Decisions
Pacific International Securities Inc. and Max Meier, Lawrence Hugh McQuid, Jean-Paul Philippe Bachellerie, Robert Herbert Blades, John Todd Eymann, Alberto John Quattrociocchi, and Martin J. Reynolds. [Hearing - Decision]
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BCSECCOM #:
2006 BCSECCOM 532
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Document Type:
Hearing - Decision
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Published Date:
2006-09-12
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Effective Date:
2006-09-12
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Details:
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2006 BCSECCOM 532
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Hearing
| Panel | Adrienne Salvail-Lopez | Vice Chair |
| John K. Graf | Commissioner | |
| Roy Wares | Commissioner |
| Dates of Hearing | 2002 January 14,15 July 24, August 27 October 7, 8, 9, 10, 21, 23, 28, 29, 30, 31 November 4, 5, 6, 12, 13, 14, 15, 20, 21 December 16, 17, 18, 19 2003 January 13, 14, 16, 20, 21, 22, 23 March 4, 10, 11, 12, 20, 24, 25, 26, 27, 28, 31 April 1, 3, 4, 9, 11, 14, 15, 16, 22, 23, 24, 28, 29, 30 May 1, 29, June 2, 3, 4, 6, 10, 12, 13 July 14, 15, 16, 24, 25, 28, 29, 30, 31 August 1, 5, 6 Oct 16, 17, 20, 21, 22, 23, 24, 28, 29 Nov 4, 17, 18, 19, 20, 21, 24 Dec 1, 2, 8, 10, 11, 12, 15, 17 2004 October 18, 19, 20, 21, 22, 26, 27, 28, 29 November 1, 3, 5, 8, 9, 10, 12, 15, 16, 17, 18 |
| Date of Majority Decision | September 1, 2006 |
| Date of Dissenting Findings | September 12, 2006 |
| Appearing | |
| James A. (Sasha) Angus Mark Hilford C. Paige Leggat | For the Executive Director |
| Donald J. Sorochan John R. Shewfelt Catherine M. Esson | For Pacific International Securities Inc., Max Meier, Jean-Paul Philippe Bachellerie, Robert Herbert Blades, John Todd Eymann, Alberto John Quattrociocchi, and Martin J. Reynolds |
| Mark L. Skwarok Stephen M. Zolnay | For Lawrence Hugh McQuid |
DECISION OF COMMISSIONERS GRAF AND WARES
I. DECISION
1. This decision relates
to a hearing under section 161 of the Securities Act, RSBC 1996, c.
418. It is the decision of Commissioners Graf and Wares.
2. The hearing lasted 124 days, over a period of almost three years, had some
20,000 pages of evidence and over 15,000 pages of transcripts.
3. The Executive Director issued the notice of hearing on July 20, 2001 [2001
BCSECCOM 720] and alleged that the Respondents contravened the know your client
rule (section 48 of the Securities Rules, BC Reg 194/97), the business
procedures rule (section 44 of the Rules) and acted contrary to the public
interest.
4. Except as noted below, we have found that the Executive Director did
not prove any of the allegations in the notice of hearing.
5. The exceptions are the Screening Deficiencies that we deal with under the
heading Compliance with Applicable Laws. These regulatory contraventions were
insignificant and we concluded we would impose no sanctions.
6. At the outset of this case, the Executive Director told us that Pacific
International was a haven for unsavoury characters conducting illicit
transactions and the Pacific International’s directors, driven by “greed”, “hid
their heads in the sand”. The Executive Director proved none of this.
7. This case appears to be based on a theory that US clients trading in US
markets at a Canadian brokerage equals illegal activity. The Executive Director
argued that Pacific International ought to have ceased doing business with all
its non-resident experienced market participant clients who traded on the
Bulletin Board, by March 24, 1997 (see the discussion under the heading The Red
Flag Argument). In our view, there is simply no basis for this argument.
8. Considering that Bulletin Board trading was an issue for the whole British
Columbia capital market, we think the Executive Director could have pursued
regulatory solutions other than an enforcement hearing.