Settlements

FREDERICK MAURICE NESBITT [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 FREDERICK MAURICE NESBITT


Order Under Section 161

WHEREAS an Agreed Statement of Facts and Undertaking was executed by Frederick Maurice Nesbitt (“Nesbitt”) 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:

1. 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 Nesbitt for a period ending on the later of:

      1.1 the date Nesbitt satisfies his obligation to pay the sum of $7,500 as described in paragraph 4 of the Agreement, including any accrued interest; and

      1.2 one year from the date of this order;
        save that Nesbitt may rely on the exemption set out at section 45(2)(7) of the Act.


    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 FREDERICK MAURICE NESBITT


    Agreed Statement of Facts and Undertaking

    The following agreement has been reached between Frederick Maurice Nesbitt (“Nesbitt”) and the Executive Director:

    1. As the basis for the orders and undertakings referred to below, Nesbitt 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 Nesbitt (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 that 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 the 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 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 first 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 Fred Nesbitt

        1.14 Nesbitt first became involved with TACL in December 1996, when he was approached by Denis Mouillierat who was involved with TACL in Alberta;

        1.15 Nesbitt began to work for TACL as a provincial vice president for British Columbia in or about February, 1997. In or about March, 1997, Nesbitt became the Canadian vice president for TACL and in May, 1997, he became the international vice president for TACL;

        1.16 Nesbitt’s role in each of his three capacities as vice president for TACL involved recruiting and training investment consultants to promote TACL;

        1.17 when Nesbitt became Canadian vice president in March, 1997, David Vaughn became the provincial vice president for British Columbia for TACL;

        1.18 Nesbitt’s titles as vice president did not give him any decision-making powers in TACL, but rather simply enabled him to oversee other investment consultants and offer him a different commission structure as vice-president;

        1.19 Nesbitt worked at the offices of TACL in Nassau, Bahamas, from April 1997, through September 1997;

        1.20 from May 1997, through September 1997, Craig Southwood (“Southwood”) was the president of TACL and was in charge of TACL;

        1.21 Nesbitt states that Southwood decided the rates of return to be given to IBCs of investors which invested in the bank debenture trading program;

        1.22 Nesbitt advised investment consultants and vice-presidents of TACL to advertise returns of 40% over a period of 45 days pursuant to the bank debenture trading program of TACL;

        1.23 Nesbitt personally sold IBCs to less than 10 people. Nesbitt’s role was more limited to management of district vice presidents. Nesbitt approved and appointed approximately 10 to 15 people as district vice presidents of TACL;

        1.24 Nesbitt believes he was entitled to a trailer commission on the returns to be earned by those below him in the organization;

        1.25 Nesbitt was paid a portion of the commissions owed him, in the amount of at least $10,000;

        1.26 Nesbitt is 68 years old and is retired. Nesbitt has not been previously sanctioned by the British Columbia Securities Commission; and

        1.27 Nesbitt’s involvement with TACL constituted trading in securities in the Province of British Columbia. These trades were distributions as they were trades in securities not previously issued to the public. As Nesbitt was not registered, and as no prospectus or preliminary prospectus regarding the securities had been filed with the Commission and receipts obtained for them, and as no exemptions were available for the trades, the actions of Nesbitt were contrary to sections 34 and 61 of the Act.
    2. Nesbitt consents to an order by the Executive Director (the “Order”) that:
        2.1 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 Nesbitt for a period ending on the later of:
            2.1.1 the date Nesbitt satisfies his obligation in paragraph 4 below, including any accrued interest; and

            2.1.2 three years from the date of the Order;
        save that Nesbitt is entitled to rely on the exemption set out at section 45(2)(7) of the Act;
      3. Nesbitt undertakes to comply with the Act and the Securities Rules, B.C. Reg. 194/97 and all applicable regulations, policies and guidelines.

      4. Nesbitt undertakes to pay the Commission the sum of $7,500 consisting of $2,000 in investigation costs and $5,500 in administrative penalty on the following payment schedule:
          4.1 $2,500 by March 31, 1999;
          4.2 $2,500 by May 31, 1999; and
          4.3 $2,500 by July 31, 1999;
          and on the terms set out in a Promissory Note executed by Nesbitt in favour of the Commission.

      5. Nesbitt 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 12, 1999.



      Olava J. Nesbitt___________)
      Witness Name (please print))
      )
      “Olava Nesbitt”___________)“Frederick Maurice Nesbitt”
      Witness Signature)
      13927 115A Ave_________)
      Surrey, BC_____________)
      Address)
      Homemaker_____________)
      Occupation)

      DATED at Vancouver, British Columbia, on February 12, 1999.





      Michael J. Watson
      Executive Director
      ©2024 British Columbia Securities Commission