Settlements
DAVID REG LEWIS, et. al. [Settlement Agrmt.]
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BCSECCOM #:
2001 BCSECCOM 488
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Document Type:
Settlement Agrmt.
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Published Date:
2001-05-10
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Effective Date:
2001-05-08
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Details:
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2001 BCSECCOM 488
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF DAVID REG LEWIS AND
SEA TANK SYSTEMS CORPORATION
Settlement Agreement
[para 1]
1. The following agreement has been reached between David Reg Lewis (“Lewis”) and Sea Tank Systems Corporation (“Sea Tank”), and the Executive Director.
Agreed Statement of Facts
[para 2]
2. As the basis for the undertakings referred to in paragraphs 4 and 5 of this agreement, Lewis and Sea Tank acknowledge the following facts as correct:
2.1 Sea Tank was incorporated under the Company Act, R.S.B.C. 1996, c. 62, on May 16, 1997, and is not a reporting issuer under the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”).
2.2 Lewis is a resident of British Columbia, and, at all material times, Lewis was (and still is) the president, secretary, sole director and controlling shareholder of Sea Tank.
2.3 During the period from March 13, 1998 through to November 10, 1998 (the “Material Period”), Lewis distributed 90-day promissory notes (the “Promissory Notes”) to three Canadian residents, one of whom was a resident of British Columbia, 14 residents of the United States of America, and one resident of Anguilla, British West Indies.
2.4 The amount that Lewis had raised from the public through the distribution of the Promissory Notes totalled the sum of $48,500.00 CDN and $109,332.00 US.
2.5 Each of the Promissory Notes carried a rate of return of 100% that was payable at the end of the 90-day term, and an option to convert the full principal of the promissory note into the common stock of Sea Tank, or that of its successor, in lieu of a payout.
2.6 Lewis has never been registered in any capacity under the Act.
2.7 Lewis did not file a prospectus under the Act, nor was he able to rely upon any statutory exemptions from the registration and prospectus requirements of the Act, to distribute the Promissory Notes in British Columbia, contrary to sections 34(1)(a) and 61(1) of the Act.
2.8 During the Material Period, Lewis, with the intention of effecting a trade in a security and without obtaining the prior written permission of the Executive Director, made representations that the securities of Sea Tank would be listed and posted for trading on an exchange, contrary to section 50(1)(c)(i) of the Act.
Mitigating Factors
[para 3]
3. The Executive Director has taken into account the following facts as factors mitigating the sanctions that would otherwise have applied in the public interest:
3.1 Lewis has cooperated fully with the staff of the British Columbia Securities Commission (the “Commission”), in its investigation relating to this matter.
3.2 Lewis has repaid $6,980.00 to the sole British Columbia investor, who had invested $25,000.00 in the Promissory Notes.
3.3 Lewis has ceased distributing the Promissory Notes to the public or making any solicitations to the public with respect to the Promissory Notes.
Undertakings
[para 4]
4. Lewis undertakes to:
4.1 deliver to the sole British Columbia investor, to whom the Promissory Notes were distributed, a notice providing the purchaser with a right to rescind the purchase and to receive a full refund of the amount paid, within 30 days from the date the notice is received;
4.2 submit to the staff of the Commission a copy of the rescission notice for review and approval, prior to delivering the notice to the British Columbia investor;
4.3 comply fully with the Act, the Securities Rules, B.C. Reg. 194/97, as amended by B.C. Reg. 18/98 (the “Rules”), and any applicable regulations, policies and guidelines; and
4.4 pay $10,000.00 to the Commission at the time of entering into this settlement, $500.00 of which represents the costs of the investigation, and the remainder a penalty, which will be paid into the Industry Education Fund.
[para 5]
5. Sea Tank undertakes:
5.1 not to accept any exercise of the options that were attached to the Promissory Notes, for the conversion of the principal amount of the Promissory Notes into its securities, or the securities of its successor; and
5.2 to comply fully with the Act, the Rules, and any applicable regulations, policies and guidelines.
Waiver
[para 6]
6. Lewis and Sea Tank 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.
[para 7]
DATED at Victoria, British Columbia, on March 27th, 2001.
“David R. Lewis”
David Reg Lewis
“W. Dale Murray”_________________
Witness Signature
“William Dale Murray”
Witness Name (please print)
736 Broughton St.
Victoria, BC
Address
Solicitor
Occupation
DATED at Victoria, British Columbia, on March 27th, 2001.
“David R. Lewis”
Authorized Signatory for
Sea Tank Systems Corporation
“W. Dale Murray”___
Witness Signature
William Dale Murray
Witness Name (please print)
736 Broughton St.
Victoria, BC
Address
Solicitor
Occupation
DATED at Vancouver, British Columbia, on May 8th, 2001.
“Steve Wilson”
Steve Wilson
Executive Director