Settlements

Aatra Resources Ltd., et al. [Agreed Statement]

BCSECCOM #:
Document Type:
Agreed Statement
Published Date:
1992-07-10
Effective Date:
1992-07-07
Details:


Aatra Resources Ltd. et al.  (Re)
IN THE MATTER OF the Securities Act, S.B.C. 1985, chapter 83
AND IN THE MATTER OF Aatra Resources Ltd.,
Durham Securities Corporation Limited,
Alex Pancer and David J. Foster
Agreed Statement of Facts and Undertaking
W.D. Nesmith

July 7, 1992

AGREED STATEMENT OF FACTS AND UNDERTAKING:--  The following agreement has been reached between Alex Pancer ("Pancer"), David J. Foster ("Foster"), Durham Securities Corporation Limited ("Durham") and the Superintendent of Brokers:

1.As the basis for the undertaking referred to in this agreement Pancer, Foster and Durham acknowledge the following facts as correct:
(a)Aatra Resources Ltd. ("Aatra") (formerly Mt. Graves Resources Inc., formerly Roymais Enterprises Corporation) is a reporting issuer incorporated in British Columbia under the Company Act, R.S.B.C. 1979, c. 59;
(b)Durham was a securities dealer in Ontario registered under the Ontario Securities Act R.S.O. 1980, c. 466;
(c)Pancer was a vice-president and director of Durham and held approximately 25% of the shares of Durham. Foster was the president and a director of Durham and held approximately 70% of the shares of Durham;
(d)Pancer and Foster directed all of Durham's business activities;
(e)on August 16, 1989 Aatra completed an initial public distribution (the "IPO") of 675,000 common shares at a price of $0.35 by way of prospectus through the facilities of the Vancouver Stock Exchange (the "Exchange");
(f)Continental Securities acted as the agent for the IPO;
(g)Durham began purchasing shares of Aatra, for its inventory account and for the accounts of its clients which it controlled, through the Exchange immediately after the shares of Aatra were called for public trading.  Durham's first purchase occurred within the first minute of trading;
(h)on August 16 and 17, 1989 Durham purchased 340,500 shares of Aatra through the Exchange resulting in the reduction of the number of shareholders of Aatra from greater than two hundred to less than fifty.  The total trading volume during the two days was 440,500;
(i)Durham's aggressive purchasing program was responsible for moving the share price of Aatra from $0.35 to a close of $1.05 on August 17, 1989;
(j)from August 18, 1989 to November 16, 1989 Durham purchased greater than 65% of the total Aatra shares sold through the Exchange and was responsible for driving the share price of Aatra up to $3.65 at the close of trading on November 16, 1989;
(k)between August 16, 1989 and November 17, 1989 Durham obtained 1,163,130 Aatra shares in private transactions with Victor Meunier;
(l)by utilizing an aggressive buying program through the Exchange and by maintaining control over a majority of the free trading shares of Aatra, Durham was able to create and maintain an artificially high price for Aatra on the Exchange from August 16, 1989 until the Exchange halted all trading in Aatra on March 16, 1990;
(m)from August 1989 to March 1990 Durham maintained a high pressure commissioned sales operation in Ontario which enabled it to sell Aatra shares, at a price that was much greater than Durham's acquisition price, to over 1000 investors.  Durham used the share price of Aatra, as quoted on the Exchange, as its selling price, however, Durham did not conduct any sales through the facilities of the Exchange, instead the shares were sold over the counter, in violation of the Ontario Securities Act;
(n)Durham became an insider of Aatra within two days of the IPO but failed to file Insider Reports with the British Columbia Securities Commission regarding its acquisition and disposition of Aatra shares from August 1989 to March 1990;
(o)after August 17, 1989 Durham purchased shares of Aatra when it knew or ought to have known that the shareholder distribution had collapsed, a material fact not generally disclosed to the public;
(p)in December of 1990 the Ontario Securities Commission (the "OSC") determined that Foster, Pancer and Durham had conducted an illegal distribution of Aatra shares in Ontario; and
(q)the registrations of Foster, Pancer and Durham under the Ontario Securities Act  have been permanently cancelled by the OSC.
2.Pancer and Foster each consent to an order under section 144(1)(c) of the Act that the exemptions described in the sections 30 to 32, 55, 58, 80 and 81 do not apply to them for a period of twenty five (25) years from the date of this undertaking.
3.Pancer and Foster each consent to an order under section 144(1)(d) of the Act that they be prohibited from becoming or acting as a director or officer of any reporting issuer for a period of twenty five (25) years from the date of this undertaking.
4.Pancer and Foster consent to an order under section 144(1)(d) of the Act that they be prohibited from becoming or acting as a director or officer of any issuer that provides management and administrative, promotional or consulting services to a reporting issuer for a period of twenty five (25) years from the date of this undertaking.
5.Pancer and Foster each agree and undertake to pay the sum of $10,000 to the Minister of Finance and Corporate Relations of the Province of British Columbia, for a total of $20,000.
6.Pancer and Foster each 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 and the related orders.
DATED at Vancouver, British Columbia, on July 2, 1992.

____________________________)
Witness)
)"David J. Foster"
____________________________)
)
____________________________)
Address
DATED at Vancouver, British Columbia, on July 2, 1992.

____________________________)
Witness)
)"Alex Pancer"
____________________________)
)
____________________________)
Address
W.D NESMITH
Superintendent of Brokers