Settlements
BRADLEY D. SMITHSON [Sec. 161 & Settlement Agrmnt]
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BCSECCOM #:
2001 BCSECCOM 335, 2001 BCSECCOM 334
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Document Type:
Sec. 161 & Settlement Agrmnt
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Published Date:
2001-03-21
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Effective Date:
2001-03-20
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Details:
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2001 BCSECCOM 335
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF BRADLEY D. SMITHSON
Order Under Section 161
[para 1]
1. WHEREAS a Settlement Agreement was executed by Bradley D. Smithson ("Smithson"), and the Executive Director, a copy of which is attached hereto as Schedule "A" (the "Agreement");
[para 2]
2. NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders, BY CONSENT (the "Order"), that:
2.1 under section 161(1)(c) of the Act, with the exception of the exercising of warrants held by the Insider, which expire on September 12, 2001, the exemptions described in sections 44 to 47, 74, 75, 98 and 99 do not apply to the Insider in connection with any trading on his own account until the later of:
2.1.1 one year from the date of the Order signed by the Executive Director; and
2.1.2 the date the Insider completes and passes the Securities Program offered by Simon Fraser University through its Applied Business Program, which consists of the Going Public and Continuous Disclosure courses.
DATED at Vancouver, British Columbia, on March 20, 2001.
Executive Director
2001 BCSECCOM 334
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF BRADLEY D. SMITHSON
Settlement Agreement
[para 1]
1. The following agreement has been reached between Bradley D. Smithson (the “Insider” and the Executive Director:
Agreed Statement of Facts
[para 2]
2. As the basis for the order and undertakings set out below, the Insider acknowledges the following facts as correct:
2.1 During the period from December 1988 to present, the Insider has been a director and the president of Pacific Insight Electronics Corp. (“Pacific Insight”, a reporting issuer under the Securities Act, R.S.B.C. 1996, c. 418 (the “Act” since February 18, 1987.
2.2 Pacific Insight has its head office in Nelson, British Columbia and, from December 1988 to November 1999, its securities were listed and posted for trading on the Vancouver Stock Exchange and, since November 1999, on the Canadian Venture Exchange (the “CDNX”.
2.3 The Insider was aware of his obligations to file insider reports under section 87 of the Act, as between December 1988 and January 1995 he filed the required reports with the British Columbia Securities Commission (the "Commission".
2.4 During the period of February 1995 through April 2000 (the “Material Period”, the Insider made changes in his direct or indirect beneficial ownership of, or control or direction over, securities of Pacific Insight as follows:
2.4.1 held or acquired 199,600 options, of which 130,000 were exercised during the Material Period;
2.4.2 acquired 30,000 common shares from treasury;
2.4.3 acquired 30,000 warrants;
2.4.4 acquired or disposed of 271,937 common shares through the facilities of the CDNX (the “Market Transactions”;
(collectively the “Transactions”, and failed to file insider reports in respect of the Transactions as required under section 87 of the Act.
2.5 The Market Transactions consisted of a total of 48 transactions during 24 months of the Material Period.
2.6 The Market Transactions represented approximately 5.19% of the trading on the CDNX in shares of Pacific Insight in the 24 months of the Material Period in which the Insider traded, and approximately $566,000 in value.
2.7 In each of 7 months during the 24 months of the Material Period, the Market Transactions in the month represented 5% or more of the trading in shares in Pacific Insight on the CDNX, and, in each of 4 months represented 10% to 21% of the trading. The Insider's trading accounted for 0% and 5% of the trading of shares in Pacific Insight on the CDNX during 55 months of the Material Period.
2.8 Trading in shares in Pacific Insight during the 24-Month Period totaled over 5.2 million shares.
[para 3]
3. The Insider bulk filed 25 insider reports on June 5, 2000, and paid the applicable late filing fees in the amount of $1,250 on June 23, 2000.
Mitigating Factors
[para 4]
4. The Executive Director has taken into account the following facts as factors mitigating the sanctions which would otherwise have applied in the public interest:
4.1 The Insider has no previous disciplinary history with the Commission.
4.2 The Insider voluntarily brought his failure to file insider reports disclosing the Transactions to staff's attention, and has cooperated fully with staff during the investigation of this matter.
4.3 The Insider co-founded Pacific Insight in 1985, and has been its president and a director since its incorporation. The Insider is an integral part of the day-to-day operation and management of Pacific Insight, and his knowledge of the technical and sales aspects of the business makes his input as a director and officer critical for management and strategic planning decisions and ongoing customer relations.
4.4 The Insider's shareholdings were disclosed to shareholders and the public in Pacific Insight's Annual Information Circulars.
Order
[para 5]
5. In respect of the Insider’s failure to disclose the Transactions in compliance with section 87 of the Act, the Insider consents to an order of the Executive Director (the “Order” that:
5.1 under section 161(1(c of the Act, with the exception of the exercising of warrants held by the Insider, which expire on September 12, 2001, the exemptions described in sections 44 to 47, 74, 75, 98 and 99 do not apply to the Insider in connection with any trading on his own account until the later of:
5.1.1 one year from the date of the Order signed by the Executive Director; and
5.1.2 the date the Insider completes and passes the Securities Program offered by Simon Fraser University through its Applied Business Program, which consists of the Going Public and Continuous Disclosure courses.
Undertaking
[para 6]
6. The Insider undertakes to pay $7,500 to the Commission, $3,000 of which represents a contribution towards the costs of the investigation.
[para 7]
7. The Insider undertakes to comply with the requirements of the Act, the Securities Rules, B.C. Reg. 194/97 and all applicable regulations, policies and guidelines, from the date of this agreement.
Waiver
[para 8]
8. The Insider 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 the Order.
DATED at Nelson, British Columbia on February 7, 2001.
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Witness Signature
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Witness Name (Please Print
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Bradley D. Smithson
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Address__________________________
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Occupation
DATED at Vancouver, British Columbia, on March 20, 2001.
Steve Wilson
Executive Director