
A/Executive Director