News Release

Released: October 4, 1991 Contact: Ron Messent  660-4800

The British Columbia Securities Commission today released its decision in the matter of Eugene Sirianni and Frank Sirianni.

The Commission ordered the removal of trading rights of Eugene and Frank Sirianni, and prohibited them from becoming or acting as directors or officers of reporting issuers or of issuers that provide services to reporting issuers, for a period of fifteen years. They were also ordered to pay the costs of the hearing.

The Commission found that the respondents Eugene and Frank Sirianni participated in a scheme involving purchases and sales of shares of Montreux Development Corporation when they knew that the transactions created or resulted in a misleading appearance of trading activity.

The Commission also found that they contravened section 70 of the Securities Act in failing to file insider reports in respect of their holdings of Montreux shares.

During a period in December 1988 and January 1989, the respondents controlled more than one-third of the free trading shares and accounted for a substantial portion of the trading activity in Montreux shares on the Vancouver Stock Exchange. Their trading accounted for 43 per cent of the buying and 34.50 per cent of the selling during the relevant period.

The respondents controlled 51 brokerage accounts, in the names of 12 different persons or entities, at 15 different brokerage firms. Montreux shares were traded by 39 of those accounts.

A key element of the evidence presented to the Commission by the Superintendent of Brokers was an analysis of the respondents' trading produced by a computer program called Analyser. This program, which was developed by John Forbes, a Vice President of the Vancouver Stock Exchange, uses information from computerized records of the Exchange and its member firms to correlate buyers and sellers of securities on the Exchange and, thereby, identify the persons on each side of a trade.

Analyser identified 54 trades for a total of 81,700 shares, that were made between accounts controlled by the respondents. These trades alone accounted for 13 per cent of the trading volume in Montreux shares during the relevant period. The Commission referred to these as "fictitious trades".

A further 48,600 shares were bought and sold by the respondents at the same price on the same days, but were not matched between the accounts, and 15,350 shares were bought and sold on the same days but at different prices.

The Commission found that the repondents' trading during the relevant period had, for the most part, no economic purpose other than debit kiting and had an enormous illusory effect on the reported trading activity in Montreux shares. Debit kiting is an abusive practice by which the delayed settlement procedure in the securities markets is used as a means of obtaining credit.

The Commission concluded that the respondents had a strong motive to create a misleading appearance of trading activity in order to induce investor interest in Montreux shares. They held a large share position, financed by very expensive credit, from which they hoped to profit, and there was nothing in Montreux' business activities to indicate that its share price should rise.

The Commission described the trading by the respondents as "a pattern of behaviour that is prejudicial to the public interest because it damages confidence in an open, efficient and credible securities market."

Copies of the Commission's decision (42 pages) may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.