Settlements
DONALD LYNN WHORLEY, et. al. [Sec. 144 & Agreed Stmt]
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BCSECCOM #:
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Document Type:
Sec. 144 & Agreed Stmt
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Published Date:
1997-02-21
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Effective Date:
1997-02-13
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Details:
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IN THE MATTER OF THE SECURITIES ACT
S.B.C. 1985, c. 83
AND
IN THE MATTER OF DONALD LYNN WHORLEY, JAMES NEWTON, KEATH AVEN,
INTIYAZALI HUDANI AND LISA DAWN MOFFAT
Order Under Section 144
WHEREAS an Agreed Statement of Facts and Undertaking was executed by James Newton and the Executive Director, a copy of which is attached hereto as Schedule “A”;
NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders, BY CONSENT, that:
1. under section 144(1)(c) of the Securities Act, S.B.C. 1985, c. 83, that the exemptions described in sections 30 to 32.1, 55, 58, 80 and 81 do not apply to Newton for a period of three years from the date of this Order; and
2. under section 144(1)(d) of the Act, Newton be prohibited from becoming or acting as a director or officer of any reporting issuer for a period of three years from the date of the Order and until he has successfully completed a course of study satisfactory to the Executive Director concerning the duties and responsibilities of officers and directors.
DATED at Vancouver, British Columbia, on February 18, 1997.
Paul C. Bourque
Executive Director
SCHEDULE “A”
IN THE MATTER OF THE SECURITIES ACT
S.B.C. 1985, c. 83
AND
IN THE MATTER OF DONALD LYNN WHORLEY, JAMES NEWTON, KEATH AVEN,
INTIYAZALI HUDANI AND LISA DAWN MOFFAT
Agreed Statement of Facts and Undertaking
The following agreement has been reached between James Newton and the Executive Director:
1. As the basis for the order in paragraph 2 and the undertaking in paragraph 3 of this Agreement, Newton acknowledges the following facts as correct:
- (a) Burro Creek Minerals Ltd. (“Burro Creek”) was a reporting issuer incorporated in British Columbia under the Company Act, R.S.B.C. 1979, c. 59 until it was dissolved on October 1, 1993. The common shares of Burro Creek were listed on the Vancouver Stock Exchange from April 12, 1989 to May 4, 1991;
(b) Whorley acted as the directing mind of Burro Creek from at least July 5, 1990 through September 12, 1990 (the “Relevant Period”);
(c) Newton was a director of Burro Creek during the Relevant Period;
(d) during the Relevant Period, Whorley caused Burro Creek to enter into ten written agreements (the “Agreements”) whereby ten mineral claims (the “Mineral Claims”) were purportedly transferred by the vendors (the “Vendors”) to Burro Creek in exchange for Burro Creek shares;
(e) during the Relevant Period, in ten distributions (the “Distributions”), Whorley caused Burro Creek to distribute one million shares in Burro Creek (the “Shares”) to the Vendors purportedly in consideration for the transfer of the Mineral Claims;
(f) a majority of the Vendors had no proprietary interest in the Mineral Claims;
(g) pursuant to undisclosed collateral agreements between Whorley and the Vendors, most of the Shares were endorsed by the Vendors and delivered to Whorley;
- (h) the facts set out in paragraphs (d) - (g) constituted a scheme relating to trades in or acquisitions of the securities of Burro Creek (the “Scheme”), contrary to section 41.1 of the Securities Act, S.B.C. 1985, c. 83 (the “Act”). As a result of the Scheme:
- (i) Burro Creek distributed the Shares without acquiring legal ownership of most of the Mineral Claims; and
(ii) Whorley secretly acquired shares in Burro Creek for no consideration;
- (i) during the Relevant Period, Newton was not actively involved in the management of Burro Creek’s affairs. However, under Whorley’s direction, Newton executed each of the Agreements on behalf of Burro Creek;
(j) most of the Shares were issued without full consideration, contrary to section 43 of the Company Act;
(k) most of the Distributions were made without registration, without filing and obtaining a receipt for a prospectus and without an applicable exemption from the registration and prospectus requirements of the Act, contrary to sections 20 and 42 of the Act;
(l) Burro Creek failed to file press releases and material change reports regarding most of the Distributions, contrary to section 67 of the Act;
(m) during the Relevant Period, Newton made no reasonable effort to satisfy himself that the Agreements were in the best interests of Burro Creek and he made no reasonable effort to ensure that Burro Creek was complying with any of its obligations under the Company Act or under the Act; and
(n) during the Relevant Period, Newton failed to act in the best interests of Burro Creek and to exercise the care, diligence and skill of a reasonably prudent person, contrary to section 142 of the Company Act.
2. Newton consents to an order (the “Order”) by the Executive Director:
(i) under section 144(1)(c) of the Act that any or all of the exemptions described in sections 30 to 32.1, 55, 58, 80 and 81 do not apply to Newton for a period of 3 years from the date of the Order; and
(ii) under section 144(1)(d) of the Act that Newton be prohibited from becoming or acting as a director or officer of any reporting issuer for a period of 3 years from the date of the Order and until he has successfully completed a course of study satisfactory to the Executive Director concerning the duties and responsibilities of officers and directors.
3. Newton undertakes to pay to the British Columbia Securities Commission the sum of $5,000.
4. Newton 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 the Order.
DATED at Vancouver, British Columbia, on February 13, 1997.
| “Andrew Walker”_______________ | ) |  |
| Witness | ) | |
| A. Walker_____________________ | ) | |
| Witness Name | ) | |
| 201-110 Cambie St., Vancouver BC | ) | |
| Address | ) | James Newton |
| Lawyer_______________________ | ) | |
| Occupation | ) | |
DATED at Vancouver, British Columbia, on February 13, 1997.
Paul C. Bourque
Executive Director