Settlements
LAURIE ANN ONISHENKO [Sec. 161 & Settlement Agrmnt.]
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BCSECCOM #:
2001 BCSECCOM 606, 2001 BCSECCOM 608
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Document Type:
Sec. 161 & Settlement Agrmnt.
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Published Date:
2001-06-08
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Effective Date:
2001-05-14
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Details:
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2001 BCSECCOM 606
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF LAURIE ANN ONISHENKO
Order Under Section 161
[para 1]
1. WHEREAS a Settlement Agreement has been reached between Laurie Ann Onishenko (“Onishenko”) and the Executive Director, a copy of which is attached as Schedule “A”.
[para 2]
2. NOW THEREFORE the Executive Director, considering it to be in the public interest to do so, orders, by consent, that:
2.1 pursuant to section 161(1)(b) and (c) of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”) Onishenko cease trading in or be prohibited from trading in any securities or exchange contracts, and that any or all of the exemptions described in sections 44 to 47, 74, 75, 98 or 99 of the Act do not apply to Onishenko for a period of five years from the date of February 23, 1999, except that Onishenko be permitted to rely on the exemption contained in section 45(2)(7) of the Act for trading in one account of her own through one registered dealer; and
2.2 pursuant to section 161(1)(d) of the Act Onishenko resign all positions she holds as a director or officer of any issuer and that she is prohibited from becoming or acting as a director or officer of any issuer for a period five years from February 23, 1999.
[para 3]
DATED at May 14, 2001.
Steve Wilson
Executive Director
2001 BCSECCOM 608
SCHEDULE “A”
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF PERCY ELLISON SEKORA
AND LAURIE ANN ONISHENKO
Settlement Agreement
[para 1]
1. The following agreed statement of facts and settlement of issues has been reached between Percy Ellison Sekora (“Sekora”) and Laurie Ann Onishenko (“Onishenko”) (collectively, the “Respondents”) on the one hand and the Executive Director on the other, and forms the basis for the undertakings and orders consented to, by each of the Respondents, at paragraphs 4, 5, 6 and 7 of this Agreement.
Agreed Statement of Facts
[para 2]
2. The Respondents acknowledge the following facts, which occurred during the period from January, 1996, to February, 1999, (the “Relevant Period”) as correct:
2.1 Sekora is a resident of Grande Prairie, Alberta.
2.2 Sekora was first registered as a salesman under the Securities Act, S.A. 1981, c. S-6.1 (the “Securities Act of Alberta”) in 1987.
2.3 At all material times of the Relevant Period, Sekora was registered as a salesman and as an associate portfolio manager, under the Securities Act of Alberta, with Majendie Charlton Securities Ltd. (“MCS”), a registered securities dealer in Alberta. Sekora was also a director of MCS and the designated branch manager of MCS's Grande Prairie office.
2.4 Sekora's employment with MCS was terminated in September 1997.
2.5 Sekora is no longer registered under the Securities Act of Alberta, and has never been registered under the Securities Act, R.S.B.C. 1996, c.418 (the “Act”).
2.6 Onishenko is a resident of Grande Prairie, Alberta, and is the wife of Sekora.
2.7 Onishenko has never been registered in any capacity under the Securities Act of Alberta, or the Act.
2.8 On February 23, 1999, the Alberta Securities Commission (the “ASC”) approved and accepted the settlement agreement entered into between the Respondents and the staff of the ASC (the “Alberta Settlement Agreement”).
2.9 In the Alberta Settlement Agreement, the Respondents admitted that they had acted contrary to the Securities Act and Rules of Alberta, and the public interest. The ASC determined that it was in the public interest to make orders against the Respondents in Alberta. The ASC based its conclusions on the Agreed Statement of Facts contained in the Alberta Settlement Agreement.
2.10 In the Alberta Settlement Agreement, the Respondents admitted the following activities related to trading in securities in the province of British Columbia:
2.10.1 In March, 1997, Onishenko participated in a private placement of securities of Falcon Ventures International Corp. (“Falcon”), a private company incorporated in British Columbia. She purchased 833,000 units, priced below market value at the time, each unit consisting of one common share and one share purchase warrant, for a total acquisition price of $249,900.
2.10.2 Onishenko reported the trade, in Form 20A IP, (the “Form 20A IP Report”) and indicated she was purchasing these units as principal for her own account.
2.10.3 In fact, in March and April, 1997, the Respondents sold those units of Falcon to 13 Alberta residents (the “Alberta Investors”). Those trades were distributions, but a preliminary prospectus and a prospectus had not been receipted by the ASC as required by the Securities Act of Alberta.
2.10.4 None of the Alberta Investors in Falcon received the complete units of Falcon at the time of their investment. The Alberta Investors only received the share purchase warrants forming part of the units after the statutory hold period of one year, of which they were not informed at the time they made their investment.
2.10.5 At all material times of the Relevant Period, Sekora was the registered representative responsible for accounts at MCS, which included the accounts of a person whom Sekora knew or ought to have known was a resident of British Columbia (the “BC Client”).
2.10.6 While Sekora was acting as a registered representative responsible for the BC Client’s accounts, Sekora made eight transactions in the BC Client’s accounts without the BC Client’s prior knowledge or authorization, direction or approval.
Onishenko’s Conduct
2.11 Onishenko's Form 20A IP Report was misleading in a material respect and at the time and in light of the circumstances under which it was made, as she was not in fact purchasing as principal, but on behalf of the Alberta Investors. Onishenko made a statement that she ought to have known was false or misleading, contrary to section 50(1)(d) of the Act. Further, Onishenko could not rely on the exemptions in sections 74(2)(4) and 45(2)(5) of the Act because she was not purchasing as principal and in the result she participated in an illegal distribution in the securities of Falcon.
Sekora’s Conduct
2.12 Sekora traded in securities of Falcon, and made discretionary trades in the BC Client’s accounts, without being registered as a portfolio manager, or at all, in British Columbia, or having an exemption from registration, contrary to the registration requirements in section 34(1) of the Act.
2.13 Sekora traded in the BC Client’s accounts without instructions to do so from the BC Client, and failed to ensure that written authorization or ratification from the BC Client, naming Sekora as a person from whom trading instructions were to be accepted, was maintained in the BC Client’s account record, as required by section 39(b) of the Securities Rules, B.C. Reg. 194/97.
Mitigating Factors
[para 3]
3. In reaching this Settlement Agreement, the Executive Director has taken into account the following mitigating factors:
3.1 The Respondents have acknowledged their conduct in the Alberta Settlement Agreement and herein.
3.2 The ASC has imposed the following sanctions on the Respondents:
3.2.1 Sekora is cease traded and denied the use of all exemptions in the Securities Act of Alberta, except that he may trade through a registered broker in Alberta, for a period of seven years from February 23, 1999;
3.2.2 Sekora is prohibited from becoming or acting as a director or officer of any issuer in Alberta for a period of seven years from February 23, 1999;
3.2.4 Onishenko is prohibited from becoming or acting as a director or officer of any issuer in Alberta for a period of five years from February 23, 1999; and
3.2.5 Sekora has agreed to pay costs to the ASC, on behalf of both the Respondents, in the amount of $7,500 reflecting costs of the investigation by the ASC.
3.3 The Respondents have fully co-operated with Staff of the British Columbia Securities Commission (the “Commission”) throughout their enquiry.
Sekora’s Undertakings
[para 4]
4. Sekora undertakes:
4.1 not to apply for registration under the Act for a period of seven years from the date of February 23, 1999; and
4.2 to keep the Executive Director advised at all times of the location of the account and the transactions made in the account, through which he may trade pursuant to the Order made under paragraph 6.1.
Onishenko’s Undertakings
[para 5]
5. Onishenko undertakes:
5.1 not to apply for registration under the Act for a period of five years from the date of February 23, 1999; and
5.2 to keep the Executive Director advised at all times of the location of the account and the transactions made in the account, through which she may trade pursuant to the Order made under paragraph 7.1.
Orders
[para 6]
6. Sekora consents to an order by the Executive Director that:
6.1 pursuant to section 161(1)(b) and (c) of the Act that Sekora cease trading in or be prohibited from trading in any securities or exchange contracts, and that any or all of the exemptions described in sections 44 to 47, 74, 75, 98 or 99 of the Act do not apply to Sekora for a period of seven years from the date of February 23, 1999, except that Sekora be permitted to rely on the exemption contained in section 45(2)(7) of the Act for trading in one account of his own through one registered dealer; and
6.2 pursuant to section 161(1)(d) of the Act, that Sekora resign all positions he holds as a director or officer of any issuer, and that he is prohibited from becoming or acting as a director or officer of any issuer for a period of seven years from February 23, 1999.
[para 7]
7. Onishenko consents to an order by the Executive Director that:
7.1 pursuant to section 161(1)(b) and (c) of the Act that Onishenko cease trading in or be prohibited from trading in any securities or exchange contracts, and that any or all of the exemptions described in sections 44 to 47, 74, 75, 98 or 99 of the Act do not apply to Onishenko for a period of five years from the date of February 23, 1999, except that Onishenko be permitted to rely on the exemption contained in section 45(2)(7) of the Act for trading in one account of her own through one registered dealer; and
7.2 pursuant to section 161(1)(d) of the Act, that Onishenko resign all positions she holds as a director or officer of any issuer and that she is prohibited from becoming or acting as a director or officer of any issuer for a period five years from the February 23, 1999.
Waiver
[para 8]
8. The Respondents 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.
Execution
[para 9]
The parties to this Settlement Agreement agree that the Settlement Agreement may be executed in counter-part.
DATED at Grande Prairie, AB, on April 30, 2001.
“Percy Sekora”
Percy Ellison Sekora
“L.A. Onishenko” )
Witness Signature )
)
Laurie Onishenko )
Witness Name (please print) )
11311 - 90 Street )
)
Grande Prairie, AB )
Address )
Manager )
Occupation )
DATED at Grande Prairie, AB, on April 30, 2001.
“L.A. Onishenko”
Laurie Ann Onishenko
“P. Sekora” )
Witness Signature )
)
P. Sekora )
Witness Name (please print) )
11311 - 90 St. )
)
Grande Prairie )
Address )
Manager )
Occupation )
DATED at Vancouver, British Columbia, on May 14, 2001.
Steve Wilson
Executive Director