Settlements

RICHARD CHARLES HARRIS, III et. al. [Sec. 161 & Settlement Agrmt.]

BCSECCOM #:
Document Type:
Sec. 161 & Settlement Agrmt.
Published Date:
2000-06-30
Effective Date:
2000-06-27
Details:


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

AND

IN THE MATTER OF RICHARD CHARLES HARRIS, III
AND ANA VICTORIA JIMENEZ (A.K.A. ANA HARRIS)

Order Under Section 161


1. WHEREAS a Settlement Agreement was executed by Richard Charles Harris, III (“Harris”) and Ana Victoria Jimenez (a.ka. Ana Harris) (“Jimenez”), collectively (the “Respondents”) and the Executive Director, a copy of which is attached hereto as Schedule “A”.

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, the exemptions described in sections 44 - 47, 74, 75, 98 or 99 of the Act do not apply to the Respondents;

      2.2 under section 161(1)(d) of the Act, the Respondents are prohibited from becoming or acting as a director or officer of any issuer; and

      2.3 under section 161(1)(d) of the Act, the Respondents are prohibited from engaging in investor relations activities;
      for a period of 10 years from the date of the Order.


DATED at Vancouver, British Columbia, on June 27, 2000.






Steve Wilson
Executive Director



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

AND

IN THE MATTER OF RICHARD CHARLES HARRIS, III
AND ANA VICTORIA JIMENEZ (A.K.A. ANA HARRIS)


Settlement Agreement

1. The following settlement of issues has been reached between Richard Charles Harris, III (“Harris”) and Ana Victoria Jimenez (aka Ana Harris) (“Jimenez”), collectively (the “Respondents”) and the Executive Director.

Agreed Statement of Facts

2. As the basis for the undertakings and orders referred to in paragraphs 3 and 4 of this settlement, Harris and Jimenez acknowledge the following facts as correct:
      2.1 The Respondents are resident in Costa Rica. Jimenez is the mother of Harris.
      2.2 Harris is a former principal of Harris McLean Financial Group Ltd. (“Harris McLean”). Harris McLean, now in liquidation, carried on business as an investment firm with offices in the Cayman Islands.
      2.3 During 1997, the Respondents traded in securities in British Columbia through accounts at several brokerage firms, including Georgia Pacific Securities Corporation (“Georgia Pacific”).
      2.4 On October 1, 1997, the Commission issued directions to freeze property in several brokerage accounts, including accounts at Georgia Pacific (the “Georgia Pacific Freeze Order”), relating to heavy trading in the shares of
          H&R Enterprises, Inc. (“H&R”) the previous week. The Georgia Pacific Freeze Order attached cash and securities in several accounts at Georgia Pacific in the name of Harris McLean and one account in the name of Jimenez (the “Jimenez Account”).
      2.5 Based upon staff’s initial review of the Jimenez Account documents during the period between May to September 1997, it appears that:
          2.5.1 the Jimenez Account received large blocks of shares of H&R in the name of initial seed capital shareholders;
          2.5.2 the Jimenez Account received from the Harris McLean accounts at Georgia Pacific, transfers of shares of H&R and large amounts of cash, which amounts were then immediately wired out of the Jimenez Account to a bank account in the name of Jimenez in the Cayman Islands;
          2.5.3 the shares of H&R which were sold to produce the cash frozen in the Jimenez Account were transferred into the Jimenez Account from another Harris McLean account at Georgia Pacific on September 8, 1997; and
          2.5.4 from September 23 to 25, 1997, the Jimenez account sold some 200,000 shares of H&R at prices between $3.00 USD and $6.56 USD.

2.6 Harris McLean and Jimenez applied for variation of the Georgia Pacific Freeze Order and a hearing was held before the Commission on October 2, 1997 (the “Variation Hearing”). At the Variation Hearing, Harris testified on behalf of Harris McLean and counsel for Harris McLean tendered an affidavit and supporting documents from Jimenez. In its Decision issued October 8, 1997, the Commission denied the application.
      2.7 The testimony and documentary evidence tendered by Harris and Jimenez at the Variation Hearing contained misrepresentations with respect to the nature of a real estate transaction purportedly entered into by Jimenez in the Cayman Islands (the “Cayman Island Transaction”).
      2.8 With respect to the Cayman Island Transaction, Harris and Jimenez, through an affidavit, made the following representations (the “Representations”), which were untrue and were misrepresentations:
          2.8.1 Jimenez was the purchaser and Pan Am Development (“Pan Am”), owned by a Japanese group (the “Japanese Group”) was the vendor;
      2.8.2 the purchase price was $885,000 USD;
          2.8.3 Jimenez paid a $75,000 USD deposit which would be lost if the deal did not close;
          2.8.4 the closing for the Cayman Island Transaction was set for October 3, 1997 at 3:00 p.m. Cayman Island time;
          2.8.5 the property which was the subject of the Cayman Island Property had a market value in excess of the agreed upon purchase price; and

          2.8.6 the Japanese Group had purportedly agreed on or about September 25, 1997, to enter into the Cayman Island Transaction with Jimenez upon preferential terms because they knew and liked her.
      2.9 In fact, none of the Representations were true, to Harris’s and Jimenez’s knowledge. The Representations were made in order to induce the Commission to vary the Georgia Pacific Freeze Order.

      2.10 In a statement made to Commission staff and the Royal Canadian Mounted Police on September 9, 1998, Harris admitted that he and Jimenez had made the Representations set out in paragraph 2.8 and that they were untrue.

      2.11 By making the Representations to the Commission, both Harris and Jimenez contravened section 155(1)(a) of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”) (as unamended), and acted contrary to the public interest.

      2.12 Subsequently, in a letter to the Commission dated October 6, 1997, Jimenez claimed that the existence of the Georgia Pacific Freeze Order caused her to lose the Cayman Island Transaction and her deposit, which was a misrepresentation and a breach of section 155(1)(a) of the Act (as unamended).

Penalty Considerations

3. The Executive Director would impose a significant monetary sanction in this case, but for the liquidation, subsequent to the events recorded here, of Harris McLean, resulting in severe adverse financial consequences to each of the Respondents and their inability to pay a penalty.

Undertaking

4. Harris and Jimenez undertake to comply fully with the Act and the Securities Rules, B.C. Reg. 195/97, and any applicable regulations, policies and guidelines.

Order

5. Harris and Jimenez consent to an order by the Executive Director (the “Order”) that:
      5.1 under section 161(1)(c) of the Act, the exemptions described in sections 44 - 47, 74, 75, 98 or 99 of the Act do not apply to the Respondents;

      5.2 under section 161(1)(d) of the Act, the Respondents are prohibited from becoming or acting as a director or officer of any issuer; and

      5.3 under section 161(1)(d) of the Act, the Respondents are prohibited from engaging in investor relations activities;

      for a period of 10 years from the date of the Order.

Waiver

6. Harris and Jimenez waive any right each of them 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 Escazu, Costa Rica, on 26 June, 2000.

“Jose Alberto Castro” )
Witness Signature )
Jose Alberto Castro )
Witness Name (please print) )
Apartado 507 - 1250 ) “Ana V. Jimenez”
955424, Costa Rica ) Ana Victoria Jimenez
Address ) (aka Ana Harris)
Retired )
Occupation )

      DATED at Escazu, Costa Rica, on 26 June, 2000.

“Jose Alberto Castro” )
Witness Signature )
Jose Alberto Castro )
Witness Name (please print) )
Apartado 507 - 1250 ) “Richard C. Harris”
955424, Costa Rica ) Richard Charles Harris, III
Address )
Retired )
Occupation )


DATED at Vancouver, British Columbia, on June 20, 2000.




Steve Wilson
Executive Director
©2024 British Columbia Securities Commission