Settlements
Top Rank Investment (International) Ltd., et al. [Sec. 144]
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BCSECCOM #:
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Document Type:
Sec. 144
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Published Date:
1996-08-30
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Effective Date:
1996-08-21
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Details:
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Top Rank Investment (International) Ltd. (Re)
IN THE MATTER OF The Securities Act, S.B.C. 1985, c. 83
AND IN THE MATTER OF Top Rank Investment (International) Ltd.
and Top Rank (Macau) Investment Co. Ltd.
AND IN THE MATTER OF Joseph Yan-Lap Chan, Kit Wai Cheung
(a.k.a. Johnny Kit Wai Cheung and Johnny Kit-Wai Cheung), and
Mau Chung Ng (a.k.a. Alfred Ng)
AND IN THE MATTER OF Top Rank Investment (International) Ltd.
and Top Rank (Macau) Investment Co. Ltd.
AND IN THE MATTER OF Joseph Yan-Lap Chan, Kit Wai Cheung
(a.k.a. Johnny Kit Wai Cheung and Johnny Kit-Wai Cheung), and
Mau Chung Ng (a.k.a. Alfred Ng)
Order Under Section 144
D.E. Holley
August 21, 1996
ORDER:-- WHEREAS an Agreed Statement of Facts and Undertaking was executed by Joseph Yan-Lap Chan, Kit Wai Cheung (a.k.a. Johnny Kit Wai Cheung and Johnny Kit-Wai Cheung), Mau Chung Ng (a.k.a. Alfred Ng), Top Rank Investment (International) Ltd. and Top Rank (Macau) Investment Co. Ltd. (collectively, the "Top Rank Group") and the Executive Director, a copy of which is attached hereto as Schedule "A" (the "Agreed Statement");
NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, order, BY CONSENT, that:
| 1. |  | under section 144(1)(a) of the Securities Act, S.B.C. 1985, c. 83 (the "Act"), the Top Rank Group comply with sections 20 and 42 of the Act; and | |
| 2. | | under section 144(1)(b) of the Act, that the Top Rank Group cease trading in Forex Contracts, as defined in the Agreed Statement, in British Columbia until such time as: | |
| (a) | | the trading in Forex Contracts is done in compliance with sections 20 and 42 of the Act; and | |
| (b) | | the Top Rank Group provides payment in full to the British Columbia Securities Commission of the amount set out in paragraph 3 of the Agreed Statement. | |
* * * * *
Schedule "A"
IN THE MATTER OF THE SECURITIES ACT
S.B.C. 1985, c. 83
AND
IN THE MATTER OF TOP RANK INVESTMENT (INTERNATIONAL) LTD.
AND TOP RANK (MACAU) INVESTMENT CO. LTD.
AND
IN THE MATTER OF JOSEPH YAN-LAP CHAN, KIT WAI CHEUNG (a.k.a. Johnny Kit Wai Cheung and Johnny Kit-Wai Cheung),
AND MAU CHUNG NG (a.k.a. Alfred Ng)
Agreed Statement of Facts and Undertaking
Based on the representations of Joseph Yan-Lap Chan ("Chan"), Kit Wai Cheung (a.k.a. Johnny Kit Wai Cheung and Johnny Kit-Wai Cheung) ("Cheung") and Mau Chung Ng (a.k.a. Alfred Ng) ("Ng") (collectively, the "Top Rank Principals"), the following agreement has been reached between Top Rank Investment (International) Ltd. and Top Rank (Macau) Investment Co. Ltd. (collectively, the "Top Rank Companies"), the Top Rank Principals and the Executive Director:
| 1. | | As the basis for the orders described in paragraph 2 and undertaking in paragraph 3 of this agreement, the Top Rank Principals and the Top Rank Companies acknowledge the following facts as correct: | |
| (a) | | Chan, a businessman of 504 Kai Tak Commercial Building, 317-321 Des Voeux Road, Central Hong Kong, is a shareholder and a managing director of Top Rank Investment (International) Ltd.; | |
| (b) | | Cheung, a businessman of 504 Kai Tak Commercial Building, 317-321 Des Voeux Road, Central Hong Kong, is a shareholder and a managing director of both Top Rank Investment (International) Ltd. and Top Rank (Macau) Investment Co. Ltd.; | |
| (c) | | Ng, a businessman of 504 Kai Tak Commercial Building, 317-321 Des Voeux Road, Central Hong Kong, is a shareholder and director of Top Rank Investment (International) Ltd. and a director of Top Rank (Macau) Investment Co. Ltd.; | |
| (d) | | Top Rank Investment (International) Ltd. is a private company incorporated in Hong Kong; | |
| (e) | | Top Rank (Macau) Investment Co. Ltd. ("Top Rank Macau") is a private company incorporated in Macau; | |
| (f) | | Goldman Stanley Consultants Inc. ("Goldman Stanley") is a private company incorporated in British Columbia under the Company Act, R.S.B.C. 1979, c. 59; | |
| (g) | | during the period from approximately January 1994 until July 1995 (the "Material Period"), Goldman Stanley and the Top Rank Group engaged in the business of trading in securities in British Columbia, as described in paragraphs 1(h) - (j) below; | |
| (h) | | the Top Rank Companies were in the business of entering into contracts with members of the public in British Columbia (the "Clients") that provide the Clients with the opportunity to speculate on the daily fluctuations of exchange rates of foreign currencies and of precious metal prices by purchasing or selling those currencies or precious metals on margin (collectively, the "Forex Contracts"). Goldman Stanley acted as agent in British Columbia for the Top Rank Companies during the Material Period; | |
| (i) | | the Top Rank Companies, in their capacity as Forex Contract dealers, participated in the business described in paragraph 1(h) above by, among other things: | |
| (i) | | requiring each Client to deposit and maintain with the Top Rank Companies a predetermined amount of U.S. dollars, referred to as "margin" funds, with the Top Rank Group. Funds received from Clients were placed into a trust account but were not otherwise segregated. The trust account for Clients' funds was kept separate and apart from other accounts held by the Top Rank Companies. The deposits and withdrawals from the trust account were recorded in the books of the Top Rank Companies; | |
| (ii) | | putting the information regarding each Client's Forex Contract position or transaction into a computer to produce the Clients' statements at the end of every day. The Top Rank Companies would send the Clients' statements by facsimile transmission to Goldman Stanley on a daily basis for distribution to the Clients. The original Clients' statements would be collected and sent to Goldman Stanley on a weekly basis; | |
| (iii) | | receiving from the Clients the aggregate amount of U.S. $628,809.87; and | |
| (iv) | | settling with each Client, as of August 17, 1995, all outstanding Clients' accounts, with the exception of two accounts which Andy Chan (a.k.a. Wing Leung Chan, Ying-Leung Chan and Ying Leung Chan), who was a principal of Goldman Stanley, represented to the Top Rank Companies were settled from monies owed to the Top Rank Companies from Goldman Stanley; | |
| (j) | | Goldman Stanley, in its capacity as agent in British Columbia for the Top Rank Companies, participated in the business described in paragraph 1(h) above by, among other things: | |
| (i) | | providing Clients with forms of agreements to enter into with the Top Rank Companies and overseeing the signing of these agreements; | |
| (ii) | | operating offices and/or phone services within British Columbia which provided a facility for Clients to obtain information about and enter into the Forex Contracts with the Top Rank Companies; | |
| (iii) | | placing advertisements for the recruitment of individuals to solicit Clients and to assist Clients in entering into the Forex Contracts; | |
| (iv) | | providing seminars and training sessions regarding various aspects of the business of the Top Rank Companies and of Goldman Stanley and various aspects of trading in Forex Contracts; | |
| (v) | | facilitating the payment of commissions to those who solicited Clients and traded Forex Contracts on behalf of Clients; and | |
| (vi) | | establishing and maintaining bank accounts and conducting financial transactions to facilitate the Top Rank Companies' business in British Columbia; | |
| (k) | | Goldman Stanley, the Top Rank Principals and the Top Rank Group were not registered to trade in securities, referred to in paragraph 1(h) above as Forex Contracts, under section 20 of the Act; | |
| (l) | | no prospectus was filed in respect of the securities, referred to in paragraph 1(h) above as Forex Contracts, of the Top Rank Companies as required under section 42 of the Act; and | |
| (m) | | on November 8, 1995, the Superintendent of Brokers issued a Notice of Hearing under section 144 of the Securities Act, S.B.C. 1985, c. 83 (the "Act"), in which Goldman Stanley, the Top Rank Principals, the Top Rank Companies and others were named as respondents, concerning the matters referred to in paragraphs 1(h) - (j) above. | |
| 2. | | Each of Chan, Cheung, Ng, Top Rank Investment (International) Ltd. and Top Rank (Macau) Investment Co. Ltd. consent to an order by the Executive Director that: | |
| (a) | | under section 144(1)(a) of the Act, that he or it comply with sections 20 and 42 of the Act; | |
| (b) | | under section 144(1)(b) of the Act, that he or it cease trading in Forex Contracts in British Columbia until such time as: | |
| (i) | | the trading in Forex Contracts is done in compliance with sections 20 and 42 of the Act; and | |
| (ii) | | the amount set out in paragraph 3 of this agreement has been paid in full to the British Columbia Securities Commission. | |
| 3. | | The Top Rank Principals undertake on behalf of Top Rank Group to pay the British Columbia Securities Commission the sum of $25,000. | |
| 4. | | Each of Chan, Cheung, Ng, Top Rank Investment (International) Ltd. and Top Rank (Macau) Investment Co. Ltd. waives any right he or it 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. | |
| ) | | |
| Witness Signature | ) | | |
| ) | | |
| Lee Ching Sze Susana | ) | | |
| Name (Please Print) | ) | | |
| 1501 Edinburgh Tower, The | ) | Joseph Yan-Lap Chan | |
| Landmark, Central, Hong Kong | ) | | |
| Address | ) | | |
| Solicitor | ) | | |
| Occupation | ) | | |
| ) | | |
| Witness Signature | ) | | |
| ) | | |
| NG HOI-KI | ) | | |
| Name (Please Print) | ) | | |
| ) | Kit Wai Cheung | |
| 61, PERCIVAL ST. 2/F, H.K. | ) | (a.k.a. Johnny Kit Wai | |
| | Cheung and | |
| Address | ) | Johnny Kit-Wai Cheung) | |
| ) | | |
| Occupation | ) | | |
| ) | | | |
| Witness Signature ) | | | |
| ) | | | |
| Lee Ching Sze Susana ) | | | |
| Name (Please Print) ) | | | |
| ) | | Mau Chung Ng | |
| 1501 Edinburgh Tower, The Landmark ) | | (a.k.a. Alfred Ng) | |
| Address Central, Hong Kong ) | | | |
| Solicitor ) | | | |
| Occupation ) | | | |
| DATED at Hong Kong, on July 22, 1996. | |
| TOP RANK INVESTMENT (INTERNATIONAL) LTD. | |
| ____________________________ Authorized Signatory | |
| Ng Mau Chung________________ Print Name | |
| ____________________________ Authorized Signatory | |
| Joseph Yan-Lap Chan____________ Print Name | |
| DATED at Hong Kong, on July 22, 1996. | |
| TOP RANK (MACAU) INVESTMENT CO. LTD. | |
| ____________________________ Authorized Signatory | |
| Ng Mau Chung____ Print Name | |
| ____________________________ Authorized Signatory | |
| ____________________________ Print Name | |
DATED at Vancouver, British Columbia, on July 26, 1996.