COR #93/152

	Mark L. Skwarok, Kathleen Reilly for Commission Staff;
	Larry Jackie, Douglas Eyford for the Vancouver Stock Exchange;
	Roderick Anderson for Henry P.M. Huber.

On June 4, 1993, the Commission issued a decision in this matter.  Final orders were made against two of the three respondents in the hearing.  An interim order was made against the third respondent, Henry P.M. Huber, suspending his registration and removing his exemptions pending further submissions from the parties.  We have now received and considered those submissions.

Subsequent to June 4, the term of appointment to the Commission of Commissioner Davison, one of the three panel members, expired.  Although he participated in the June 4 decision and the findings regarding Huber's conduct, he played no part in this decision.

This decision should be read in conjunction with the June 4 decision.

Commission staff submits that orders should be made cancelling Huber's registration under the Act and removing his exemptions and prohibiting him from being a director or officer of a reporting issuer for 15 years.

The Vancouver Stock Exchange submits that orders should be made removing Huber's exemptions, prohibiting him from being a director of a reporting issuer and prohibiting him from being employed in the role of investor relations with a reporting issuer for 20 years.  The Exchange also submits that the Commission should not consider an application by Huber for registration as a salesman in the future.

Huber submits that he has already been subject to significant restrictions on his activities and to damage to his reputation as a result of these proceedings.  He submits that it would be reasonable to suspend his registration and remove his exemptions for 6 months from June 7, 1993, the date the interim order was served on him.

Huber argues, correctly, that Meunier, not Huber, was the driving force behind the scheme to corner the market in Aatra shares.  He also notes that he had no involvement in Durham Securities' promotion and sale of Aatra shares to investors in Ontario.

However, he continues to assert that he was misled by Meunier concerning the nominee accounts, that he was not responsible for the failure of Aatra's prospectus to disclose Meunier's involvement because Continental's lawyers were conducting the due diligence on Aatra's prospectus and that he had no financial motive in the form of inordinately large commissions or profits to participate in the scheme.  These assertions are directly contradicted by the evidence and our previous findings.

Our findings regarding Huber were that:

1.		Huber knew Meunier was a de facto director, as well as a promoter, of Aatra;
2.		Huber must have known Aatra's prospectus failed to disclose Meunier's role and he knew or ought to have known that this omission resulted in the prospectus being false and misleading;
3.		Huber sold Aatra's offering to Continental's clients when he knew or ought to have known that the prospectus for the offering was false and misleading;
4.		Huber must have known that the accounts of Quinn, Simpson and the eight nominees were nominee accounts for Meunier;
5.		Huber's discretionary trading of client accounts was in contravention of Exchange rule F. 3.02, which prohibits a broker from exercising discretionary authority over a client account "unless the client has given prior written authorization";
6.		Huber must have known of, and permitted or acquiesced in and thereby assisted in, the scheme to corner the market in Aatra shares, in contravention of Exchange rule F. 2.17.2;
7.		Huber must have known that Aatra's distribution had collapsed and failed to notify Continental's management or the Exchange, in accordance with Exchange Notice #48/89;
8.		In selling his 40,000 Aatra shares when he knew of the market corner being effected by Meunier, Huber contravened section 68 of the Act.

Huber was not the mastermind behind the scheme but his willingness to assist Meunier was an essential element of the scheme.  He permitted Meunier to complete the Aatra financing without any disclosure in the prospectus that Meunier was a promoter and de facto director.  He cooperated in opening 10 nominee accounts and placing 42 per cent of the offering in those accounts.  He placed most of the remainder of the offering in accounts of his clients and then quickly resold them, allowing Meunier and Durham to collapse the distribution. Many of these trades for clients were done on a discretionary basis without written authority, in contravention of Exchange rules.  Without this cooperation from Huber, Meunier could not have cornered the market, Durham could not have manipulated the price and the investors in Ontario would not have been sold Aatra shares at inflated prices and suffered the resulting and inevitable losses.

In addition to assisting Meunier in perpetrating the scheme, Huber engaged in improper insider trading, and made a substantial profit, by selling his 40,000 Aatra shares with knowledge that the distribution had collapsed.

A registrant holds a special position in the securities market and regulatory system. Subject to certain exemptions, trading in securities can only be done by or through a registered dealer.  A registered salesman of a dealer is required to meet educational requirements and to conduct business in accordance with regulatory standards.  The purpose of the registration requirement in the Act has been described as follows by the Supreme Court of Canada in Gregory & Co. v. Quebec Securities Commission, [1961] S.C.R. 584, where Fauteux J. observed at p. 588:

The paramount object of the Act is to ensure that persons who, in the province, carry on the business of trading in securities or acting as investment counsel, shall be honest and of good repute and, in this way, to protect the public, in the province or elsewhere, from being defrauded as a result of certain activities ...

As a registrant, and an experienced securities salesman and a partner of Continental, Huber had an obligation to prevent the very type of activity in which he participated.  Huber failed utterly to comply with this obligation.  Indeed, he played an essential role in a manipulation scheme that defrauded investors, prejudiced the public interest in a fair and efficient securities market and contributed to bringing the market into disrepute.

In order to protect investors and the securities market from this type of conduct, we consider it to be in the public interest to order that Huber no longer be permitted to participate in the market as a registrant and that he be removed from participating in any way for a significant period. We also consider it appropriate that Huber pay a portion of the costs of the investigation and hearing in this matter.

We order

1.		under section 144(1)(c) of the Act, that the exemptions described in sections 30 to 32, 55, 58, 80 and 81 of the Act do not apply to Huber for a period of 10 years from the date of this order;
2.		under section 144(1)(d) of the Act, that Huber is prohibited from becoming or acting as a director or an officer of any issuer for a period of 10 years from the date of this order;
3.		under section 144(1)(f) of the Act, that Huber's registration be cancelled;
4.		under section 154.2 of the Act, that Huber pay prescribed fees or charges for the costs of or related to the hearing incurred by the Commission and the Superintendent, the amount to be determined following further submissions from the parties.