Settlements

James B. Lewis [Sec. 144 & Agreed Stmt]

BCSECCOM #:
Document Type:
Sec. 144 & Agreed Stmt
Published Date:
1994-03-25
Effective Date:
1994-03-24
Details:


IN THE MATTER OF the Securities Act, S.B.C. 1985, chapter 83
AND IN THE MATTER OF James B. Lewis
Order Under Section 144
D.E. Holley
March 24, 1994

   ORDER:--  WHEREAS an Agreed Statement of Facts and Undertaking was executed by James B. Lewis ("Lewis") and the Superintendent of Brokers (the "Superintendent"), a copy of which is attached hereto as Schedule "A";

   NOW THEREFORE the Superintendent, considering that it would be in the public interest to do so, orders (the "Order") BY CONSENT, that:

1.
under section 144(1)(d) of the Securities Act, S.B.C. 1985, c. 83 Lewis be prohibited from becoming or acting as a director or officer of any reporting issuer or of any issuer which provides management, administrative or consulting services to a reporting issuer for a period of one year from the date of the Order.
D.E. HOLLEY
Superintendent of Brokers

* * * * *
Agreed Statement of Facts and Undertaking

   The following agreement has been reached between James B. Lewis ("Lewis") and the Superintendent of Brokers (the "Superintendent").

1.
As the basis for the orders and undertakings in paragraphs two, three and four of this agreement, Lewis acknowledges the following facts as correct:
(a)
BFD Industries Inc. ("BFD") is a reporting issuer incorporated in British Columbia under the Company Act, R.S.B.C. 1979, c. 59 whose common shares were listed on the Vancouver Stock Exchange (the "Exchange") from September 1983 to July 1993;
(b)
Lewis was a director of BFD from April 15, 1991, to June 11, 1993;
Quanta Contract

(c)
Lewis became aware that BFD had entered into the promotional services contract with Quanta (the "Quanta Contract") on or about October 21, 1991, when BFD issued a news release to announce that BFD had entered into the Quanta Contract;
(d)
during the course of the investigation conducted by the staff of the British Columbia Securities Commission, Lewis became aware that the Quanta Contract contained certain stated objectives (the "Objectives") with respect to the attainment of specific share price and trading volume targets for BFD's shares which were contrary to the public interest and which may have had the effect of creating or resulting in a misleading appearance of trading activity in, or an artificial price for, the securities of BFD;
(e)
in a news release dated October 21, 1991, BFD disclosed the existence of the Quanta Contract but did not disclose details of the Objectives or other information surrounding the Quanta Contract;
Private Placements

(f)
on December 6, 1991, and April 24, 1992, BFD distributed certain of its securities, including common shares with attached share purchase warrants, under two private placements (the "Distributions") and filed a Report of Exempt Distribution (the "Reports") for each, dated December 6, 1991, and April 28, 1992, respectively, and made the required filings (the "Placement Filings") with the Exchange;
(g)
BFD subsequently advised the staff of the Commission and the public that:
(i)
some of the securities from the Distribution were distributed by BFD to purchasers, some of whom were insiders of BFD, who were not fully disclosed as purchasers in the Reports and the Placement Filings;
(ii)
the Reports and Placement Filings did not disclose the identities of certain of the purchasers under the Distributions or, in some cases, the exemption under which the Distributions were made by BFD; and
(iii)
portions of the Distributions were made without the benefit of a prospectus or prospectus exemption;
(h)
Lewis, in his capacity as a director of BFD, ought to have known the facts set out in paragraph 1(g) above. Lewis became aware of those facts on or about August 5, 1992, when BFD issued a news release disclosing them;
(i)
as a result of the facts set out in paragraph 1(g) above, the Superintendent ordered on November 13, 1992, (the "November Order") that all trading cease in common shares of BFD represented by the share certificates relating to the Distributions until such time as BFD had filed with the Commission adequate, complete and satisfactory information with respect to the Distributions;
(j)
the November Order was revoked on February 23, 1993, after BFD met certain conditions, including disclosure of the facts and circumstances of the Distributions, filing of additional information with respect to the Distributions, and provision of additional disclosure documents to each actual purchaser under the Distributions, together with an offer of rescission;
(k)
as a director of BFD, Lewis, in exercising the powers and in performing the functions of a director and officer of BFD ought to have sought further and better disclosure from the other directors as to the business affairs of BFD and as to the news releases being disseminated by BFD;
Orders and Undertakings

2.
Lewis consents to an order (the "Order") by the Superintendent that:
(a)
under section 144(1)(d) of the Securities Act, S.B.C. 1985, c. 83 (the "Act"), Lewis be prohibited from becoming or acting as a director or officer of any reporting issuer or of any issuer which provides management, administrative or consulting services to a reporting issuer for a period of one year from the date of the Order;
3.
Lewis undertakes that:
(a)
he will seek such professional counsel as may be necessary or take such other steps as may be reasonably required to ensure that his future activities are in compliance with applicable securities legislation and policies;
(b)
before accepting any position as a director or officer of a reporting issuer, Lewis will successfully complete a course of study satisfactory to the Superintendent concerning the duties and responsibilities of directors and officers of reporting issuers; and
4.
Lewis consents to pay to the Minister of Finance and Corporate Relations the sum of $1,500; and
5.
Lewis waives any right he 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 any related orders.
        DATED at Aurora, Ontario, on February 14, 1994.

____________________ )
Witness name
____________________ )
address_______________________
"James B. Lewis"
____________________ )
occupation
DATED at Vancouver, British Columbia, on March 23, 1994.

D.E. HOLLEY
Superintendent of Brokers