BCSC

Settlements

MICHAEL PAUL OLSEN, et. al. [Sec. 161 & Agreed Stmnt.]

BCSECCOM #:	Document Type: Sec. 161 & Agreed Stmnt.
Published Date: 1999-11-26	Effective Date: 1999-11-22
Details:

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

AND

MICHAEL PAUL OLSEN, 3538397 CANADA LTD.
(DOING BUSINESS AS WEALTH MANAGEMENT GROUP) and
OLSEN FINANCIAL CONSULTANTS inc

Order Under Section 161

1. WHEREAS an Agreed Statement of Facts and Undertaking was executed by Michael Paul Olsen (“Olsen”), 3538397 Canada Ltd. (“3538397”), Olsen Financial Consultants Inc. (“OFCI”) and the Executive Director, a copy of which is attached hereto as Schedule “A” (the “Agreement”);

2. NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders, BY CONSENT, that:

2.1 under section 161(1)(c) of the

Act

, none of the exemptions described in sections 44 to 47, 74, 75, 98 and 99 of the

Act

apply to Olsen acting directly, or indirectly through another person, company, or trust acting on his behalf, until

2.1.1 10 years after the date of the Order if the Rescission Offer is made within eighteen months of the Order, or

2.1.2 15 years after the date of the Order if the Rescission Offer is not made within eighteen months of the Order,

except that Olsen may trade in securities through one RRSP and one non-RRSP account in his own name with one broker or dealer. Olsen undertakes to keep the Executive Director advised at all times of the location of these accounts;

2.2 under section 161(1)(d) of the

Act

, Olsen is prohibited from engaging in investor relations activities in British Columbia until

2.2.1 10 years after the date of the Order if the Rescission Offer is made within eighteen months of the Order, or

2.2.2 15 years after the date of the Order if the Rescission Offer is not made within eighteen months of the Order; and

2.3 under section 161(1)(d) of the

Act

, Olsen will resign forthwith from any position that he holds as a director or officer of any issuer in British Columbia and is prohibited from becoming or acting as a director or officer of any issuer in British Columbia, except that Olsen may act as a director or officer of OFCI and 3538397 solely for the purpose of effecting the Rescission Offer, or for any transaction ancillary to the Rescission Offer which shall be approved by the Executive Director, until the later of:

2.3.1 successfully completing a course of study satisfactory to the Executive Director concerning the duties and responsibilities of directors and officers;

2.3.2 10 years after the date of the Order if the Rescission Offer is made within eighteen months of the Order, or

2.3.3 15 years after the date of the Order if the Rescission Offer is not made within eighteen months of the Order.

2.4 under section 161(1)(c) of the

Act

, that the exemptions described in sections 44 to 47, 74, 75, 98 and 99 of the

Act

are permanently not available to OFCI and 3538397, and that therefore, OFCI and 3538397 are permanently prohibited from trading in securities in the Province of British Columbia, except to the extent OFCI and 3538397 are required to trade in their own securities to facilitate the completion of the Rescission Offer;

DATED at Vancouver, British Columbia, on November 22, 1999.

Steve Wilson
Executive Director

Schedule “A”

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

AND

MICHAEL PAUL OLSEN, 3538397 CANADA LTD.
(DOING BUSINESS AS WEALTH MANAGEMENT GROUP) and
OLSEN FINANCIAL CONSULTANTS inc.

Agreed Statement of Facts and Undertaking

The following agreement has been reached between Michael Paul Olsen (“Olsen”), Olsen Financial Consultants Inc. (“OFCI”), 3538397 Canada Ltd. (doing business as Wealth Management Group) (“3538397”) and the Executive Director:

1. As the basis for the orders referred to below, Olsen, OFCI and 3538397 acknowledge the following facts as correct:

1.1 Olsen is a resident of British Columbia. From February 10, 1987 until April 27, 1998 Olsen held the following registrations pursuant to the

Securities Act

, R.S.B.C. 1996, c. 418 (the “

Act

”):

1.1.1 from February 10, 1987, until February 13, 1990, as a salesman (restricted to mutual funds) with Ascot Financial Services Limited;

1.1.2 from March 7, 1990 to January 9, 1991, as a salesman (restricted to mutual funds) with F.P.C. Investments Inc.;

1.1.3 from August 6, 1991 to June 10, 1993, as a salesman (restricted to mutual funds) with Regal Capital Planners Ltd.;

1.1.4 from July 8, 1993 to October 6, 1997, as a salesman (restricted to mutual funds) with Vantage Securities Inc. ("Vantage");

1.1.5 from October 6, 1997 to April 27, 1998 as a salesman (restricted to trading in securities, other than forward contracts) with Vantage;

1.2 3538397 is incorporated under the laws of Canada. 3538397 carried on or intended to carry on business as “Wealth Management Group”. 3538397 is not a reporting issuer in British Columbia;

1.3 Olsen is the sole director and officer of 3538397 and the directing mind of 3538397;

1.4 OFCI was incorporated under the laws of British Columbia on December 18, 1995, as 510294 B.C. Ltd. OFCI is not a reporting issuer under the

Act

;

1.5 Olsen is the President, Secretary and sole director of OFCI and is the directing mind of OFCI;

1.6 Instant Vision Inc. (“Instant Vision”) is apparently incorporated in the State of Delaware, U.S.A. Instant Vision is not a reporting issuer under the

Act

;

1.7 Talkstar, Inc. (“Talkstar”) was incorporated in the State of Nevada, U.S.A., on May 16, 1997, as MBP Technologies, Inc. Talkstar is not a reporting issuer under the

Act

;

1.8 In April, 1998,Olsen's registration as an employee of Vantage was terminated when Vantage's registration was cancelled;

Distributions of the OFCI Bond

1.9 While employed by Vantage and registered under the

Act

Olsen sold an investment referred to as the “OFCI Bond” (the “Bond”) to 14 residents of British Columbia;

1.10 Olsen, as the directing mind of OFCI, caused OFCI to make a distribution of the Bond;

1.11 Olsen sought and obtained the consent of Vantage to the sale of the Bond to clients of Vantage;

1.12 Olsen and OFCI raised approximately $288,000.00 into OFCI through sales of the Bond to clients of Vantage for whose accounts he had responsibility, and to former clients of Vantage once his registration had been terminated;

1.13 The Bond provided for a 14% interest payment per annum and further provided that the bond would mature as to one half of the principal amount on December 31, 1999 and as to the remaining half of the principal amount on December 31, 2000;

1.14 Olsen gave subscribers to the Bond a personal guarantee in the event OFCI failed to honour the terms of the Bond;

1.15 funds raised as proceeds of the distribution of the Bond were pooled with the income of Olsen and used for, among other things, management/executive compensation to Olsen, marketing expenses (radio, TV, seminars), operating expenses (payroll for staff, utilities) and rent;

1.16 the expenses of OFCI exceeded the funds raised from the distribution and the surplus or additional expenses were funded by Olsen;

1.17 Olsen obtained legal advice on exemptions available from the registration and prospectus requirements of the

Act

under sections 46(j) and 75;

1.18 the distribution of the Bond was made by OFCI when Olsen and OFCI knew or ought to have known that the applicable exemptions from the prospectus and registration requirements did not apply in respect of all investors to whom the distribution was made, which distribution was contrary to sections 34 and 61 of the

Act

;

1.19 after the collapse of Vantage, the main source of OFCI’s income, OFCI failed to perform is obligations with respect to the Bond in connection with the payment of interest

Conversions of the Bond into Shares in 3538397

1.20 in or about October, 1998, after his registration was terminated, Olsen presented purchasers of the Bond with a Conversion and Subscription Agreement (the “Agreement”), which some investors executed;

1.21 the Agreement entitled holders of OFCI Bonds to convert their investment in OFCI into shares of 3538397. The Agreement, which Olsen recommended some purchasers execute, had the effect of converting the purchaser’s holdings of the Bond into preferred shares in 3538397 and further eliminated Olsen’s personal guarantee;

1.22 Olsen obtained legal advice on exemptions available from the registration and prospectus requirements of the

Act

under sections 46(j) and 75;

1.23 the Agreement effected a distribution of the securities of 3538397 by 3538397 when Olsen and 3538397 knew or ought to have known that the applicable exemptions from the prospectus and registration requirements did not apply in respect of all investors to whom the distribution was made, which distribution was contrary to sections 34 and 61 of the

Act

;

Distributions of Shares of 3538397

1.24 in or about November, 1998, after his registration was terminated, Olsen sold shares in 3538397 and caused 3538397 to distribute these securities to residents of British Columbia. Olsen and 3538397 sold the securities of 3538397 in reliance upon the exemptions from the registration and prospectus requirements in sections 89(a) and 89(b) and sections 128(a) and 128(b) of the

Rules.

Certain investors were provided an Offering Memorandum;

1.25 Olsen and 3538397 raised approximately $120,000.00 into 3538397 through the sales of securities of 3538397 to former clients of Vantage once Olsen’s registration had been terminated;

1.26 Olsen obtained legal advice on exemptions available from the registration and prospectus requirements under sections 89(a) and (b) and sections 128(a) and 128(b) of the

Rules

;

1.27 the sale of the securities of 3538397 effected a distribution of the securities of 3538397 by 3538397 when Olsen and 3538397 knew or ought to have known that the applicable exemptions from the prospectus and registration requirements did not apply in respect of all investors to whom the distribution was made, which distribution was contrary to sections 34 and 61 of the

Act

;

Distributions of Instant Vision Debentures

1.28 while Olsen was registered as an employee of Vantage, he sold “Series B Debentures” of Instant Vision, a product approved by Vantage;

1.29 in May and June 1998, after Olsen’s registration as an employee of Vantage was terminated, he continued to sell Series B Debentures by directing investors to the directors and officers of Instant Vision who provided investors with an Offering Memorandum;

1.30 the sale of other Series B Debentures by Olsen took place in the presence of Olsen and a director and officer of Instant Vision and purported to rely on an exemption from the registration and prospectus requirements;

1.31 the sales of the Series B Debentures amounted to trading in securities of Instant Vision by Olsen when Olsen knew or ought to have known that the applicable exemptions from the registration and prospectus requirements did not apply in respect of all investors to whom the distribution was made, contrary to sections 34 and 61 of the

Act

;

Distributions of Securities of Talkstar

1.32 in early September 1998, after Olsen’s registration as an employee of Vantage Securities Inc. was terminated, Olsen sold shares of Talkstar;

1.33 the sales of the shares of Talkstar amounted to trading in securities of Talkstar by Olsen when he was not registered to do so and without an exemption from the registration and prospectus requirements, contrary to sections 34 and 61 of the

Act

;

1.34 Talkstar investors received rescission of their investment;

Acting as an Adviser

1.35 Olsen acted as an adviser without registration as an adviser under the

Act

at the time he sold the shares in 3538397, Instant Vision debentures and Talkstar shares to certain investors, and when he recommended to certain investors that they convert the Bond into shares of 3538397, contrary to section 34(1)(c) of the

Act

;

Unsuitable Investment Advice

1.36 during the period when he was a registered representative employed by Vantage, Olsen recommended that his clients purchase, among other investments, securities of risky or speculative ventures, although they had been approved by Vantage, such that some of his clients had an unsuitably high percentage of such holdings in their portfolios;

1.37 in some instances Olsen recommended borrowing or leveraging strategies that were unsuitable given the investment needs and objectives of the client;

1.38 the investments by Olsen’s clients in risky or speculative ventures resulted in the receipt by Olsen of commissions that were higher than the commissions he would have received had his clients been sold less risky investments;

1.39 Olsen failed to advise of the unsuitability of a proposed purchase for the client, when he made the recommendations as described in paragraphs 1.36 and 1.37, which was contrary to section 48(2) of the

Securities Rules

, B.C. Reg. 196/97 (the “

Rules

”) although he discussed the risks of the proposed investments with some clients; and

1.40 by advising his clients to purchase these investments, Olsen did not deal fairly, honestly and in good faith with his clients, contrary to section 14 of the

Rules

2. Olsen has co-operated with Staff of the Commission.

3. OFCI and 3538397 undertake to offer each of the British Columbia investors in OFCI and 3538397 a right of rescission with respect to the distributions made by OFCI and 3538397 (the “Rescission Offer”) on the following conditions:

3.1 OFCI and 3538397 shall deliver a plan of rescission (the "Rescission Plan") to Commission Staff providing the details of the offer of rescission, acceptable to Commission Staff;

3.2 OFCI and 3538397 shall deliver to each investor in British Columbia a copy of this settlement agreement along with a letter approved by Commission Staff setting out an offer to rescind that investor’s investment and to receive a full refund of the amount paid, and stating that the offer of rescission shall remain in effect for a period of thirty (30) days from the date the letter is received;

3.3 OFCI and 3538397 shall seek the consent of each investor to release the investor's name, address and telephone number to the Commission for the purpose of tracking the Rescission Offer;

3.4 the process of offering rescission shall be conducted through counsel for OFCI and 3538397;

3.5 OFCI and 3538397 shall complete the Rescission Offer within eighteen months of the date of the Order referred to in section 4 herein; and

3.6 if OFCI and 3538397 require an extension of the time for completion of the Rescission Offer, an application may be made to the Commission no later than sixteen months after the date of this agreement;

4. Olsen, consents to an order by the Executive Director (the “Order”) that:

4.1 under section 161(1)(c) of the

Act

, none of the exemptions described in sections 44 to 47, 74, 75, 98 and 99 of the

Act

apply to Olsen acting directly, or indirectly through another person, company, or trust acting on his behalf, until

4.1.1 10 years after the date of the Order if the Rescission Offer is made within eighteen months of the Order, or

4.1.2 15 years after the date of the Order if the Rescission Offer is not made within eighteen months of the Order,

4.2 under section 161(1)(d) of the

Act

, Olsen is prohibited from engaging in investor relations activities in British Columbia until

4.2.1 10 years after the date of the Order if the Rescission Offer is made within eighteen months of the Order, or

4.2.2 15 years after the date of the Order if the Rescission Offer is not made within eighteen months of the Order; and

4.3 under section 161(1)(d) of the

Act

4.3.1 successfully completing a course of study satisfactory to the Executive Director concerning the duties and responsibilities of directors and officers;

4.3.2 10 years after the date of the Order if the Rescission Offer is made within eighteen months of the Order, or

4.3.3 15 years after the date of the Order if the Rescission Offer is not made within eighteen months of the Order.

5. OFCI and 3538397 agree to an order by the Executive Director (the “Order”) under section 161(1)(c) of the Act, that the exemptions described in sections 44 to 47, 74, 75, 98 and 99 of the Act are permanently not available to OFCI and 3538397, and that therefore, OFCI and 3538397 are permanently prohibited from trading in securities in the Province of British Columbia, except to the extent OFCI and 3538397 are required to trade in their own securities to facilitate the completion of the Rescission Offer;

6. Olsen, OFCI and 3538397 undertake to comply fully with all the provisions of the Act and the Rules from the date of this agreement;

7. Olsen undertakes to and agrees to pay to the Commission the sum of $10,000 towards costs and a $10,000 penalty, which have been calculated to allow the Rescission Offer to investors to proceed. The payment shall be made in accordance with the following schedule:

7.1 a monthly payment of $250, of which $125 shall be applied to costs and $125 to penalty, payable on the first day of every month commencing on December 1, 1999; and

7.2 in the event the Offer of Rescission is made, the entire amount remaining with respect to costs will be immediately due and payable and no amount remaining with respect to penalty will be payable; and

7.3 on the terms set out in a Promissory Note executed by Olsen in favour of the Commission.

8. Olsen, OFCI and 3538397 waive any right they 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 Vancouver, British Columbia, on November 22, 1999.

___________________________ )
Witness Signature )
Alan Costin____________________ )
Witness Name ) MICHAEL PAUL OLSEN
200 – 865 Hornby_______________ )
Vancouver BC__________________ )
Address )
Investigator____________________ )
Occupation )

DATED at Vancouver, British Columbia, on November 22, 1999.

Michael P. Olsen )
I have the authority to bind the ) OLSEN FINANCIAL CONSULTANTS
Corporation ) INC.

DATED at Vancouver, British Columbia, on November 22, 1999.

Michael P. Olsen )
I have the authority to bind the ) 3538397 CANADA LTD.
Corporation )

DATED at Vancouver, British Columbia, on November 22, 1999.

Steve Wilson
Executive Director