Notices of Hearing & Temporary Orders

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

BCSECCOM #:
Document Type:
Sec. 161
Published Date:
2000-03-17
Effective Date:
2000-03-03
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 (AKA ANA HARRIS)


Notice of Hearing Under Section 161

1. TAKE NOTICE that a hearing will be held to give Richard Charles Harris III (“Harris”) and Ana Victoria Jimenez (“Jimenez”), (together, the “Respondents”) an opportunity to be heard before the British Columbia Securities Commission (the “Commission”) considers whether it is in the public interest:
      1.1 to make an order under section 161(1)(c) of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”) 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 the Respondents;

      1.2 to make an order under section 161(1)(d) of the Act that the Respondents are prohibited from becoming or acting as a director or officer of any issuer;

      1.3 to make an order under section 161(1)(d) of the Act that the Respondents are prohibited from engaging in investor relations activities;

      1.4 to make an order under section 162 of the Act that the Respondents pay an administrative penalty;

      1.5 to make an order under section 174 of the Act that the Respondents pay the prescribed fees or charges related to the hearing; and

      1.6 to make any other orders as may be appropriate in the circumstances.

2. TAKE NOTICE that the Commission will be asked to consider the following facts and allegations in making its determinations:
      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 its 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 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).

3. TAKE NOTICE that the Respondents may be represented by counsel at the hearing and may make presentations and lead evidence. The Respondents are requested to advise the Commission of their intention to attend the hearing by contacting the Secretary to the Commission at 1200 - 865 Hornby Street, Vancouver, BC, V6Z 2H4, phone: (604) 899-6500 and facsimile: (604) 899-6506.

4. TAKE NOTICE that the Respondents are required to attend at the 7th Floor Hearing Room, 865 Hornby Street, Vancouver, BC, on April 20, 2000, at 9:00 a.m., if they wish to be heard before the Commission fixes a date for the hearing.

5. TAKE NOTICE that determinations may be made in this matter if the Respondents or their counsel do not appear at the hearing.


DATED at Vancouver, British Columbia, on March 3rd, 2000.




Steve Wilson
Executive Director
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