2003 BCSECCOM 404

1. under section 161(1)(a) of the Act, McCarney comply with or cease contravening the Act;

2. under section 161(1)(b) of the Act, that McCarney cease trading in any securities or exchange contracts;

3. under section 161(1)(c) of the SecuritiesAct, RSBC 1996, c. 418 that any or all of the exemptions described in any of sections 44 to 47, 74, 75, 98 and 99 of the Act do not apply to McCarney;

4. under section 161(1)(d) of the Act, that McCarney resign from any position he holds as a director or officer of any issuer;

5. under section 161(1)(d) of the Act, that McCarney is prohibited from becoming or acting as a director or officer of any issuer;

6. under section 161(1)(d) of the Act that McCarney be prohibited from engaging in any investor relations activities;

7. under section 174 of the Act that McCarney pay prescribed fees or charges for the costs of, or related to, the Hearing; and

8. any other orders as may be appropriate in the circumstances.

¶ 2 The Commission will be asked to consider the following facts and allegations in making its determinations:

1. On January 6, 2003, Staff of the Commission obtained an Investigation Order under section 142 of the Act (the Investigation Order) that ordered Staff to investigate 526053 BC Ltd. (526053), McCarney Technologies Inc. (MTI), Autolab LLC (Autolab), IVS Intelligent Vehicle Systems (IVS), McCarney, James Mead, Trevor Park, Cathy Sackville and Brent Edgson. The Investigation Order directed Staff to enquire into, inspect and examine any person, company or other entity on any matter that may reasonably relate to:

(a) directors, officers, agents, related parties and employees of 526053;

(b) the participation of the Parties in the trading or distribution of securities in British Columbia;

(c) the operations of the Parties and any related entities; and

(d) the proceeds obtained from the trading or distribution of securities by the Parties, the whereabouts of those proceeds, and the use that has been made of those proceeds.

during the period from December 1, 1997, forward.

2. McCarney:

(a) is not registered under the Act;

(b) was a director and remains an officer of MTI;

(c) is the sole director and officer of 526053;

(d) was the sole officer and shareholder of Autolab;

(e) was an officer and director of IVS during the period October 1992 through to September 1999; and

(f) is the subject of an outstanding Cease Trade Order (failure to file insider trading reports) issued by the Commission on March 3, 1999.

3. On January 7, 2003, a Demand for Production pursuant to section 144 of the Act was served on McCarney’s counsel of record. The following demands remain outstanding:

(a) a list of the names, amounts and the dates of all the lenders who have exercised any warrants relating to the 526053 loan agreements; and

(b) a list of all the representatives who participated in the 526053 loan agreements.

4. On January 14, 2003, another Demand for Production pursuant to section 144 of the Act was served on McCarney’s counsel of record. All requests contain in this demand have been answered.

5. On January 28, 2003, another Demand for Production pursuant to Section 144 of the Act was served on McCarney’s counsel of record. The following demand remains outstanding:

(a) copies of annual financial statements for 526053, covering the period from December 31, 1997 to December 31, 2002.

6. On February 17, 2003, another Demand for Production pursuant to section 144 of the Act was served on McCarney’s counsel of record. The following demands remain outstanding:

(a) 526053’s financial statements prepared prior to 2003, for the period covering December 31, 1997 through December 31, 2002 (the Relevant Period). This should include, but is not limited to:

(i) financial statements filed by 526053 to support income tax returns; and

(ii) all notes and working papers of the accountant who prepared 526053’s financial statements; and

(b) a list of all representatives that raised money for 526053 through loan agreements, promissory notes or any other form.

7. On March 19, 2003, another Demand for Production pursuant to section 144 of the Act was served on McCarney’s counsel of record. The following demands for records, supporting documentation and explanations relating to 526053 remain outstanding:

(a) Journal entry J275 applied to the Loans from Shareholder account on the 526053 General Ledger (the GL) for 1998.

(b) The method in which Mr. McCarney’s annual salary was determined for the period from January 1997 though to December 31, 2002 (the Relevant Period).

(c) The determination of all salaries, consultant fees, and any other forms of remuneration paid directly or indirectly to Mr. McCarney during the Relevant Period by McCarney Technologies Inc. (MTI), 526053, Autolab LLC, and IVS Intelligent Vehicle Systems.

(d) All advances of funds by 526053 to MTI.

(e) A complete list of all persons who have loaned money to 526053 in the Relevant Period and have subsequently been repaid.

(f) Journal entries J262 through to J268 applied to the Loans-Private Placement account in the GL for 1998.

(g) A list of all term deposits and other investments (including dates, terms, amounts and account numbers) purchased by 526053 during the Relevant Period.

(h) Cheque #714 payable to D.E. Russel cleared on March 17, 2000 from the 526053 Royal Bank Canadian Account (RBC Canadian Account).

(i) All payments made to Radar Investments during the Relevant Period.

(j) The withdrawal of $1,517,000 on August 22, 2000 from the RBC Canadian Account.

(k) The transfer of US$50,028.80 on August 30, 2000 from 526053 Royal Bank US Account (RBC US Account) to Nevis American.

(l) The withdrawal of $31,480.11 on September 27, 2000 from the RBC US Account.

(m) The withdrawal of $680,000 on October 31, 2000 from the RBC Canadian Account.

(n) All supporting documentation and records relating to the following cheques made payable to Gayle Legault: