COR #91/203

Catherine Sloan and Mark Skwarok, for the Superintendent of Brokers.

John McAfee, for Maurice Hamelin and Craig Harrison.

DECISION OF THE COMMISSION:--

1.		INTRODUCTION
2.		BACKGROUND
3.		THE ADVANCES TO MGH

3.1 Evidence

3.2 Findings

4.1 Evidence

4.2 Findings

4.2.1 GAAP

4.2.2 Misrepresentations

4.2.3 Responsibility

5.		HAMELIN'S SALE OF SEVEN MILE SHARES
6.		HAMELIN'S INSIDER REPORTS
7.		THE MONEYWORLD ADVERTISEMENTS

7.1 Evidence

7.2 Findings

A notice of hearing in this matter was issued by the Superintendent of Brokers on June 22, 1990. The notice was amended on October 2, 1990. The Commission has been asked to determine whether it is in the public interest to make orders under sections 144(1) and 154.2 of the Securities Act, S.B.C. 1985, c. 83, (the "Act") against Maurice Hamelin and Craig Harrison (the "Respondents").

The notice contains a series of allegations regarding the conduct of Hamelin, as president and a director of Seven Mile High Group, Inc., and Harrison, as secretary, controller and a director of Seven Mile. In summary, the allegations are that:

	- Seven Mile did not disclose certain payments to a private company controlled by Hamelin, which were material changes in the affairs of Seven Mile, contrary to section 67 of the Act;
	- Hamelin and Harrison effected fictitious transactions for the purpose of presenting a false and misleading appearance of the financial affairs of Seven Mile in its quarterly reports filed with the Commission;
	- Hamelin, while a control person of Seven Mile, sold shares of Seven Mile in contravention of section 42 of the Act;
	- Hamelin failed to file insider reports on a timely basis, contrary to section 70 of the Act; and
	- Hamelin directed Seven Mile to place an advertisement containing statements that he knew or ought to have known were misrepresentations.

1.		all trading cease in the shares of Seven Mile,
2.		the Respondents resign as officers and directors of Seven Mile and any other reporting issuer, and
3.		the Respondents are prohibited from becoming or acting as directors or officers of any reporting issuer.

On July 27, 1990, the Commission ordered under section 144(1) (b) of the Act, with the concurrence of Seven Mile, that all persons cease trading in the shares of Seven Mile until Seven Mile made disclosure satisfactory to the Superintendent. This order was revoked on August 10, 1991, after the Commission was advised that Seven Mile had, by a news release dated July 27, 1990, made disclosure satisfactory to the Superintendent.

On July 27, 1990, the Commission also ordered, under section 144(3) of the Act, that the Respondents cease trading in the shares of Seven Mile and that the Respondents are prohibited from becoming or acting as directors or officers of any reporting issuer, until the hearing then scheduled for October 9, 1990, was held and a decision was rendered.

On August 23, 1990, the Commission heard an application by Hamelin for the revocation of the temporary order dated July 27, 1990, that he cease trading in the shares of Seven Mile until the hearing is held and a decision is rendered. The Commission decided not to grant the application, stating that it was necessary and in the public interest for the temporary order to remain in effect.

After the notice was amended on October 2, 1990, Hamelin requested an adjournment of the hearing scheduled for October 9, 1990. The hearing finally began on February 25, 1991.

2. BACKGROUND

Seven Mile is a reporting issuer and an exchange issuer under the Act. It was incorporated under the Company Act, R.S.B.C. 1979, c. 59, on October 29, 1984, and its common shares are listed for trading on the Vancouver Stock Exchange.

During the period from January 31, 1989, to February 28, 1990, (the "Material Time") Hamelin was the president and a director of Seven Mile and Harrison was the secretary, controller and a director of Seven Mile.

M.G. Hamelin & Associates Ltd. ("MGH") is a private company, which was incorporated under the Company Act on January 29, 1985. MGH is controlled by Hamelin and its primary purpose during the Material Time was to provide Hamelin's management services to Seven Mile.

Seven Mile's business during the Material Time was the exploration of a set of mineral claims known as the Vault property, located in the Okanagan Valley of British Columbia. Exploration of the Vault property was being undertaken through a joint venture between Seven Mile and Inco Limited, a major international mining company based in Canada.

By early December 1989, no ore had been found on the Vault property. A modest exploration was planned for 1990.

Hamelin was the chief executive officer of Seven Mile and was primarily responsible for making the decisions. He had been involved with public companies for 12 years prior to the hearing and had established Seven Mile in 1984.

Harrison had taken five years of correspondence courses in accounting, although he received no formal accounting designation. He has practised as a public accountant with his own firm in Kelowna since 1979. During the Material Time, he was a full time employee of Seven Mile. He was responsible for the day to day administration of Seven Mile. He personally maintained the financial books and records and prepared the financial statements and quarterly reports for Seven Mile. He also did some record keeping for MGH.

During the Material Time, Seven Mile provided advances to Hamelin, through MGH, for the purpose of acquiring shares of Seven Mile. The amount advanced to Hamelin increased from about $150,000 on February 1, 1989, to $715,200 on February 6, 1990. No public disclosure was made of these advances. The advances were largely repaid, for one business day, at the end of each quarter and were not, for the most part, reflected in the financial statements included in the four quarterly reports filed by Seven Mile during the Material Time.

Between February 1, 1989, and January 31, 1990, Seven Mile issued 2,659,578 shares through private placements and the exercise of options, increasing its issued share capital by 75 per cent, from 3,521,101 to 6,180,679. Hamelin purchased 640,000 of the newly issued shares for a total of $788,400.

Hamelin also actively traded Seven Mile shares in the secondary market throughout the Material Time. Between January 1, 1989, and February 28, 1990, he purchased 673,900 shares and sold 1,168,400 shares in the market, for a net disposition of 494,500 shares. All of Hamelin's insider reports during this period were filed late.

The heaviest trading occurred between November 1, 1989, and February 28, 1990, when Hamelin purchased 294,200 shares and sold 642,800 shares in the market, for net a disposition of 348,600 shares. Hamelin was a control person of Seven Mile during this period. He did not file a notice of his intention to sell shares of Seven Mile.

In October and November 1989, Hamelin negotiated on Seven Mile's behalf a marketing agreement under which Seven Mile was to pay $425,000 (U.S.) to a Florida company for services in promoting Seven Mile's shares. Under this agreement, Seven Mile published two advertisements in December 1989 and February 1990, while Hamelin was trading heavily, describing the Vault property in extremely positive terms and promoting Seven Mile's shares with suggestions that their price was likely to increase to as much as 100 times their then current price.

The case presented by the Superintendent was focused on five matters raised in the notice. They are:

1.		The advances to MGH - During the Material Time, payments totalling $3,222,000 (the "MGH Payments") were made from Seven Mile to MGH. The Superintendent argued that these payments were material changes in the affairs of Seven Mile and ought to have been disclosed.
2.		The quarterly transactions - On the direction of and with the concurrence of Hamelin and Harrison, funds were transferred from MGH (which borrowed the money through bank overdrafts) to Seven Mile just before the end of each fiscal quarter of Seven Mile during the Material Time and were returned to MGH on the next business day. These transactions (the "Quarterly Transactions") were not disclosed in Seven Mile's financial statements or quarterly reports. The Superintendent argued that generally accepted accounting principles ("GAAP") and the quarterly report form both required disclosure of the transactions and that the transactions were effected for the purpose of presenting a false and misleading appearance of the financial affairs of Seven Mile in the quarterly reports.

Hamelin's sale of Seven Mile shares - During the period from November 1, 1989, to February 28, 1990, Hamelin disposed of 642,800 shares of Seven Mile. Hamelin was a control person of Seven Mile during this period. The Superintendent argued that certain of these shares were sold in contravention of section 42 of the Act.

4.		Hamelin's insider reports - During the Material Time, Hamelin's insider reports with respect to his holdings of Seven Mile shares were not filed with the Commission within the time required by section 70 of the Act.
5.		The MoneyWorld advertisements - On Hamelin's direction, Seven Mile placed an advertisement in the December/January 1990 issue of the publication MoneyWorld. A similar advertisement was placed in the February/March issue of MoneyWorld. The Superintendent argued that these advertisements contained statements that Hamelin knew or ought to have known were misrepresentations.

3.1 Evidence

During the Material Time, Seven Mile advanced a significant and growing amount of money to Hamelin, through MGH. Prior to October 1989, there was no specific authority for the advances. According to Hamelin and Harrison, the advances were for the purpose of providing funds to Hamelin to make a market in Seven Mile's shares. In October 1989, shareholder approval was obtained for a "financial assistance plan", under which advances could be made to employees to purchase Seven Mile's shares. By this time, Seven Mile had already advanced a net amount of more than $500,000 to Hamelin. The net amount advanced to Hamelin increased from about $150,000 in January 1989 to $715,200 on February 6, 1990.

The MGH Payments were a series of cheques, signed by Hamelin and Harrison, and debit entries, recorded in Seven Mile's books, in favour of MGH from the treasury of Seven Mile. The particulars of the MGH Payments are as follows:

April 1989	$	100,000
May 1, 1989		280,000
July 7, 1989		25,000
August 1, 1989		350,000
September 6, 1989		45,000
September 8, 1989		200,000
October 2, 1989		20,000
November 1, 1989		600,000
November 7, 1989		20,000
December 8, 1989		5,000
January 5, 1990		250,000
January 8, 1990		75,000
January 11, 1990		100,000
January 17, 1990		60,000
January 22, 1990		30,000
February 1, 1990		40,000
February 1, 1990		997,000
February 6, 1990		25,000
		--------
Total		$ 3,222,000

Harrison said that he had calculated the net difference between the MGH Payments, excluding the unauthorized transfers by the bank, and the total amount repaid by MGH to Seven Mile during the period April 1989 to February 6, 1990, to be about $150,000.

The total of $3,222,000 shown for the MGH Payments does represent only payments made by Seven Mile to MGH and does exclude the effect of repayments by MGH to Seven Mile. However, a detailed analysis of the MGH Payments and the repayments by MGH to Seven Mile shows that Seven Mile advanced a significant and growing amount of money to Hamelin.

The repayments by MGH fell into two groups. First, there were those forming part of the Quarterly Transactions, where large amounts were repaid to Seven Mile and then readvanced to MGH on the next business day. Second, there were three repayments shown in Seven Mile's books for a total of $520,000 on November 30 and December 1, 1989. This amount was readvanced in 6 payments concluding on January 22, 1990. The net amount advanced over the period of the MGH Payments, after deducting both groups of repayments, was $438,017. The amount outstanding before the MGH payments began in April 1989 was $277,183. The total amount outstanding at February 6, 1990, after all of the MGH Payments, was $715,200.

The amount increased further after February 6, 1990. Harrison admitted that the audited financial statements for the year ended April 30, 1990, disclosed that Hamelin and his wife owed Seven Mile approximately $800,000. Mr. Clark Gilmour, the current president of Seven Mile, testified that, at the date of the hearing, Hamelin owed Seven Mile $750,000.

The following table shows the amount of the advances to MGH as at the beginning of each quarter in comparison with the total assets of Seven Mile as shown in the Quarterly Report dated the previous day. The amounts have been derived from information in the audited financial statements dated April 30, 1989, the schedules of the MGH Payments and the Quarterly Transactions as agreed to by the Respondents, and Seven Mile's books.

	Advance	Total	Advance as
Date	Outstanding	Assets	% of Assets

May 1, 1989	$ 377,183	$2,541,680	14.8%
Aug l, 1989	402,183	2,615,412	15.4%
Nov 1, 1989	670,000	3,411,497	19.6%
Feb 1, 1990	690,200	5,494,532	12.6%

3.2 Findings

Continuous disclosure is a cornerstone principle of securities regulation. Section 67 of the Act reflects this principle by requiring that, upon a material change occurring in the affairs of a reporting issuer, a press release shall be issued and a material change report shall be filed as soon as practicable, disclosing the nature and substance of the change.

Section 1 of the Act defines material change as follows:

"material change" means, where used in relation to the affairs of an issuer, a change in the business, operations, assets or ownership of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer ...

Through the period of the MGH payments, the advances from Seven Mile to Hamelin represented a significant portion of Seven Mile's assets. The large exposure taken by Seven Mile in the form of loans to its president represented a major financial commitment that was not in the normal course of business and not of the type investors would normally expect for a junior mining exploration company. In our view, the information that Seven Mile had made these payments would reasonably be expected to have a significant effect on the market price or value of Seven Mile's shares.

We therefore find that the advances to Hamelin constituted a material change in the affairs of Seven Mile and that Seven Mile's failure to disclose them was in contravention of section 67 of the Act and National Policy No. 40. Hamelin and Harrison, as directors and senior officers, were responsible for ensuring that the required disclosure was made and failed to carry out this obligation.

4. THE QUARTERLY TRANSACTIONS

4.1 Evidence

The Quarterly Transactions were a series of transfers between the bank accounts of MGH and Seven Mile that were made, at the direction of and with the concurrence of Hamelin and Harrison, just before and after the end of each fiscal quarter of Seven Mile during the Material Time.

Both Seven Mile and MGH maintained bank accounts at the Canadian Imperial Bank of Commerce in Kelowna, British Columbia. On the last business day of each quarter, a deposit was made to Seven Mile's account of an amount withdrawn from MGH's account. On the first day of each subsequent fiscal quarter, a withdrawal was made from Seven Mile's account and the amount deposited to the MGH account.

The Quarterly Transactions involved the following deposits to and withdrawals from Seven Mile's account:

Date

Deposit

Date

Withdrawal

Jan 31, 1989	$185,614		Feb 1, 1989	$186,000
Apr 28, 1989	280,000		May 1, 1989	280,000
Jul 31, 1989	350,000		Aug 1, 1989	350,000
Oct 31, 1989	597,183		Nov 1, 1989	600,000
Jan 31, 1990	996,800		Feb 1, 1990	997,000

Section 145 of the Securities Regulation, B.C. Reg. 270/86, (the "Regulation") requires an exchange issuer to file a quarterly report in the required form. Seven Mile filed five quarterly reports, incorporating audited or unaudited financial statements, (collectively referred to as the "Quarterly Reports") with the Commission as follows:

Quarterly		Report
Report for		Certified	Financial
Period Ended	Date Filed	By	Statement
------------	----------	---------	------------
January 31,	April 3,	Hamelin	unaudited;
1989	1989	Harrison	prepared by
			management

April 30,	September	Hamelin	audited by
1989	26, 1989	Harrison	Goodman
			Parker

July 31,	October	Hamelin	unaudited;
1989	16, 1989	Harrison	prepared by
			management

October 31,	January 9,	Harrison	unaudited;
1989	1990	Weiss	prepared by
			management

January 31,	April 12,	Hamelin	unaudited;
1990	1990	Harrison	prepared by
			management

The financial statements included in each of the Quarterly Reports filed for 1989 took into account the quarter end transfer from MGH, but there was no disclosure of the Quarterly Transactions either in the management discussion portion of the Quarterly Reports or in the financial statements.

In addition to the financial statements filed with the Commission as part of the Quarterly Reports, Seven Mile prepared a set of audited financial statements for the six month period ended October 31, 1989. Seven Mile had these statements audited for the purpose of seeking a listing of its shares on The Toronto Stock Exchange (the "TSE"). A major accounting firm, Peat Marwick Thorne, Chartered Accountants, ("PMT") was retained to perform the audit because Seven Mile's previous auditor was a firm of certified general accountants, a professional group not recognized by the TSE as qualified to audit listed companies. These financial statements were not published or filed with the Commission. They contained no disclosure of the Quarterly Transactions.

Anthony Barke, a chartered accountant who is a partner and Director of Financial Consultancy Services with the firm Arthur Andersen & Co., Chartered Accountants, was tendered by the Superintendent as an expert witness in financial accounting. Barke has degrees in law and economics and in business, as well as being qualified as a chartered accountant in both the United Kingdom and British Columbia, and has 13 years experience in auditing, accounting and financial consulting. He has conducted audits of both private and public companies, including companies listed on the Exchange, companies listed on the TSE and companies whose securities are registered with the United States Securities and Exchange Commission. Barke had previously been qualified in the Supreme Court of British Columbia and the Alberta Court of Queen's Bench as an expert in financial accounting matters.

Barke expressed the opinion that non-disclosure of the Quarterly Transactions in the financial statements of Seven Mile incorporated in the Quarterly Reports filed during the Material Time was a departure from GAAP. He stated that disclosure of the Quarterly Transactions was required because

a)		they were transactions with related parties during the accounting period, and
b)		they were events occurring between the date of the financial statements and the date of their completion that caused significant changes to assets in the subsequent period.

3840.03  For the purpose of this Section, parties are considered to be related when one party has the ability to exercise, directly or indirectly, control or significant influence over the operating and financial decisions of the other. Two or more parties are also considered to be related when they are subject to common control or significant influence.

	3840.09  To the extent that financial statements include the results of transactions with related parties, users would reasonably expect to be made aware of those transactions. Such information could influence user interpretation of financial statements.
	3840.10  When a reporting entity has participated in transactions with related parties during a financial reporting period, disclosure of those transactions should be made. Management compensation arrangements, expense allowances and other similar payments to individuals in the ordinary course of business are deemed not to be related party transactions for purposes of this Section.
	3840.13  Disclosure of related party transactions should include the following information:

(a)		a description of the nature and extent of transactions;
(b)		a description of the relationship;
(c)		amounts due to or from related parties and, if not otherwise apparent, the terms of Settlement.

To convey the extent of related party transactions, it would be appropriate to disclose their recorded dollar amounts, supplemented by information to indicate the proportion of the enterprise's activities which involves related parties, if not otherwise apparent.

Barke also pointed to the Handbook requirements with respect to subsequent events, in sections 3820.10 and 3820.11.

3820.10  Financial statements should not be adjusted for, but disclosure should be made of, those events occurring between the date of the financial statements and the date of their completion that do not relate to conditions that existed at the date of the financial statements but; (sic)

(a)		cause significant changes to assets or liabilities in the subsequent period; or
(b)		will, or may, have a significant effect on the future operations of the enterprise.

3820.11  Disclosure of a subsequent event that does not require adjustment of the financial statements would be made by way of a note to the financial statements indicating both the nature of the event and, when practicable, the estimated financial effect.

Finally, Barke noted that one of the basic standards for determining whether an item should be disclosed in financial statements is its materiality. The concept of materiality is dealt with in section 1000.14 of the Handbook.

1000.14  Investors, creditors and other users are interested in information that may affect their decision making. Materiality is the term used to describe the significance of financial statement information to decision makers. An item of information, or an aggregate of items, is material if it is probable that its omission or misstatement would influence or change a decision. Materiality is a matter of professional judgment in the particular circumstances.

Referring specifically to Seven Mile's unaudited financial statements for the six months ended October 31, 1989, Barke noted the following:

	- Many items disclosed in the notes to the financial statements, which give an indication of Seven Mile's sense of materiality, were much smaller than the Quarterly Transactions. For example, note 5 provided details concerning an amount of $5,000 due from an employee and note 9 disclosed a related party transaction of $122,000. These amounts were significantly smaller than the $600,000 that was paid out to MGH on the first day of the subsequent quarter.
	- The $600,000 withdrawal on November 1, 1989, wiped out Seven Mile's cash balance of $597,204.
	- The $597,204 cash balance on the balance sheet was roughly equivalent to the accounts payable of $653,670. Barke noted that if users of the financial statements were aware of the removal of the cash the next day it might change their view of Seven Mile's ability to meet its accounts payable.

On this basis, Barke concluded that the Quarterly Transactions were material, even apart from the fact that they were related party transactions. He said that the Quarterly Transactions should have been disclosed, either as related party transactions or subsequent events, and that he was not aware of any provision of GAAP that would permit non- disclosure.

The Respondents did not dispute Barke's opinion. They took the position that the question of whether the Quarterly Transactions were required to be disclosed was a matter of technical judgment and that they had relied on their auditors to ensure that Seven Mile's financial statements complied with GAAP.

In support of this position, the Respondents presented Mr. Keith Anderson as an expert witness. Anderson is a chartered accountant and partner with Coopers & Lybrand, Chartered Accountants, in Edmonton. He has worked on many audits and has previously given expert evidence on about a dozen occasions

Anderson said that the recommendations regarding disclosure in the Handbook are not intended to apply to matters or items that are not material and that the determination of materiality requires the exercise of professional judgment. He said that it was common for companies without professional accounting staff to rely upon their auditors for assistance and direction in the preparation of financial statements to ensure that they comply with GAAP. He noted that, as accounting requirements have become more complex and technical, management is placing more reliance on auditors.

Barke agreed that small companies rely on their auditors for advice with respect to the preparation of financial statements. He also agreed that the determination of materiality could be a difficult decision and was "a matter of professional judgment in the particular circumstances". However, he expressed the view that a reasonable person would know that the Quarterly Transactions were material and should have been disclosed. Barke emphasized that the ultimate responsibility for the preparation of financial statements lies with the company.

The Respondents also called Derek Parker of Goodman Parker & Associates, Certified General Accountants, who audited the April 30, 1989, annual financial statements filed with Seven Mile's quarterly report for the same date, and Clifford Davis of PMT, who audited the October 31, 1989, six month financial statements.

Parker is a certified general accountant. His firm, Goodman Parker & Associates, was the auditor for Seven Mile from 1985 until August 1989. He told us that he was aware of the Quarterly Transactions, which he had discussed with Harrison on more than one occasion. He said that the Quarterly Transactions up to April 30, 1989, were disclosed in the audited financial statements for that date in the form of an asset called "Due from a Director", in the amount of $97,183. This amount, he said, represented the net effect of a series of transactions involving Seven Mile and MGH, including the $280,000 repayment to Seven Mile on the April 28, 1989, and a credit to MGH relating to an advance on salary. A note to the audited financial statements disclosed that the $97,183 had subsequently been repaid. No reference was made to the $280,000 advance to MGH on May 1, 1989. According to Parker, the note reflected the repayment by MGH to Seven Mile of $350,000 on July 31, 1989. He said he was not aware of the advance by Seven Mile to MGH of $350,000 on August 1, 1989, when he signed the auditor's report on August 2, 1989.

Davis testified that he became involved with Seven Mile when PMT was retained as auditor in December 1989. He said Hamelin and Harrison had approached the firm in the previous few months. He said that no one from PMT attended the office of Seven Mile. Harrison brought all the books and records of Seven Mile to PMT and the financial statements for the six months ended October 31, 1989, which were attached to Seven Mile's Quarterly Report, were typed by PMT using information prepared by Seven Mile. The same information, with some adjustments, was used in the audited financial statements for the period.

Both the unaudited and the audited financial statements for October 31, 1989, showed a cash balance of $597,204. Davis said that he became aware during the audit of the $600,000 payment out to the MGH account on November 1, 1989. After discussing it with Harrison, he was satisfied that there was no risk that the $600,000 was not collectable because Seven Mile had security for the advance on Hamelin's house and because Hamelin held a large volume of free-trading shares of Seven Mile. Davis said that, because Seven Mile had raised additional money by way of private placement by January 1990, he concluded that the $600,000 payment was not material.

Davis said that he was not personally aware, at the time of the audit, that $597,183 had been transferred to Seven Mile from MGH on October 31, 1990, although this amount was shown on working papers prepared by his assistant. He said that if he had been aware of the $597,183 deposit he would have insisted upon disclosure of the $600,000 advance made on November 1 because of the size of the transactions and the fact that Seven Mile and MGH were related parties.

Harrison said that he had met with Parker in connection with the audit of the financial statements for the year ended April 30, 1989, and discussed whether the advances to Hamelin should be disclosed. He said he would have followed Parker's advice if Parker had said that disclosure was required.

Similarly, Harrison met with Davis in mid December 1989 and discussed the affairs of Seven Mile in general and the Quarterly Transactions in particular. He said he would have made changes or notes to the financial statements if that had been recommended by Davis.

Seven Mile's management representation letter to PMT in connection with the audit of the financial statements for the period ended October 31, 1989, had been reviewed by Barke. According to Barke, the letter represented that there were no related party transactions other than as disclosed in the financial statements.

Harrison did not recall asking Parker for advice in respect of any of the unaudited financial statements filed with the Quarterly Reports. He acknowledged that he did not discuss the unaudited financial statements for the period ended July 31, 1989, with Davis.

Harrison explained that the purpose of the Quarterly Transactions was to avoid tax consequences to Hamelin. He said that the advances to Hamelin were repaid at the end of each quarter to avoid the triggering of a tax liability under Section 15 of the Income Tax Act, which provides that shareholders' loans unpaid after 1 year are taxed as income. He said that the specific dates were chosen because the financial statements coinciding with the dates were prepared for public disclosure and would therefore be available to Revenue Canada.

Hamelin said that he did not know anything about accounting but was fully aware of the importance of maintaining correct accounting records, adhering to accepted accounting procedures and presenting accurate financial statements. He said that he was not involved with bookkeeping or preparation of financial statements, which was left to Harrison. With respect to the Quarterly Transactions, he said that "whatever was done was for tax purposes."

4.2 Findings

The Superintendent argued that the financial statements filed by Seven Mile as part of the Quarterly Reports were false and misleading as a result of the failure to disclose the Quarterly Transactions. He noted that most of the cash balance reported in each of the financial statements was deposited in Seven Mile's account only on the last business day of the quarter and was withdrawn on the next business day. He argued that the failure to disclose the Quarterly Transactions was not a mistake but a deliberate attempt to mislead.

The Respondents argued that they had relied on their auditors, who had all of the information available to determine whether the Quarterly Transactions should be disclosed. They said that this was not a matter of inaccuracy with respect to the financial statements but an esoteric question of materiality and disclosure. They argued that the audit requirement existed to protect the public and that any problems resulting from failure by auditors to ensure proper disclosure should be dealt with by the professional accounting bodies, not the Commission.

In our view, the issues to be decided are as follows:

	- Did the financial statements incorporated in the Quarterly Reports fail to comply with GAAP?
	- Did the Quarterly Reports contain misrepresentations?
	- If so, should the Respondents be held responsible?

Seven Mile is a reporting issuer and an exchange issuer. Section 135(1) of the Regulation requires a reporting issuer to file an interim financial statement for each of the first three quarters of its financial year. Section 136 of the Regulation requires a reporting issuer to file a comparative financial statement annually. Section 145 of the Regulation requires an exchange issuer to file a quarterly report in the required form.

Form 61, the specified form of quarterly report, requires that interim or annual financial statements, as the case may be, be attached to the report as Schedule A. A notice issued by the Superintendent (NIN #89/5, dated January 27, 1989) advises that the filing of financial statements with a quarterly report also satisfies the requirements of section 135 or 136 of the Regulation.

Section 4(3) of the Regulation provides that financial statements required by the Act and the Regulation shall be prepared in accordance with GAAP.

Barke expressed the opinion that the financial statements incorporated in the Quarterly Reports filed by Seven Mile during the Material Time were not prepared in accordance with GAAP. We found Barke to be a forthright and convincing expert witness. His analysis was thorough and compelling and his opinion was not challenged.

Barke's opinion was based on the following analysis. Seven Mile and MGH were related parties as defined under GAAP. The Quarterly Transactions were large in relation to other items disclosed by Seven Mile in the notes to its financial statements and in relation to the cash balance reported in the financial statements. They would undoubtedly have been significant to an investor reviewing the Quarterly Reports as they would affect the interpretation of Seven Mile's financial position. The Quarterly Transactions were therefore material for the purposes of GAAP. In accordance with GAAP, the Quarterly Transactions should have been disclosed as related party transactions and, with respect to the withdrawals on the first day of each quarter, as subsequent events in the notes to the financial statements for the preceding period.

We accept Barke's opinion and find that the financial statements incorporated in the Quarterly Reports filed by Seven Mile during the Material Time were not prepared in accordance with GAAP. Seven Mile therefore contravened section 4(3) of the Regulation.

4.2.2 Misrepresentations

Section 1(1) of the Act defines misrepresentation and material fact as follows:

"misrepresentation" means

(a)		an untrue statement of a material fact, or
(b)		an omission to state a material fact that is

(i)		required to be stated, or
(ii)		necessary to prevent a statement that is made from being false or misleading in the circumstances in which it was made.

"material fact" means, where used in relation to securities issued or proposed to be issued, a fact that significantly affects, or could reasonably be expected to significantly affect, the market price or value of those securities.

The following table, presenting numbers extracted or calculated from the financial statements and the agreed statement of facts, illustrates the effect of the withdrawals.

	Accounts		Next Day
Date	Payable	Cash	Withdrawal	Net Cash

Jan.31/89	$104,378	$ 228,324	$186,000	$ 42,324
Apr.30/89	183,853	437,834	280,000	157,834
Jul.31/89	347,585	471,217	350,000	121,217
Oct.31/89	653,870	597,204	600,000	(2,796)

				Due From
	Due From	Due to	Next Day	Directors
Date	Directors	Directors	Withdrawal	Next Day

Jan.31/89		$ 35,417	$186,000	$150,583
Apr.30/89	$ 97,183		280,000	377,183
Jul.31/89	2,183		350,000	352,183
Oct.31/89		90,000	600,000	510,000

Finally, it should be noted, the quarterly report form itself required disclosure of the Quarterly Transactions. Form 61 requires the attachment of Schedule C, containing management discussion. The instructions for Schedule C require the issuer to include "brief details of any significant event or transaction which occurred during the period." A list of examples provided as a guide includes "transactions with related parties". This would clearly encompass the Quarterly Transactions.

We find that the failure to disclose the Quarterly Transactions in each of the Quarterly Reports was an omission to state a material fact that was required to be stated (by GAAP and Form 61) and that was necessary to prevent the financial statements from being false and misleading. Accordingly, we find that the Quarterly Reports filed by Seven Mile during the Material Time contained misrepresentations.

4.2.3 Responsibility

We now turn to the question of whether the Respondents should be held responsible for the failure of Seven Mile to prepare its financial statements in accordance with GAAP and for the filing by Seven Mile of Quarterly Reports containing misrepresentations.

As directors, Hamelin and Harrison each had a duty to act honestly and in good faith and in the best interests of Seven Mile, and to exercise the care, diligence and skill of a reasonably prudent person.

It is clear from Harrison's evidence that the Quarterly Transactions were designed to conceal the large and growing advances made to MGH. We have found that they resulted in the presentation of a false and misleading picture of the financial position of Seven Mile in the Quarterly Reports.

The Respondents' explanation for the Quarterly Transactions was that they were designed to avoid tax consequences to Hamelin. Their explanation for not disclosing the Quarterly Transactions in the Quarterly Reports was that they relied upon their auditors, who did not advise them to make any disclosure.

We reject the argument that the Respondents were not responsible for the failure to disclose the Quarterly Transactions because they relied on their auditors.

Auditors were not involved in two of the Quarterly Reports, those for January 31, 1989, and July 31, 1989, and therefore could not have been relied upon in the preparation of those reports.

The financial statements included in the quarterly report for April 30, 1989, were audited by Parker. Those statements showed only the balance owing to Seven Mile by MGH after the deposit of $280,000 on April 28, 1989. They also contained a note stating that the advances had subsequently been repaid. Harrison said he discussed the Quarterly Transactions with Parker. However, Parker said that when he signed the auditors' report on August 2, 1989, he was aware only of the $350,000 repayment by MGH to Seven Mile on July 31, 1989, which was the basis for the note that the advance had been repaid, not of the readvance of $350,000 by Seven Mile to MGH on August 1, 1989.

The financial statements filed with the October 31, 1989, quarterly report were unaudited, but a second set of statements for the same period was being audited by PMT in connection with Seven Mile's seeking a listing on the TSE.

Harrison said he discussed the Quarterly Transactions with Davis and would have disclosed them if Davis had said it was necessary. Davis concluded disclosure was not necessary, but said that he was not personally aware of the deposit of $597,183 on October 31, 1989, which immediately preceded the advance of $600,000 on November 1, 1989. Seven Mile's management representation letter to PMT stated that there were no related party transactions other than as disclosed in the financial statements.

We accept the evidence of Parker and Davis that they did not have all of the information about the Quarterly Transactions when they completed their audits. Harrison may have discussed some aspects of the Quarterly Transactions with Parker and Davis, but he provided only selective information. It was misleading for Harrison to advise Parker of the $350,000 repayment on July 31, 1989, without advising him that the same amount was readvanced the next day. When Davis asked Harrison about the $600,000 advance on November 1, 1989, it was misleading for Harrison not to bring to his attention the $597,183 repayment on the previous day. Seven Mile's management representation letter to PMT was misleading in not disclosing the Quarterly Transactions.

In these circumstances, Harrison cannot be heard to say that he relied on Davis and Parker in determining whether disclosure of the Quarterly Transactions was required.

Hamelin and Harrison were directly responsible for effecting the Quarterly Transactions. As the chief executive officer and the controller of Seven Mile, they were responsible for preparing the Quarterly Reports. Harrison signed all of the Quarterly Reports. Hamelin signed all but one of them, and he signed the financial statements included in that one. Hamelin had been involved with public companies for twelve years and knew the importance of producing accurate financial statements. Harrison had practised accounting for ten years. It should have been obvious to them that disclosure of these substantial related party transactions was required. If it was not obvious, the instructions for Schedule C of the quarterly report form should have made it so.

The fact that, by providing only selective information to Seven Mile's auditors, Harrison was able to have the financial statements accepted by the auditors does not absolve the Respondents of their responsibility for the misrepresentations in the Quarterly Reports.

We find that, in failing to ensure that Seven Mile disclosed the Quarterly Transactions in the Quarterly Reports, Hamelin and Harrison failed to exercise the care, diligence and skill of a reasonably prudent person.

Turning to the purpose of the Quarterly Transactions, we reject the explanation that they were done to avoid tax consequences to Hamelin. By Harrison's own evidence, the advances to MGH would be taxed as income if they remained outstanding for more than one year. That would explain why the advances were repaid annually, but does not explain why the money was repaid and readvanced four times per year. Harrison suggested that the timing of the Quarterly Transactions was chosen because the Quarterly Reports would be available to Revenue Canada. This confirms that the Respondents did not want the advances to MGH to be disclosed and that they deliberately chose the dates of the Quarterly Transactions in order to conceal the advances.

We find that the Quarterly Transactions were effected by the Respondents, and not disclosed in the Quarterly Reports, for the purpose of concealing the advances from Seven Mile to Hamelin and, thereby, presenting a false and misleading appearance of the financial affairs of Seven Mile. On this basis, we also find that the Respondents did not act honestly and in good faith and in the best interests of Seven Mile.

In conclusion, we find that the Respondents were responsible for the failure of Seven Mile to prepare its financial statements in accordance with GAAP and for Seven Mile's filing Quarterly Reports that contained misrepresentations.

5. HAMELIN'S SALE OF SEVEN MILE SHARES

During the period from November 1, 1989 to February 28, 1990 Hamelin disposed of Seven Mile shares as follows:

	Nov. 1 - 30, 1989	303,100
	Dec. 1 - 31, 1989	102,500
	Jan. 1 - 31, 1990	19,500
	Feb. 1 - 28, 1990	217,700

The logic of the Superintendent's argument is as follows:

     - Hamelin was a control person of Seven Mile.

Section 1 of the Act defines a control person. The relevant portions of the definition are as follows:

"control person" means ... a person who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer ... to affect materially the control of the issuer, and, where a person ... holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, the person ... shall, in the absence of evidence to the contrary, be deemed to hold a sufficient number of the voting rights to affect materially the control of the issuer.

- A trade by Hamelin of Seven Mile shares was a distribution.

- A distribution can only be made if a prospectus has been filed or an exemption from the prospectus requirement is available.

42.(1)

Unless exempted under this Act or the regulations, a person shall not distribute a security unless a preliminary prospectus and a prospectus respecting that security

(a)		have been filed with, and
(b)		receipts obtained for them from, the superintendent.

- Hamelin did not file a prospectus and certain trades by him were not exempted under the Act or the Regulation.

Two exemptions are specifically available to a control person of an exchange issuer.

Section 117(d) of the Regulation provides an exemption for a trade from the holdings of a control person of an exchange issuer provided certain conditions are met. One of the conditions is that "the control person has filed a notice of intention to sell and declaration in compliance with section 129". The Superintendent entered a certificate under section 150 of the Act stating that such a notice had not been received at any time from Hamelin in respect of Seven Mile.

Section 117(e) of the Regulation provides an additional exemption in the following circumstances:

(e)

the trade is in a security of an exchange issuer from the holdings of a control person where

(i)		the security was acquired by the control person on or through the facilities of the Vancouver Stock Exchange,
(ii)		the trade is made on or through the facilities of the Vancouver Stock Exchange, and
(iii)		the security traded, together with the securities of the same class traded by the control person under this paragraph during the 90 day period preceding the trade, do not exceed 5% of the securities of the class outstanding at the date of the trade.

Hamelin submitted that, in making his trades in Seven Mile shares, he had relied upon an order granted to him under section 55 of the Securities Act, R.S.B.C. 1979, c. 380, (the "Old Act"). That order recognized the establishment by Hamelin of a "control base" in his holdings of Seven Mile shares and provided an exemption for trades through the Exchange in shares of Seven Mile not forming part of the "control base".

The Superintendent noted that, on February 1, 1987, when the Act came into force and the Old Act was repealed, a blanket exemption order -under section 59 of the Act (BOR #87/3) continued the orders made under section 55 of the Old Act. Effective September 1, 1988, when sections 117(d) and (e) came into force, BOR #87/3 was revoked by the Superintendent in BOR #88/4. Accordingly, Hamelin's exemption order under section 55 of the Old Act ceased to be in force on September 1, 1988.

Hamelin admitted that, if the order under section 55 of the Old Act no longer applied, he had traded in contravention of section 42. However, he claimed that he was not aware that the order had been revoked. He argued that he had operated openly on the basis that the order was still in effect and noted that he had reported all of his trading to the Commission in his insider reports.

We find, on the basis argued by the Superintendent, that Hamelin traded shares of Seven Mile in contravention of section 42 of the Act. It was Hamelin's responsibility to be familiar with the law as it applied to his trading. Hamelin was an active market participant and a director, officer and control person of a reporting issuer. In that position, he was obliged to maintain current knowledge of the regulatory requirements concerning trades by control persons.

6. HAMELIN'S INSIDER REPORTS

Hamelin's insider reports concerning his shareholdings in Seven Mile were filed as follows:

	Month	Date Received
	-----	-------------
	January 1989	April 27, 1989
	February 1989	April 27, 1989
	March 1989	April 27, 1989
	April 1989	May 18, 1989
	May 1989	June 19, 1989
	June 1989	July 11, 1989
	July 1989	August 24, 1989
	August 1989	September 25, 1989
	September 1989	October 27, 1989
	October 1989	December 8, 1989
	November 1989	January 4, 1990
	December 1989	January 18, 1990
	January 1990	March 23, 1990
	February 1990	March 23, 1990

Harrison told us that he had been unable to file Hamelin's insider trading reports on time because the account statements from the brokerage houses required to complete these reports were only mailed out on the 15th of the month and were not available to him before the deadline date each month. He said that the requirement by the Commission that the reports be signed personally by Hamelin caused further delays when he was overseas and not available to sign them. He told us that Hamelin had not given him any confirmation slips for individual transactions which would have enabled him to prepare the reports on time.

Harrison said that he filed the reports for January, February and March 1989 on April 27, 1989, under the amnesty for late filings announced by the Superintendent in NIN #89/13, which expired on April 28, 1989.

Section 70(4) of the Act requires that an insider "shall, within 10 days after the end of the month in which the change [in the insider's direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer] takes place, file an insider report in the required form disclosing

(c)		his direct or indirect beneficial ownership of, or control or direction over securities of, the reporting issuer at the end of that month, and
(d)		the change or changes in his ownership in securities of the reporting issuer that occurred during the month so long as he was an insider of the reporting issuer at any time during that month."

Hamelin was aware of his insider reporting obligations but simply did not take steps to ensure that he complied with them. He had previously been subject to a cease trade order for failing to comply with section 70. He brought his filings with respect to Seven Mile up to date under the Commission's amnesty. After that, he filed every one of his insider reports late, through a period when he was trading heavily.

The information provided by insider reports is important market information, as it discloses to market participants the trading activities of the persons most closely connected to, and therefore in a position to be most knowledgeable about, a reporting issuer. Timely reporting is particularly important where, as in this case, the insider is an active trader.

7. THE MONEYWORLD ADVERTISEMENTS

7.1 Evidence

The Vault property consists of eighteen mineral claims covering an area of approximately 1700 hectares, located near Skaha Lake south of Penticton.

Seven Mile acquired the Vault property in 1985 from Mr. Murray Morrison, a geologist who had staked it. Morrison subsequently introduced the Vault property to Inco and, in 1986, Seven Mile entered an option agreement with Inco. Inco agreed to pay Seven Mile $100,000 and to spend $400,000 on exploration in order to earn a 60 per cent interest in the Vault property. After Inco had earned its 60 per cent interest, Morrison negotiated, on Seven Mile's behalf, a joint venture with Inco to continue exploration. Inco was the operator under the joint venture.

Mr. Wim Groeneweg, an employee of Inco and a geologist with 21 years experience, was in charge of the exploration program during the option period and after the joint venture was formed. Groeneweg testified that under the joint venture Seven Mile and Inco were to have input into each others press releases. A management committee, consisting of representatives from Seven Mile and Inco, was set up to make the decisions for the joint venture with respect to the exploration program.

The 1990 exploration program, which was proposed by Inco and accepted by the management committee in November 1989, consisted of two phases, with the second phase conditional upon success of the first phase. The estimated cost of the program was $1,025,000:  $325,000 for the first phase and $700,000 for the second phase.

During December 1989 and January and February 1990, there were several publications by Inco and Seven Mile concerning the Vault property. The key publications were:

     - a press release issued by Inco on December 4, 1989;

     - a press release issued by Seven Mile on December 5, 1989;

- an advertisement in the December/January 1990 issue of
MoneyWorld placed by Seven Mile on December 11, 1989; and

- an advertisement in the February/March 1990 issue of MoneyWorld placed by Seven Mile on January 18, 1990.

Inco Press Release

The Inco press release provided an update on the exploration of the Vault property and announced the first phase of the 1990 exploration program. It read as follows:

	Inco and Seven Mile High have spent a total of $3,500,000 exploring the property, including the completion of 37,000 metres of diamond drilling.
	Diamond drilling has located epithermal gold mineralization in two east-west trending zones: the Main Zone and the North Vein.
	The Main Zone contains numerous gold-bearing veins in a quartz stockwork which is 600 m long, 40 to 125 m wide and five to 30 m thick. The top of the mineralization is 170 m below surface at the west end and 500 m below surface at the east end. Although several "ore-grade" drill intersections have been identified within the veins, the overall grade of the stockwork is less than 2 g/t Au. The erratic and discontinuous nature of the mineralization does not allow a calculation of a mineral resource of possible higher grade zones within the stockwork.
	The North Vein is a discrete narrow quartz-calcite adularia vein located 350 m north of the Main Zone. Diamond drilling to date has indicated a mineral resource of 150,000 tonnes grading 14 g/t Au. using a cut-off grade of 3 g/t Au. The average true width for the intersections included in the tonnage calculation is 0.57 m. The North Vein had been tested over a strike length of 1,050 m and a vertical depth varying from 100 to 200 m.
	The exploration program under consideration for 1990 is estimated to cost $325,000 and consists of surface sampling and further diamond drilling on the North Vein.

Seven Mile Press Release

The Seven Mile press release repeated some of the information from the Inco press release and added further details. In a paragraph on the results from the North Vein, the following sentence was included in parentheses:

Seven Mile believes that a potential of at least 200,000 ounces of gold has been delineated in the North Vein to date.

Seven Mile's representative on the Vault Joint Venture Management Committee is Maurice Hamelin, President and Chief Executive Officer of the Company. In Mr. Hamelin's opinion sufficient information is now known to make a decision to place the North Vein into production. The 1990 exploration program will serve to increase the reserves from the North Vein and to further prepare the Central Zone for an underground operation to confirm the potential of the epithermal deposit which has been discovered. The favourable location of the property will ensure a low cost operation.

The Seven Mile press release was signed by Harrison.

MoneyWorld Advertisements

During October and November of 1989, Hamelin negotiated a marketing agreement for Seven Mile with Strategic Relations Group, a division of World Perspective Communications Inc., ("Strategic").

The marketing agreement recited that Strategic "operates and sells marketing services, which includes writing and/or production of advertising and promotional materials". Seven Mile was to provide Strategic with an information package containing all the relevant information relating to Seven Mile. Seven Mile acknowledged "that the sole purpose for providing [Strategic] with the Information Package is for utilization in a marketing program". Seven Mile made representations and warranties and gave covenants respecting the completeness and truthfulness of the information package. The marketing services Strategic agreed to perform included "12 full-page four color advertisements in MoneyWorld".

Under the marketing agreement, Seven Mile was obligated to pay Strategic $425,000 U.S., all but $75,000 U.S. of which was due by December 28, 1989.

Seven Mile placed two advertisements in MoneyWorld before the Exchange halted trading in its shares. According to Hamelin, the advertisements were placed to provide information to potential purchasers of Seven Mile's shares.

On Hamelin's direction, Seven Mile placed an advertisement in the December/January 1990 issue of MoneyWorld. Hamelin approved the final copy of the advertisement on December 11, 1989.

Two expert witnesses were tendered to give opinions on the advertisement.

Mr. Robert W. Stevenson was tendered by the Superintendent as an expert in economic geology. Stevenson described an economic geologist as a person who studies the origin of mineral deposits and how to search for them, and gathers information for the use of mining engineers and metallurgists.

Stevenson received a bachelor of applied science in engineering and mining and geology from the University of Toronto in 1952, and then spent 30 years with a major mining company doing geological and economic assessments and evaluations of mining properties.

In 1982, Stevenson became a consulting geologist. He has been a member of the Commission's mine evaluation committee since 1984 and its chairman since 1989.

Among other activities, Stevenson is a Fellow of the Geological Association of Canada and a member of the executive of the British Columbia and Yukon Chamber of Mines. He previously served on the Ecological Reserves Advisory Board and was chairman of the land use committee of the Mining Industry Task Force.

Morrison was tendered by the Respondents as an expert geologist. Morrison graduated as a geologist from the University of British Columbia in 1965 and has practical experience as a surveyor and as a contract prospector and geologist. Since 1981 he has been a prospector geologist looking for gold, particularly in epithermal deposits, in southern British Columbia. He has been involved with the Vault property since 1982.

The advertisement was headed "CLASSIC GOLD EPITHERMAL DEPOSIT UNCOVERED" and was laid out in the form of a news article, interspersing text with large bold-faced sub-headings and phrases. The first sub-heading asks the rhetorical question:

Could this be the unfolding of North America's largest and richest gold mine discovery?

	Consider this astounding fact. ...
	Millions of years ago, under the earth, there was a massive eruption of ore rich in gold in a small mountainous region of British Columbia, Canada. The hot solutions boiled upwards, but cooled before they could surface, staying some 600 feet down, hidden from all eyes.
	The eruption pushed aside layers and layers of earth, and flooded the property with ore laced in gold and silver, but especially gold. Beneath the very surface, it was as if a hot volcano of gold erupted violently upwards to fill the earth with its vast richness -- but then it stopped short of reaching the top. The gold was never visible to the naked eye.
	The event was violent -- the rewards astounding...

A potential 100 million tons of ore.

The text continues:

	What we are describing is a textbook classic Epithermal deposit. A hidden deposit with ore rich in gold and silver, and with little or no trace of other minerals such as copper, zinc or lead.
	The amazing fact is that it is real: The discovery and drilling of what could be North America's greatest Epithermal gold deposit has been made.
	Already, there is a potential 200,000 ounces of gold on the North Vein alone, on just 3,500 feet of the north side of the 4,200 acre property. Experts concur that this had the makings of a classic textbook Epithermal gold deposit, making it possibly one of North America's future major finds.

"ore" means a natural aggregate of one or more minerals (a) that may be mined and sold at a profit, or (b) from which some part may be profitably separated, at a specified time and place.

Stevenson also said that the words "laced in gold and silver" were not consistent with the drilling results and pointed out that, according to the Inco report, less than 1 per cent of all the drill core intercepts had recordable gold.

In so far as the words "flooded" and "laced in gold" were concerned, he said that these were geological terms implying a widespread deposit. He said that the Vault property could not be described as a deposit laced or flooded with gold because the North Vein is a narrow deposit and the gold on the rest of the property was sparse and erratic.

Stevenson said the statement that the property had "what could be North America's greatest Epithermal gold deposit" was simply not true. He referred us to a list of 27 epithermal gold deposits in Western North America, each of which has 1 million ounces or more in developed reserves. The largest of these properties has 23 million ounces of reserves. Stevenson pointed out that, even assuming the existence of 200,000 ounces of gold on the Vault property as claimed in the advertisement, it would be a relatively small deposit.

With respect to the claim of a potential 200,000 ounces of gold on the North Vein alone, Stevenson noted that Inco had calculated the reserve at 67,650 ounces. He expressed the opinion that, based on the drilling results, it was extremely unlikely the North Vein contained 200,000 ounces of gold.

Morrison told us that in his opinion the first 3 paragraphs of the advertisement describing the formation of an epithermal deposit are not incorrect if allowances were made for the fact that the paragraphs occurred in an advertisement intended for non-geologists. He referred to the statement: "It was as if a hot volcano of gold erupted violently upwards to fill the earth with its vast richness - but then it stopped short of reaching the top." He said this was true if one replaced the layman's phrases "volcano of gold" and "the earth" with the geological phrases "epithermal solutions charged with gold" and "rock," respectively. He conceded that the ultimate potential of the property had not been resolved and that only 1 per cent of the property could be regarded as flooded.

With regard to the use of the term "ore", Morrison agreed that it has a specific meaning understood by geologists, but said that it is sometimes used loosely by geologists in conversations to describe any rock that contains economic minerals. He also said that whether a deposit is ore can be affected by variables ranging from the price of gold to the price of electricity or diesel fuel. He confirmed that the mineralized rock on the Vault property cannot be described as ore.

With regard to the claim that the property "could be North America's greatest Epithermal gold deposit" and possibly "one of North America's future major finds", Morrison said that exploration on the property was far from being complete but that the work on one quarter of the property that had been explored to date had located four gold bearing mineralized zones. With regard to the claim of a potential 200,000 ounces of gold, he said that referred to the potential of the North Vein. He said that the other zones had not been fully drilled off and that, although their potential is unknown, they could contain several hundred thousand ounces of gold. He conceded, however, that even 600,000 ounces would not make this a major find.

The next sub-heading states:

Five Lifetimes Mining This Property

The text continues:

	What land in North America holds this hidden wealth beneath its very depths? The far side of Canada, in British Columbia's Okanagan Region, is where this classic Epithermal deposit, the Vault property, has been discovered.
	The Vault property covers 4,200 acres and consists of five mineral claims at the southern end of peaceful Skaha Lake. Experts say it could take five lifetimes to mine the property's full potential.

"The Vault property is every gold miner's dream."

The text continues:

	Already, the large Epithermal gold-bearing system has been identified with the top of the horizon approximately 600 feet below surface.
	Surface mapping and exploration identifies a strong quartz-feldspar vein system some 300 meters north of the main epithermal body. And the system has been traced along strike some 900 meters and appears to be very consistent.
	In excess of $4 million has been expended in drilling the property thus far and the results have been extremely positive. In diamond drilling, the miners have hit gold 49 out of 50 times - further proof that this Epithermal deposit literally laces the land in gold.

Stevenson also pointed out that the present value of any mining in the distant future is virtually nil.

With regard to the claim that the diamond drilling had hit gold 49 times out of 50, Stevenson pointed out that this was correct only for the North Vein, not for the entire property as the text implies, and that most of these holes represented infill drilling on an area of previously identified mineralization. He noted that many of the holes drilled elsewhere on the property contained no reportable gold.

Morrison said that the ultimate grade, size and shape of all the precious metal deposits on the Vault property could take 5 generations to determine, let alone mine. However, he conceded that it would be very rare to find a gold mine in production for 100 years or more and that it would not take 100 years to mine even 600,000 ounces of gold.

Morrison suggested that the statement "In diamond drilling, the miners have hit gold 49 out of 50 times" could be "argued to be correct on a point of degree". While admitting that some of the step-out holes returned no gold, he said that most drill holes on the North Vein and Main Zone returned at least one assayed intercept of 0.029 ounces of gold per tonne. He conceded that this was not a mineable grade but he said that it was geochemically significant. He also conceded that one would expect to find gold from infill drilling.

The next sub-heading and section of the text reads as follows:

	"Downtown Mine" Creates Lowest Cost Producing Underground Gold Mine in the World
	The Epithermal deposit is just the beginning... The Vault property's location fully complements the richness of the land hidden for so many years.
	Fly over the southern end of Skaha Lake, and what you'll see is a beautiful resort area with the main town highway cutting directly across the Vault property.
	It is every gold miner's dream:  the "downtown mine" has abundant and ready power, direct access to a main highway, and close proximity to labor (in fact, the current drillers on the Vault property stay at a hotel five minutes away from the drilling site!).
	And it gets better. A natural tailings pond is located directly on the deeded property, and a custom mill is stationed 25 kilometres away, as well as a good location site for another mill situated directly on the property.

Morrison said that the sub-heading could be true once all of the exploration data was in. He acknowledged that the total reserves and cost of mining them were unknown. He felt that the Vault property was well located with respect to infrastructure in comparison to other current exploration activities in British Columbia.

The next sub-heading reads:

A Leader of Foresight and Utter Tenacity

The text continues:

	The Vault property is private land, bought by a man with tremendous foresight, who realized the vast wealth hidden for so long. A man who has spent the last several years painstakingly working 18 hour days to realize his dream ... to uncover a major Epithermal deposit of gold.
	That man is Maurice Hamelin, president and chief executive officer of Seven Mile High Group Inc., exclusive owner of the rights to the 4,200 acre Vault property with 400 acres purchased outright.
	Mr. Hamelin's expertise is in business structuring and finance. His background in metallurgy, and his record as a venture capitalist and businessman in both real estate and transportation, speaks for itself.

Top geologist calls it "one of the best I have ever seen."

The text continues:

	To hear him talk about the magnitude of the Vault property is to relive the joy of a man about to realize his dream. It can be likened to the little child who for the first time steers his bicycle to victory ... or of the unparalleled excitement of the football team players who win the Super Bowl.
	Maurice Hamelin is a man committed to his goal. It is this commitment and belief that enabled him to convince what is known as "the IBM of Mining" to joint venture the property.

Hamelin testified that his background in metallurgy consisted of two years employment, between 1977 and 1979, as a laboratory technician with Amax corporation. He had not attended university.

Morrison suggested that the statement that Hamelin's background is in metallurgy implied only that he has had at least some exposure to mining, drilling and efficient mineral recovery. Morrison agreed that he would expect someone with a background in metallurgy to know the meaning of "ore".

The text continues:

	Partnership With Industry Giant INCO
	To fully exploit a discovery of this magnitude, Mr. Hamelin offered a joint venture to INCO in 1986, and INCO, realizing the massive potential of the Vault property, accepted for a 60% share.

Gold production decision imminent.

The text continues:

	This joint venture represents a coupling of a potentially great gold deposit with the might of a mining industry giant. INCO Ltd. is a major force in the world, supplying about 34% of the free world's nickel. It's listed on all major stock exchanges (stock symbol: N), trades options on the Chicago Board, is one of the Standard and Poor's 500. Sales last quarter were in the $425 million range.
	Obviously, INCO is a giant concern. There has been well over $4,000,000 expended in diamond drilling of over 100 holes so far. Of course, INCO has their own geologist on site and he is the best they have in Epithermal recovery. He is very excited about the find, and said it has "the potential to be one of the best I have ever seen."
	And, of utmost timing significance to investors, INCO, with Seven Mile, is now discussing gold production scheduling on the Vault property.

Groeneweg told us that the Vault property was still only a prospect and that no determination had been made whether to mine it. At the end of 1989, Inco had made no decision on the economic viability of mining the Vault property, had made no plans regarding production and had not estimated cash flow, as a feasibility study had not been done.

The next sub-heading reads:

North Vein Pays the Way for "Mother Lode"

The text continues:

	A potential 200,000 ounces of gold has been established in the North Vein of the Vault property. It runs on the north side in an east west direction and covers 3,500 feet. Drill results to date show gold in the range of 0.264 to as high as 8.10 oz. AU/ton. It is here that Seven Mile and INCO are now concentrating their efforts - and with good reason.
	Initial production of the North Vein is projected to bring over $100,000,000. This cash flow will enable Seven Mile and INCO to then launch production on the main Epithermal deposit -- without any additional cost.
	Plus, the production of the North Vein will give Seven Mile free entry into the main Epithermal deposit, thereby reducing production costs even further.

Stevenson said that it was inappropriate to make economic calculations or do a feasibility study on the basis of potential reserves. In his opinion, the reference to the $100,000,000 being the cash flow from the North Vein was totally unrealistic.

He noted that this figure appeared to be an estimate of gross revenue from the North Vein and did not take into account the cost of producing the gold. He said that the term "cash flow" usually refers to net cash flow (after production costs) rather than gross revenue.

The final section of the advertisement is as follows:

	A 100-to-1 Payout
	To date, Seven Mile's potential reserves are over 100,000 ounces of gold. At the current market price of $410 per ounce, that equals revenue of $41,000,000. (Keep in mind that the silver contents of the Epithermal deposit should be enough to pay for the cost of extraction and refining, leaving the gold as pure profit).

Silver pays the way ... the gold is pure profit.

The text continues:

	Take that base figure, and divide it by the small amount of shares available, and you have a company that should trade at $6.73 per share. In the near future, the stock could earn at least $2.00 of the $6.73, and, at the lowest industry P/E around (5), the price of the stock could leap from its present $2.00 range to $10.00 (5X2=10) -- for a fivefold increase.
	As Seven Mile continues to uncover what could very likely be one of North America's richest epithermal gold deposits, proving more and more reserves ... and with each new announcement propelling the demand to own the stock ... the price should move higher, much higher, because of the limited number of free trading stocks on the market.
	Based on the rich potential of the property, the partnership with INCO, and the number of shares outstanding, one analyst has estimated an investor's payoff at better than 100-1. Maybe a LOT better.

In Stevenson's opinion, the reference to the cost of production being covered by mining the silver is deceptive. He calculated the silver content based on drilling results for both the North Vein and the Main Zone and concluded that the value of the silver was "simply too low to pay for the cost of extraction and refining".

Morrison acknowledged that the statements in these paragraphs reflect the best possible scenario for the reserves in the North Vein and do not account for proper production costs. He said that the figures should not have been spelled out so precisely in the advertisement when so much of the data required to make accurate calculations about the property was not yet available.

Morrison said that the ultimate potential of the Vault property, and therefore the ultimate worth of the Seven Mile shares, could not be known until all of the property has been explored.

Hamelin claimed that he had obtained the information for the advertisement from Ed Hunter, the geologist employed by Inco on site at the Vault property. In particular, he said that he had relied on a video tape made on the Vault property, involving a discussion between Hunter and several other individuals identified as Bruce Dunn (an investor), Wallace Nesbitt (a director of Seven Mile), Harold Smith (a Vice President of Merrill Lynch), and Jerry Young (from Strategic). Young was behind the camera for the video tape and was involved in writing the advertisement.

Groeneweg said that Hunter had worked for Inco from 1970 until 1985, as an employee, and had worked on the Vault property between 1986 and 1990, as a contracting geologist for Inco. He carried out the diamond drilling program designed and approved by Inco. Groeneweg said that Hunter did not have much experience in mining and noted that it would be up to a mining engineer to decide how to mine the property.

Hamelin admitted that in October 1989 he had assigned to Hunter a certificate held by a trust company representing 10,000 shares of Seven Mile. When Hunter went to get delivery of the certificate in March 1990, he was told that the shares had been sold on December 1, 1989.

Hamelin said that he had seen the video tape prior to meeting with Strategic about the advertisement and he believed that the information contained in it was correct. He said that he had also obtained information for the advertisement from Nesbitt, Young, Weiss, Smith, Morrison, Groeneweg and two professional geologists from Vancouver, whom he said he had retained to do reports on the Vault property. He said that Hunter had supplied him with the figure of 200,000 ounces of gold as a potential for the North Vein and that Nesbitt, Weiss and Smith had done an estimate by multiplying that number by the current price of gold to arrive at the $100 million described in the advertisement as the cash flow from initial production of the North Vein.

Hamelin provided no indication as to what information he had obtained from Morrison, Groeneweg or the two geologists from Vancouver or how it related to the contents of the advertisement. Nor did he produce the reports on the Vault property that he claimed had been prepared by the two geologists.

The advertisement that appeared in the February/March 1990 issue of MoneyWorld was the same as the December/January advertisement, except for some changes made to the section entitled Partnership With Industry Giant INCO. The phrase interrupting the text, "Gold production decision imminent" was replaced with the phase, "Major influx of capital to fuel gold production." The final paragraph of the section was replaced by the following:

To emphasize the confidence which the investment community has in the Vault property, Seven Mile has completed a $6.5 million financing with a major international investor, in December 1989. Of utmost timing significance to investors, the subsequent influx of $3 million in working capital will fuel Seven Mile's gold production scheduling on the Vault property.

One of the fundamental goals of securities regulation is to ensure that market participants have access to the information they require to make rational investment decisions. This goal is important for the establishment of a fair and efficient securities market that has the confidence of the public. A key instrument in achieving this goal is the requirement that reporting issuers provide continuous disclosure of information about their business and affairs.

The basic continuous disclosure requirements are found in the Act and Regulation. Part 10 of the Regulation deals with the requirement for a reporting issuer to file periodic financial statements and reports, which were addressed in section 4 of this decision. Section 67 of the Act sets the requirement for a reporting issuer to disclose material changes in its affairs.

The Commission has issued guidelines to supplement the basic requirements of section 67 and assist reporting issuers in complying with it. Certain of these guidelines are found in National Policy No. 40, Timely Disclosure, and in National Policy No. 22, Use of Information and Opinion Re Mining and Oil Properties by Registrants and Others. Other guidelines are found in previous decisions of the Commission.

National Policy No. 40 sets out requirements for the dissemination of material information. Under "Contents of Announcements", National Policy No. 40 states:

Announcements of material information should be factual and balanced, neither over-emphasizing favourable news nor under-emphasizing unfavourable news ... news releases should contain sufficient detail to enable media personnel and investors to appreciate the true substance and importance of the information so that investors may make informed investment decisions. The guiding principle should be to communicate clearly and accurately the nature of the information, without including unnecessary details, exaggerated reports or editorial commentary designed to colour perception of the announcement.

Misleading disclosure activity designed to influence the price of a security is improper. Misleading news releases send signals to the investment community which are not justified by an objective examination of the facts, and may detract from the issuer's credibility.

National Policy No. 22 states that, in general, the standards of disclosure shall be those found in National Policy No. 2-A, Guide for Engineers, Geologists and Prospectors. The manner of description and the definitions used shall conform to those set out in the Guide. The Guide requires that the publication must be factual. It states that "Care should be taken in the use of the word 'ore'." The definition in the Guide is substantially the same as the definition of "ore" contained in Appendix 1 of Form 54.

National Policy No. 22 also lists further specific standards. Sources of information and opinion shall be named specifically, by reference to either a named person or an official publication. Where a person providing information or offering opinions has any interest in the company, that must be clearly disclosed.

The Commission has previously made clear through its decisions that it considers compliance with continuous disclosure requirements to be an important objective of securities regulation. In our view, the fairness and efficiency of, and the public's confidence in, the securities market is damaged when a reporting issuer fails to comply with continuous disclosure requirements or publishes statements, whether in response to a regulatory, requirement or not, that misrepresent its business and affairs.

During the Material Time, Seven Mile was a reporting issuer. Its business was the exploration of the Vault property in a joint venture with Inco, and its only source of funds was from the issuance of shares.

The Vault property was regarded by Inco as an interesting prospect. Inco and Seven Mile had spent $3.5 million exploring the property up to the fall of 1989. Drilling had located mineralization, but no ore, and it was not clear whether the mineralized zones could be mined economically. The exploration program planned by the joint venture for 1990, as approved in November 1989, was relatively modest, with a first phase costing $325,000 and a second phase, conditional on the success of the first, costing $700,000.

The sole purpose of the marketing agreement Seven Mile entered into with Strategic was to promote investor interest in Seven Mile's shares. That was clear from the marketing agreement and obvious from the advertisements. Hamelin admitted that the advertisements were placed to provide information to potential purchasers of Seven Mile's shares.

We find that Seven Mile was required to comply with National Policy No. 40 and National Policy No. 22 in the preparation of the advertisements.

We have reviewed the December/January advertisement in its entirety, setting out the evidence with respect to the significant statements in it. The February/March advertisement was almost identical. It is clear, from a comparison between the statements in the advertisements and the evidence of Groeneweg, Stevenson and even Morrison, that the advertisements failed to comply with regulatory requirements and were, indeed, laced with misrepresentations.

There were numerous examples of language in the advertisements that was inconsistent with the requirements of National Policy No. 22 and National Policy No. 40.

- The policies require disclosure to be factual. Scattered throughout the advertisements were statements and phrases, with no factual basis, that used the words "could be" or "potential". Some of these statements and phrases are set out below:

	Could this be the unfolding of North America's largest and richest gold mine discovery?
	A potential 100 million tons of ore.
	The amazing fact is that it is real:  The discovery and drilling of what could be North America's greatest Epithermal gold deposit has been made.
	Already, there is a potential 200,000 ounces of gold on the North Vein alone.
	... a potentially great gold deposit ...
	A potential 200,000 ounces of gold has been established.
	Initial production of the North Vein is projected to bring over $100,000,000 ...
	To date, Seven Mile's potential reserves are over 100,000 ounces of gold ...
	As Seven Mile continues to uncover what could very likely be one of North America's richest epithermal gold deposits ...
	... based on the rich potential of the property.

	- National Policy No. 22 requires that care should be taken in the use of the word "ore". The evidence is clear that there was no ore on the Vault property. National Policy No. 22 states that where the word ore may not be used, such terms as mineralization, mineralized bodies or concentrations should be used. None of those terms was used in the advertisements. The word "ore" was used 4 times in the phrases we have already set out above.
	- National Policy No. 22 requires that sources of opinion be named specifically. Throughout the advertisements opinions were stated but not attributed. Following are examples:

	Experts concur that this has the makings of a classic textbook Epithermal gold deposit, making it possibly one of North America's future major finds.
	Experts say it could take five lifetimes to mine the property's full potential.
	Top geologist calls it, "one of the best I have ever seen."
	He [Inco's geologist] is very excited about the find, and said it has "the potential to be one of the best I have ever seen."

- National Policy No. 22 requires that sources of information be named specifically. Throughout the advertisements, information is disclosed but the source of the information is not named specifically. No source was disclosed for the description of "a textbook classic Epithermal deposit" in the first four paragraphs of the advertisements. Other examples include:

	A potential 100 million tons of ore.
	Already, there is a potential 200,000 ounces of gold on the North Vein alone.
	... the results have been extremely positive ...
	"Downtown Mine" creates lowest cost-producing underground gold mine in the world.
	The Epithermal deposit is just the beginning... The Vault Property's location fully complements the richness of the land hidden for so many years.
	The Vault property is every gold miner's dream.
	A potential 200,000 ounces of gold has been established in the North Vein of the Vault property.
	Initial production of the North Vein is projected to bring over $100,000,000. This cash flow will enable Seven Mile and Inco to then launch production on the main Epithermal deposit without any additional cost. Plus, the production of the North Vein will give Seven Mile free entry into the main Epithermal deposit, thereby reducing production costs even further.
	To date, Seven Mile's potential reserves are over 100,000 ounces of gold.
	Silver pays the way ... the gold is pure profit.
	Keep in mind that the silver content of the Epithermal deposit should be enough to pay for the cost of extraction and refining, leaving the gold as pure profit.

	- National Policy No. 22 requires that any interest in the company held by a person providing information or offering opinions must be clearly disclosed. Hamelin's evidence was that he had obtained the information for the advertisements from Ed Hunter, the geologist employed by Inco on the Vault property. Not only should Hunter have been disclosed as the source of the information, but Hunter's interest in Seven Mile, through the shares assigned to him by Hamelin, should have been disclosed as well.
	- National Policy No. 40 requires that disclosure should be balanced, not over-emphasizing favourable news. It is clear that no ore had been found on the Vault property, although drilling had indicated some interesting mineralization. While Inco had calculated a potential of 67,650 ounces of gold for the North Vein, more information was needed to complete feasibility studies and until then no decisions could be made whether to mine the Main Zone or the North Vein. Whatever favourable news there was about the Vault property was, to say the least, "over-emphasized" in the advertisements.
	- The guiding principle set out in National Policy No. 40 is to communicate clearly and accurately the nature of the information, without including unnecessary details, exaggerated reports or editorial comments designed to colour perception. This guiding principle was not followed.

	INCO, realizing the massive potential of the Vault property ...
	Gold production decision imminent.
	And, of the utmost timing significance to investors, INCO, with Seven Mile, is now discussing gold production scheduling on the Vault property.
	Of course, INCO has their own geologist on site and he is the best they have in Epithermal recovery.
	North Vein Pays the Way for "Mother Lode"
	In diamond drilling, the miners have hit gold 49 out of 50 times - - further proof that the Epithermal deposit literally laces the land in gold.
	His [Hamelin's] background in metallurgy ... speaks for itself.
	Drill results to date show gold in the range of 0.264 to as high as 8.10 Oz. AU/ton.
	At the current market price of $410 per ounce, that equals revenue of $41,000,000.
	Take that base figure, and divide it by the small amount of shares available, and you have a company that should trade at $6.73 per share.
	In the near future, the stock could earn at least $2.00 of the $6.73.

And from this chasm, with ceaseless turmoil seething, As if this earth in fast thick pants were breathing, A mighty fountain momently was forced: Amid whose swift half-intermitted burst Huge fragments vaulted like rebounding hail, Or chaffy grain beneath the thresher's flail: And 'mid these dancing rocks at once and ever It flung up momently the sacred river.

Based on the rich potential of the property, the partnership with INCO, and the number of shares outstanding, one analyst has estimated an investor's payoff at better than 100 - 1. Maybe a LOT better.

The layout of the advertisements, the exotic description of the Vault property and the wild claims about the probable future value of Seven Mile's shares were designed to cause investors to purchase Seven Mile shares on the basis of false and misleading information.

Hamelin entered the agreement with Strategic and approved the December/January advertisement. As the chief executive officer of Seven Mile, a company whose only significant business interest was the Vault property, he had an obligation to ensure that statements published by Seven Mile about the Vault property, and about its affairs generally, complied with regulatory requirements and did not contain misrepresentations.

Hamelin claimed he got the information for the advertisements from others and believed it was true. This claim is simply not credible.

Seven Mile's press release described Hamelin as being on the joint venture management committee, which made the decisions on exploration of the Vault property, and quoted him as giving an opinion that sufficient information was known to place the North Vein into production. The advertisement described him as having a background in metallurgy.

Hamelin cannot now say that he obtained the information about the Vault property from others and have us believe that he could not judge its accuracy.

In our view, there was no reasonable basis on which Hamelin could have believed the information in the advertisements. We find that he caused Seven Mile to publish the advertisements in full knowledge that they contained misrepresentations.

We find that the advertisements completely misrepresented the business and affairs of Seven Mile and we are led to the inescapable conclusion that Hamelin caused them to be published with no regard to regulatory requirements and with the intention to deceive investors.

8. DECISION

In the preceding sections, we have reviewed five different aspects of the conduct of Seven Mile and the Respondents during the Material Time.

	- Seven Mile failed to disclose a material change in its affairs, namely the fact that it had advanced a significant portion of its assets to Hamelin.
	- Hamelin and Harrison effected a series of bank transfers, the Quarterly Transactions, which Seven Mile failed to disclose in the Quarterly Reports, for the purpose of concealing the advances to Hamelin.
	- Hamelin was a control person of Seven Mile and traded shares in contravention of section 42 of the Act.
	- After bringing his insider reports up to date under the Commission's amnesty in April 1989, Hamelin failed during the next ten months to file his insider reports within the time required by section 70 of the Act.
	- Seven Mile published advertisements that failed to comply with regulatory requirements and misrepresented its business and affairs. The advertisements were published with the intention to deceive investors and cause them to purchase shares of Seven Mile.

This conduct was damaging to the fairness and efficiency of the securities market and is precisely the type of conduct that serves to bring the market into disrepute.

Hamelin was a director and the chief executive officer of Seven Mile and was primarily responsible for making the decisions. He directed the Quarterly Transactions. He signed all but one of the Quarterly Reports, and he signed the financial statements in that one. He entered the agreement with Strategic and approved the first advertisement. Hamelin must therefore take primary responsibility for Seven Mile's failure to comply with regulatory requirements. He must also take full responsibility for his own contraventions.

Harrison was a director and the controller of Seven Mile. He assisted with and condoned the advances and the failure to disclose them. He participated fully with Hamelin in effecting the Quarterly Transactions. He signed all of the Quarterly Reports. He dealt with the auditors, and concealed information from them in order to avoid disclosure of the advances. He handled Hamelin's insider reports and, therefore, knew about Hamelin's trading activity. Harrison carries a considerable burden of responsibility for assisting Hamelin and failing to ensure that Seven Mile complied with regulatory requirements.

We consider it in the public interest to protect the market by removing the Respondents from the market and from involvement with reporting issuers for a significant period.

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 do not apply to Hamelin for 20 years or to Harrison for 10 years from the date of this decision;
2.		under section 144(1)(d) of the Act, that Hamelin is prohibited from becoming or acting as a director or officer of any reporting issuer, or any issuer that provides management, administrative, promotional or consulting services to a reporting issuer, for 20 years from the date of this decision and that Harrison is prohibited from becoming or acting as a director or officer of any reporting issuer, or any issuer that provides management, administrative, promotional or consulting services to a reporting issuer, for 10 years from the date of this decision;
3.		under section 154.2 of the Act, that the Respondents pay prescribed fees or charges for the costs of or related to the hearing incurred by the Commission and the Superintendent, the amounts to be determined following further submissions from the parties.